DISTRICT CONSUMER DISPUTES REDRESSAL FORUM-I,

U.T. CHANDIGARH

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1.       Amrit Kaur w/o Kuldip Singh r/o House No.2054/1, Sector    47-C, Chandigarh.

2.       Kuldip Singh s/o Sardar Gurcharan Singh r/o House No.2054/1, Sector 47-C, Chandigarh.

…..Complainants

                                      V E R S U S

1.       ICICI Lombard, General Insurance Company Limited, House 414, Veer Savarkar Marg, Near Sidhi Vinayak Temple, Prabha Devi, Mumbai through its Branch Manager.

2.       ICICI Lombard, SCO No.24-25, Sector 8-C, Chandigarh, through its Branch Manager.

                                                ……Opposite Parties

QUORUM:   P.L.AHUJA                                                  PRESIDENT

                   RAJINDER SINGH GILL                                MEMBER

ARGUED BY: Sh.Abhishek Arora, Counsel for complainants.

                      Sh.Sandeep Suri, Counsel for OPs.

PER P.L.AHUJA, PRESIDENT

1.                Smt.Amrit Kaur along with her husband Sh.Kuldip Singh have filed this consumer complaint under Section 11 & 14 of the Consumer Protection Act, 1986, against ICICI Lombard General Insurance Company Limited & Anr. - Opposite Parties (hereinafter called the OPs), alleging that on the detailed counseling by the representative of OP No.2 for taking the health insurance policy, the representative of OP No.1 telephonically contacted the complainant No.1 on 20.8.2009 and after that a policy namely Family Protect Premier Policy dated 21.8.2009, copy of which is Annexure C-1 was issued for a sum of Rs.3 lacs for a period of three years with an annual premium of Rs.23,842/- in the joint name of the complainants. OP No.1 charged an amount of Rs.23,842/- for the first two years i.e. from 20.8.2009 to 19.8.2011.  The copy of premium schedule is Annexure C-2.  After taking the insurance policy from the OPs, complainant No.1 suddenly fell ill and got herself admitted at the Fortis Hospital on 7.12.2010, where her angiography was conducted and an amount of Rs.10,000/- was spent. Copy of the record is Annexure C-3.  During the period of policy for the next year, OP No.1 sent a renewal notice to complainant No.1 for the period valid from 8.9.2011 to 7.9.2013.  In the meantime, the complainant No.1preferred a claim with OP No.1 for the refund of Rs.10,000/- incurred on the angiography and that amount was given back to her.  However, in the next year’s premium instead of charging a sum of Rs.23,842/- they charged an exorbitant sum of Rs.41,724/-, in which apart from premium of Rs.23,842/- an amount of Rs.13,882/- was charged towards loading of claims without giving any prior notice or information. The copies of renewal notice and the premium schedule are Annexure C-4 and C-5.  It has been further contended that complainant No.2 fell ill and the doctors of Max Super Specialty Hospital advised angiography, which was done and an amount of Rs.10,000/- was spent. A request was sent to OP No.1 on 28.8.2012 for refund of the amount but OP No.1 instead of refunding the amount denied the claim of complainant No.2 on the ground that the earlier disease was not disclosed at the time of policy inception. The copies of the bills dated 24.8.2012, 27.8.2012, 30.8.2012 till 8.9.2012 and the denial of cashless access by OP No.2 are Annexure C-6 to C-9.  It has been further contended that in the month of September, 2012, the complainant No.2 fell ill and he consulted the doctors at Fortis Hospital, Mohali, who advised him a surgery, as there was blockage in the arteries. The complainant No.2 got himself admitted in Fortis Hospital on 31.8.2012, where the surgery was conducted on 1.9.2012 and he was discharged on 8.9.2012 and a sum of Rs.2,05,919/- was spent by him on his treatment. The complainants preferred a claim of that amount with OPs No.1 and 2 but OP No.1 instead of paying the amount to them, sent a letter on 10.9.2012 – Annexure C-11, whereby they were informed that their policy was going to be terminated because they had not disclosed the fact of earlier coronary artery disease suffered in 2007.  The copies of medical bills and the notice of termination of policy are Annexure C-10 and C-11.  It has been contended that at the time of issuing the policy all the medical (history ?) of the complainants was disclosed earlier to the representatives of OP No.2 and then at the time of issuing the policy. The said fact was also brought to the knowledge of OP No.1 but at that time OPs did not raise any objection. No medical examination of the complainants was conducted prior to the issuance of the policy in favour of the complainants. However, now the OPs with mala fide intention just to harass and humiliate the complainants have wrongly and illegally terminated the policy of the complainant vide letter, copy of which is Annexure C-12.  The complainants have alleged unfair trade practice and deficiency in service on the part of OPs. The complainants have made a prayer for a direction to the OPs to refund the entire amount spent on the medical treatment of complainant No.2 along with interest @ 18% p.a. ; to pay Rs.1 lac as damages on account of mental agony, harassment and monetary loss suffered by them.

