No Causal Link Between Past Medical Treatment And Current Illness, Northwest Delhi District Commission Holds HDFC Life Insurance Co Liable

Brief Facts:

The Complainant obtained a mediclaim insurance policy from HDFC Life (“Insurance Company”). The Complainant was hospitalized at Pentamed Hospital in Delhi and was diagnosed with acute febrile illness, iron deficiency, and anaemia. He incurred an expenditure of Rs. 80,000/-. Subsequently, the Complainant submitted all necessary documents to the Insurance Company for claim settlement. However, the Insurance Company rejected the claim citing non-disclosure of a previous history of ileocecal TB since October 2015, which was not mentioned in the application form.

In response, the Complainant contested the rejection and argued that her discharge summary from the hospital did not indicate TB and tests conducted by reputable laboratories showed no signs of TB. A certificate from the treating doctor was also submitted by the Complainant which affirmed the diagnosis of febrile illness and ruled out any connection to past illnesses. Despite multiple communications from the Complainant, including a letter and an application to the claim review committee, the Insurance Company did not respond or reconsider the claim. Feeling aggrieved, the Complainant filed a consumer complaint in the District Consumer Dispute Redressal Commission-V, North-West Delhi (“District Commission”) against the Insurance Company.

In response, the Insurance Company argued that the Complainant failed to disclose her full medical history during the policy application and did not avail of the policy's free look cancellation option.

Observations by the District Commission:

The District Commission noted that the Insurance Company did not seek an independent medical opinion following the submission of the treating doctor's certificate to establish a causal link between the Complainant's past tuberculosis treatment and the current illness. Furthermore, upon reviewing the terms and conditions of the policy and the Complainant's proposal form, the District Commission found that even if the Complainant had disclosed the past tuberculosis treatment, it would not have been relevant to the current claim.

Consequently, the District Commission held that the Insurance Company's repudiation of the claim and the cancellation of the policy were unjust, unfair, and arbitrary. Therefore, it held the Insurance Company liable for deficiency in service.

Consequently, the District Commission directed the Insurance Company to pay Rs. 80,000/- to the Complainant along with 6% interest per annum. It was also directed to pay a compensation of Rs. 30,000/- to the Complainant for mental agony, harassment, and litigation expenses.

Case Title: Sushma Dang vs HDFC Life Insurance Co. Ltd. and Anr.

Case Number: CC/310/2019

Date of Pronouncement: June 7^th 2024