No Nexus Between Disease And Patient's Death, Hyderabad District Commission Orders LIC To Disburse Rs. 20 Lakhs, Pay Compensation

Brief Facts:

Mrs. Mentla Shobha Rani's (“Complainant”) husband was admitted to Yashoda Hospitals (“Hospital”) in Hyderabad, showing symptoms of pain in the cervical, lower lumbar spine, cervical spine movement, urinary urgency, and low-grade fever. The provisional diagnosis indicated poorly differentiated metastatic ureteric carcinoma with extensive skeletal metastasis, specifically TCC (Transitional Cell Carcinoma) in the right ureter. Following treatment, the Complainant's husband was discharged. Subsequently, he was admitted to Area Hospital, Siddipet, due to breathing problems, and later, he was declared dead. The report suggested that the cause of death was Cardio Pulmonary Arrest.

The Complainant submitted a claim to Life Insurance Corporation (“LIC”) to seek an insurance amount of Rs. 20,00,000/- with admissible benefits. However, LIC repudiated the claim, asserting that the deceased policyholder suppressed the history of GU Tract Tuberculosis from 1993 to 2005, including Ureteric Stricture with hydronephrosis and Uretero Cystostomy, in the proposal form submitted by the Complainant. The Complainant submitted that the medical history sought in the proposal form covered the past 5 years and that, during this period, the deceased did not consult any doctor or undergo any surgery or hospitalization. It emphasized that her husband was not suffering from Tuberculosis or Ureteric Stricture when the proposal was submitted. The Complainant further stated that at the time of proposing the insurance, the husband was in good health according to the examination by the panel doctor of LIC.

Despite the Complainant's efforts, the Zonal Claims Dispute Redressal Committee, Central Claims Review Tribunal, and Insurance Ombudsman upheld the repudiation, stating that the suppressed medical history influenced the underwriting decision and was in compliance with LIC's policy terms and conditions. Feeling aggrieved, the Complainant filed a consumer complaint in the District Consumer Disputes Redressal Commission-II, Hyderabad, Telangana (“District Commission”).

In response, LIC asserted that the deceased obtained the policy by intentionally suppressing his real health condition. Further, it stated that the hospital's discharge summary revealed that the deceased suffered from GU Tract Tuberculosis and underwent surgeries from 1993 to 2005. This history, discovered after his death, formed the basis for the repudiation. It argued that the repudiation was justified under Section 45 of the Insurance Act 2015, as the deceased had intentionally concealed past medical conditions.

Observations by the Commission:

The District Commission noted that medical records indicated no apparent connection between the past ureter surgery in 1993 and the cancer diagnosis which happened in the hospital. The outpatient ticket from Telangana Vaidya Vidhana Parishad on January 31, 2019, confirmed the cause of death as Cardio Pulmonary Arrest.

Further, referring to the argument that the deceased didn't disclose the earlier surgery, the District Commission rejected the argument stating that LIC's authorized medical practitioner certified the proposal after a thorough examination of the deceased. The District Commission expressed concern over the LIC's negligent attitude, issuing the repudiation one year after the claim submission, despite the complainant submitting all necessary documents promptly. Further, it held that such conduct raised doubts about their overall approach.

Further, the District Commission emphasized that the Discharge Summary does not establish a connection between the suppressed medical history and the deceased's current condition. LIC failed to provide cogent evidence of continuous treatment from 1993 to 2005, and the alleged suppressed diseases/surgeries were not proven to have any nexus with the cause of death. Concluding that LIC arbitrarily repudiated the claim based on a distant medical condition, the District Commission held LIC liable for deficiency in service and unfair trade practice.

The District Commission noted that insurance is a service of assurance, not just a savings instrument, meant to provide timely financial support during unforeseen circumstances. Subsequently, the District Commission directed LIC to pay Rs. 20,00,000/- (with interest) to the Complainant. It also directed LIC to pay Rs. 25,000/- to the Complainant as compensation for inconvenience and mental agony, and Rs. 5,000/- towards litigation costs.

Case Title: Mentla Shobha Rani vs LIC of India and Another

Case No.: Consumer Case No.703/2021

Advocate for the Complainant: V. Gouri Sankara Rao

Advocate for the Respondent: KRL Sarma

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