2.                OPs No.1 and 2 in their written reply have pleaded that the complainants have not produced the complete record of Max Super Specialty Hospital as well as Fortis Hospital and the same is necessary for the just decision of the present matter. It has been stated that the OPs have specifically stated in their letter of repudiation – Annexure C-9 that the complainant No.2 - Sh.Kuldip Singh had undergone treatment and a stent had been placed in the LAD in July, 2007 and the said complainant was unknown (known ?) case of CAD, OLD PTCA, STENT to LAD (JULY, 2007). The above facts have not been denied by the complainants. It has been stated that the stent once placed cannot be removed and the claim in respect of the same would be payable in case, the complainants are able to disprove the said fact with cogent evidence. It has been further stated that the claim has been repudiated on the ground that the claimant was suffering from a pre-existing disease, in respect of which, he had taken the treatment. It has been averred that as per Exclusion Clause 3.1, in case of any pre-existing illness, the claim shall be excluded from the scope of the cover under the policy. The claim was also rejected under Incontestability & Duty of Disclosure Clause. The pre-existing diseases would have been covered in case the policy was in existence and covered for a period of four years consecutively immediately preceding the period of insurance. It has been stated that the policy in question was in 4^th year and the claim has been rightly repudiated. It has been further submitted that even in the information sheet produced by the complainants themselves at page No.16 and 17 the columns mentioning the name of pre-existing illness have been left blank and in Annexure C-4 at page No.29, it has been mentioned as none. It has been stated that even after receiving the policy of insurance no pre-existing illness has been diverged (divulged ?) to the OPs. It has been stated that merely conducting or non conducting a medical examination does not take away the duty of the person applying for a policy of insurance to diverse (divulge ?) the complete facts. It has also been stated that the complainants were requested to go through the details as mentioned in the policy and in case of any discrepancy or error in the information mentioned, they were required to inform the OPs to make corrections, if required. However, the complainants did not raise any dispute thereof. It has been averred that the policy of insurance is based on trust and is governed by the principles of “Ubremma Fides”. It has been stated that the concealment of material facts by the complainants about the previous disease gives a valid ground for rejection of the claim. It has also been stated that had the complainants provided the complete information at the time of taking the policy, the OPs may have either taken an additional premium at the time of inception of the policy itself or may not have entered into a contract of insurance.

3.                In their rejoinder, the complainants have pleaded that it was made clear to the representative of OP No.2, who visited the house of the complainants for counseling and also telephonically to OP No.1 about all the facts regarding the treatment of the complainant No.2 - Kuldip Singh but OPs preferred to issue the policy to them. It has been averred that no written formalities were done by the representatives of the OPs and no terms and conditions were narrated by the OPs to the complainants, on which they are now relying upon. It has been stated that the OPs have not mentioned the name of any agent or any person, who completed the formalities nor they have filed any affidavit of their agent to deny the facts alleged by the complainants. It has been stated that nothing has been concealed regarding the medical treatment of complainants but the agent of the OPs after being satisfied, preferred to issue the policy to them.

4.                The parties led evidence in support of their contentions.

5.                We have scrutinized the entire evidence and heard the arguments addressed by the learned Counsel for the parties.

6.                It is the admitted case of the parties that complainant No.1 - Smt.Amrit Kaur purchased one ICICI Lombard Health Care Policy – Annexure C-2  from OP No.1 covering herself and her husband Sh.Kuldip Singh for sum insured of Rs.3 lacs, for the period from 20.8.2009 to 19.8.2010 on a total premium of Rs.23,842/-. The policy was auto renewed from 20.8.2010 to 19.8.2011. It is the admitted case of the parties that complainant No.1 Smt.Amrit Kaur underwent Coronary Angiography test at Fortis Hospital vide discharge summary, copy of which is Annexure C-3, wherein, she spent an amount of Rs.10,000/-. The complainant No.1 has also admitted that she preferred a claim with OP No.1 for refund of Rs.10,000/- incurred on the angiography and that amount was given back to her. The trouble arose when complainant No.2 approached Max Super Specialty Hospital, wherein, he underwent an angiography test and spent an amount of Rs.10,000/- but when a claim was preferred with OP No.1, it was refused on the ground that the earlier disease was not disclosed at the time of policy inception. OP No.1 denied cashless access vide letter dated 4.9.2012 – Annexure C-9 on the ground that as per the documents furnished by Sh.Kuldip Singh, he was a known case of CAD, OLD PTCA, STENT to LAD (JULY, 2007) even before the commencement of the policy and the pre-existing illness was excluded from the scope of cover and policy. The pre-authorization request was also denied on account of standard exclusion. Complainant No.2 was admitted in Fortis Hospital on 31.8.2012 and a surgery was got conducted on 1.9.2012. He was discharged from the hospital on 8.9.2012 and a sum of Rs.2,05,919/- was spent on his treatment vide copy of the bill of the Fortis Hospital Annexure C-10. However, when a claim was preferred with OPs, OP No.1 sent a letter dated 10.9.2012, copy of which is Annexure C-11 to complainant No.1 alleging that at the time of confirmation call for the policy, the complainant No.1 had not disclosed that the insured was suffering from any pre-existing disease or ailment, though he was a known case of Coronary Artery disease and had undergone PTCA in 2007, therefore, a notice of 15 days for termination of the contract of insurance was given to her. After that vide letter dated 1.10.2012 – Annexure C-12 OP No.1 cancelled the policy in favour of the complainants on 1.10.2012.

