Page 47 - Insurance Times November 2020

policy. "The investigation by the insurer indicated that the ance claim cannot be denied on mere presumption that a
assured was suffering from a pre-existing ailment, conse- person is suffering from a pre-existing disease.
quent upon alcohol abuse and that the facts which were in The commission also directed the company to pay Rs.25,000
the knowledge of the proposer had not been disclosed," it to the complainant as compensation for causing mental
said. "We are, therefore, of the view that the judgment of
agony and harassment and Rs10,000 as costs of litigation.
the NCDRC in the present case does not lay down the cor-
rect principle of law and would have to be set aside. We Pawan Kumar, a city resident, approached the commission
after he was denied claim on the ground that he had pneu-
order accordingly," it said.
monia and a known case of chronic kidney ailment since
The counsel appearing for the insurance firm informed the
2015, which was a pre-existing disease and the claim was
apex court that during the pendency of proceedings, the not admissible under Clause 4.1 of the terms and conditions
entire claim was paid over to the nominee, except the of the policy being within 48 months from the date of ex-
amount of cost. "Having regard to the age of the respon- piry. Pawan refuted company's claim by placing the docu-
dent (mother of deceased), who is seventy years old and ments on records that he was duly covered under the policy.
the death of the assured on whom she was likely to be
Pawan had bought New India Floater Mediclaim Insurance
dependent, we are of the view that it would be appropri-
Policy for first time in 2015, which was renewed subse-
ate for this court to utilize its jurisdiction under Article 142 quently. The policy, was valid from May 13, 2017, to May
of the Constitution, by directing that no recoveries of the
12, 2018, for sum assured of Rs8,00,000.
amount which has been paid shall be made from the re-
spondent," it said. In October, 2017, during the validity of the policy in ques-
tion, Pawan fell ill. He had fever for 10 days and was ad-
In August 2014, a proposal for obtaining insurance policy mitted to a hospital from October 24, 2017, to November
was submitted by the man and the form contained ques- 15, 2017.
tions pertaining to his health, medical history and required
a specific disclosure on whether any ailment, hospitaliza- He was diagnosed with thick walled cavity RML/RLL (Right
tion or treatment had been undergone by him. lung). He was referred to the Department of Pulmonary
Medicine, PGI, and was again admitted for 13 days at the
The proposer had answered these queries in the negative, hospital. Later, when Pawan submitted total claim of
indicating that he had not undergone any medical treat- Rs.2,85,833 the insurance company denied it by stating that
ment or hospitalization and was not suffering from any ail- the claimant was a case of pneumonia and a known chronic
ment. Based on the information provided by the man, an kidney disease since 2015, which was a pre-existing ailment.
insurance policy was issued. Later in September 2014, he Pawan also placed the record of the treatment at the PGI,
died following which a claim was lodged. During indepen- which proved that he was suffering from fungal infection
dent investigation, the hospital treatment records were and diagnosed with thick walled cavity RML/RLL (Right
obtained and it revealed that he had been suffering from lung). It is also recorded that during the period of
Hepatitis C. complainant's hospitalisation, his transplanted kidney was
The insurance firm had repudiated the claim in May 2015 functioning normally. Hence, no treatment of any sort was
on account of non-disclosure of material facts. The nomi- given for kidney disorder.
nee had initiated a consumer compliant before the district After hearing arguments the commission observed: "We
consumer disputes redressal forum which had directed the have no option except to hold it a case of deficiency in ser-
insurance firm to pay full death claim together with inter- vice as well as unfair trade practice by the insurance firm."
est. The appeal against the order was rejected by the state The commission's order states: "It is clear from the records
consumer disputes redressal commission and later, the
that treatment did not pertain to kidney problem, but a
NCDRC also dismissed the plea of the insurance firm.
fungal infection. It has no connection or relation with the
kidney disorder and is a pre-existing disease for invoking of
Pre-existing disease no reason to deny
the exclusion Clause 4.1"
insurance claim: Panel The order further states: "In view of this the insurance firm
While directing New India Assurance Company Limited to is directed to pay the total claim of Rs.2,85,833 to the com-
pay a total claim of Rs.2,85,833 to a city resident, along plainant along with 8 per cent interest per annum from the
with 8 per cent interest per annum, the Consumer Disputes date of repudiation, which is December 29, 2017, till
Redressal Commission, Chandigarh, has held that an insur- realisation."

The Insurance Times, November 2020 47