7.                The most material question for determination in this case is whether the complainant No.2 was suffering from a pre-existing disease at the time of purchasing policy, copy of which is Annexure C-2, from OP No.1 on 21.8.2009 and if so, whether the complainants suppressed that pre-existing illness from the OPs.  

8.                It has been urged by the learned Counsel for OPs No.1 and 2 that complainant No.2, insured was a known case of Coronary Artery disease and he underwent PTCA in 2007 and a stent was placed in his body in July, 2007 but this fact was not disclosed by the complainants at the time of inception of the policy on 20.8.2009. He has argued that the pre-existing illness of Sh.Kuldip Singh was specifically suppressed from the OPs. He has drawn our attention to Information Sheet - Annexure C-1 and insurance policy – Annexure C-2 and has contended that the columns of pre-existing illness in respect of the insured were left blank. He has contended that in the information sheet as well as the policy – Annexure C-1 and C-2, the pre-existing illness for a period of four years was specifically excluded and it was made clear that the misrepresentation, non description or non-disclosure of any material could make the insurance policy voidable at the option of the insurance company. The learned Counsel for the OPs has also drawn our attention to Exclusion Clause No.3 in the terms and conditions – Annexure R-1 and has vehemently argued that the claims arising on account of or in connection with any pre-existing illness were to be excluded from the scope of cover under the policy. The learned Counsel for the OPs has vehemently argued that even in the renewal notice – Annexure C-4 and the renewed policy – Annexure C-5 for the period from 8.9.2011 to 7.09.2012 it was not disclosed that complainant No.2 was suffering from a pre-existing illness. Rather in the policy – Annexure C-5 the pre-existing illness of both the insured was shown to be none and the complainants did not bring it to the notice of OPs that there was some error or discrepancy in the policy, which goes to show that they misrepresented the facts. The learned Counsel for the OPs has drawn our attention to the rulings cited in the written reply of OPs and has fervently pleaded that utmost good faith is a most important principle of insurance and concealment of material information regarding one’s health condition can lead to the violation of the insurance contract. The learned Counsel for the OPs has urged that since the complainant No.2 deliberately suppressed that he was a known of Coronary Artery disease and had already undergone PTCA in 2007, therefore, OPs were not bound to reimburse the treatment charges to complainant No.2 and the policy in favour of the complainants was rightly terminated.

9.                We have given our thoughtful consideration to the above arguments. It is important to note that the complainants have nowhere denied that complainant No.2 was a known case of CAD, OLD PTCA, STENT to LAD in JULY, 2007. The copies of documents produced by the complainants, after an application was filed by the learned Counsel for the OPs, also prove that complainant No.2 was found suffering from CAD with LV systolic dysfunction in July, 2007 and a stent was placed in him at Fortis Hospital on 13.7.2007. Hence, the only point that remains for consideration is whether the complainants deliberately withheld the information of pre-existing illness from the OPs or not.

10.              It is the admitted case of the parties that the complainants did not fill up any proposal form while purchasing the insurance policy in question from the OPs. The OPs did not get the medical examination of the complainants conducted before issuing the insurance policy. The OPs also did not obtain any written questionnaire regarding the previous illness from the complainants before the issuance of the policy. According to the complainants, it was made clear to the representative of OP No.2, when he visited their house for taking the health insurance policy and also to OP No.1 telephonically about the treatment of Sh.Kuldip Singh, complainant No.2 but inspite of that the OPs preferred to issue the policy to them. According to the complainants, they had disclosed all the facts about the treatment of complainant No.2 - Sh.Kuldip Singh at the time of taking the policy from the OPs. It is also worth noting that the OPs have not produced any such document, which could show that the terms and conditions of the policy were got signed from the complainants before issuance of the insurance policy.  According to the complainants, terms and conditions of the policy were not conveyed to them. Strangely enough, the OPs did not deem it necessary to obtain a declaration from the complainants that they had read and understood the product features, benefits and risk factors, structure of charges, terms and conditions of the proposed plan. The information sheet – Annexure C-1 sent by OP No.1 to the complainant shows that a tele conversation dated 20.8.2009 had taken place with the representative of ICICI Lombard GIC Ltd. for the purchase of health insurance policy and the policy was issued based on that tele conversation. However, it is noteworthy that no CD of that tele conversation has been produced by the OPs. Even the affidavit of the representative of the OPs, who entered into tele conversation with complainant No.1 on 20.8.2009 has been produced to prove that he enquired about the pre-existing illness of the persons insured but they did not disclose any pre-existing illness, therefore, the columns of pre-existing illness were left blank in the information sheet – Annexure C-1 and the policy Annexure C-2. We are of the view that the OPs have deliberately withheld the material evidence from the Forum. Had the CD of tele conversation and/or the affidavits of the representatives of OPs, who went to the house of the complainants and had tele conversation with the complainant No.1 on 20.8.2009 been produced, it would have enabled this Forum to reach at this conclusion that the complainants were specifically conveyed that any illness/disease existing before the inception of the policy for the first 2 years for HAP and 4 years for the rest of the products were excluded from the cover of the policy. We feel that non production of evidence on this aspect warrants an adverse inference against the OPs.

11.              We may also mention that the disclaimer on the information sheet – Annexure C-1 reads as under :-

“The details mentioned herein are indicative and non exhaustive, for complete details on coverage’s, exclusion, terms and conditions please refer to policy wordings provided along with the policy kit.”  

It is important to note that the OPs have not produced any such documentary evidence showing that any policy kit containing complete details on coverage’s, exclusion and terms and conditions was actually supplied to the complainants and the complainants were made aware of the terms and conditions and the exclusion clause. It is also pertinent to note that after taking a premium of Rs.23,842/- against policy for the period from 20.8.2009 to 19.8.2010 – Annexure C-2, when complainant No.1 preferred a claim of Rs.10,000/- for undergoing angiography, the claim was granted to her but in the renewal notice dated 6.9.2011 – Annexure C-4 apart from the premium of Rs.23,842/- for the period from 8.9.2011 to 7.9.2013 an amount of Rs.17,882/- was also charged towards loading for claims. It is nowhere mentioned that the complainants were informed that they would be charged extra premiums towards loading for claims. Complainant No.2 was admitted in Fortis Hospital for undergoing surgery for the period from 31.8.2012 to 8.9.2012. The notice for terminating the contract of insurance was issued by OP No.1 to the complainant No.1 on 10.9.2012 vide Annexure C-11. We are of the view that since it is not proved by the OPs that the terms and conditions relating to previous illness were duly conveyed by them to the complainants before the inception of the policy nor any questionnaire was obtained from them nor any medical examination of the complainants was got conducted, the action of the OPs in canceling the Health Policy vide letters – Annexure C-11 and C-12 w.e.f. 1.10.2012 amounts to unfair trade practice and deficiency in service on their part. We are of the opinion that the complainant No.2 was entitled to be reimbursed for the expenses incurred by him on the surgery during admission in Fortis Hospital from 31.8.2012 to 8.9.2012.

12.              There is no dispute with the proposition of law laid down in the rulings cited in the written reply of OPs that the policy holder is duty bound to reveal all relevant material facts to the insurer in order to avail the insurance policy and utmost good faith is a most important principle of insurance. However, in the instant case, the OPs have failed in their duty to establish that the complete details on coverages, exclusion and terms and conditions were duly conveyed to the complainants before the inception of the policy. We are of the view that when the OPs had taken premium from the complainants w.e.f. 21.8.2009, they could not refuse the reimbursement of the expenses incurred by complainant No.2 for the treatment for the period from 31.8.2012 to 8.9.2012. We are of the opinion that the complainants cannot be penalized for the omission on the part of OPs to convey the exclusion clause and terms and conditions of the policy specifically to them. Accordingly, the OPs are guilty of unfair trade practice and deficiency in service on their part.

13.              For the reasons recorded above, we find merit in the complaint and the same is allowed. OPs are directed to make payment of an amount of Rs.2,05,919/- to the complainants with interest @9% p.a. from the date of preferring the claim upto the date of realization. They are also directed to make payment of an amount of Rs.25,000/- to the complainants for physical and mental harassment. They are also directed to make payment of an amount of Rs.11,000/- towards litigation expenses to them.

14.              This order shall be complied with by OPs within one month from the date of receipt of its certified copy, failing which, OPs shall be liable to refund the above said awarded amount to the complainants along with interest    @ 12% p.a. from the date of preferring the claim upto the date of realization, besides costs of litigation.

15.              The certified copies of this order be sent to the parties free of charge. The file be consigned.