Chandigarh

DF-I

CC/85/2024

ANITA GUPTA - Complainant(s)

Versus

MANIPAL CIGNA HEALTH INSURANCE COMPANY LIMITED - Opp.Party(s)

DEVINDER KUMAR

03 Sep 2024

ORDER

DISTRICT CONSUMER DISPUTES REDRESSAL COMMISSION-I,

U.T. CHANDIGARH

                                     

Consumer Complaint No.	:	CC/85/2024
Date of Institution	:	08/02/2024
Date of Decision	:	03/09/2024

 

Anita Gupta wife of Sh. Satpal Gupta, aged about 69 years, r/o H.No.66, Preet Vihar Mehs Gate, Naha, Patiala Punjab.

… Complainant

V E R S U S

1. Manipal Cigna Health Insurance Company Limited, SCO No.149-150, 1^st Floor, Madhya Marg, Sector 9-C, Chandigarh through its Branch Manager.
2. Manipal Cigna Health Insurance Company Limited, 1^st Floor, Sandhu Tower, Gurdev Nagar, Ferozepur Road, Ludhiana, Punjab 141001 through its Branch Manager.

… Opposite Parties

CORAM :	SHRI PAWANJIT SINGH	PRESIDENT
	MRS. SURJEET KAUR	MEMBER
	SHRI SURESH KUMAR SARDANA	MEMBER

                                                                               

ARGUED BY	:	Sh. Devinder Kumar, Advocate for complainant
	:	Sh. Krishna Kant, Advocate for OPs

Per Pawanjit Singh, President

1. The present consumer complaint has been filed by Anita Gupta, complainant against the aforesaid opposite parties (hereinafter referred to as the OPs).  The brief facts of the case are as under :-

1. It transpires from the allegations, as projected in the consumer complaint, that in the year 2018, the agent of M/s HDFC Ergo General Insurance Company Limited (hereinafter referred to as “previous insurer”) approached the complainant and explained about the features of health insurance policy and by believing his words, complainant purchased a health insurance policy and got the same renewed from time to time and the last policy obtained/renewed from the previous insurer was valid w.e.f. 29.11.2021 to 28.11.2022 (Annexure C-1).  In the month of October 2022 i.e. prior to the expiry of the aforesaid policy, agents of Manipal Cigna Health Insurance Company Limited/OPs 1 & 2  (hereinafter referred to as “present insurer”) approached the complainant and explained about the features of the health insurance policy and allured her to port the policy from the previous insurer and on their allurement, complainant agreed and ported the policy with the present insurer upon which insurance policy (Annexure C-2) valid w.e.f. 29.11.2022 to 28.11.2023 (hereinafter referred to as “subject policy”) was issued.  In the month of April 2023, complainant suffered pain in lower back and radiating to bilateral lower limb and was unable to stand even for five minutes. On this, on 1.4.2023, complainant alongwith her husband visited the Artemis Hospital, Gurugram (hereinafter referred to as “treating hospital”) for check up and the doctor advised medicine and surgery.  On the advice of doctor, complainant visited the treating hospital on 1.4.2023, 6.8.2023 and 13.8.2023 as per medical slips (Annexure C-3 to C-5).  Prior to conducting surgery, request for cashless facility was sent by the treating hospital to the present insurer, but, instead of approving the same, they vide letter dated 4.8.2023 (Annexure C-6) raised certain queries, but, 3 days later, OPs rejected the cashless facility vide letter dated 7.8.2023 (Annexure C-7) on the ground that as per the available documents, patient (complainant) had history of Diffuse Disc Bulge since 16.3.2022 and as the aforesaid material information was not disclosed by her at the time of inception of the policy, her claim was repudiated under clause VIII.1.  The treating hospital had raised bill to the tune of ₹3,23,621/- (Annexure C-9) which was paid by the complainant vide payment receipts (Annexure C-10 Colly.) and copy of discharge summary is Annexure C-8.  Besides that the complainant had also spent ₹24,980/- on pre and post medical expenses as per bills (Annexure C-11 colly.) and thereby incurred total amount of ₹3,48,601/- on her treatment. Not only this, on receipt of claim form, OPs terminated the insurance policy and forfeited the premium amount vide letter dated 8.11.2023 (Annexure C-13) and finally rejected the claim of the complainant vide letter dated 17.11.2023 (Annexure C-14). In this manner, the aforesaid act of the OPs amounts to deficiency in service and unfair trade practice. OPs were requested several times to admit the claim, but, with no result.  Hence, the present consumer complaint.
2. OPs resisted the consumer complaint and filed their written version, inter alia, taking preliminary objections of maintainability, cause of action and concealment of facts.  It is alleged that, in fact, complainant had undergone MRI scan and as per the MRI report dated 16.3.2022 for LS spine (i.e. prior to policy inception) it was noted that the complainant was diagnosed as a case of Diffuse Disc Bulge and as she had concealed the said disease at the time of inception of the policy, she is not entitled for the reliefs prayed for.  On merits, admitted that the complainant had obtained the subject policy, valid w.e.f. 29.11.2022 to 28.11.2023 (Ex.OP1&2/2), from the OPs by porting it from the previous insurer.  It is further alleged that, in fact, complainant had clearly marked ‘No’ in the proposal form against the column “ix Bone, joints and muscle disorders” making clear that the she had not disclosed the pre-existing disease from which she was suffering at the time of inception of the policy and accordingly her cashless request as well as claim was rightly rejected/repudiated and the policy was terminated as per the terms and conditions of the subject policy. The facts as stated in the preliminary objections have been reiterated. The cause of action set up by the complainant is denied.  The consumer complaint is sought to be contested.
3. Despite grant of sufficient opportunity, rejoinder was not filed by the complainant to rebut the stand of the OPs.

2. In order to prove their case, parties have tendered/proved their evidence by way of respective affidavits and supporting documents.
3. We have heard the learned counsel for the parties and also gone through the file carefully.
   1. At the very outset, it may be observed that when it is an admitted case of the parties that the complainant had obtained the first policy in the year 2018 from the previous insurer i.e. HDFC Ergo General Insurance Company Ltd. and got the same renewed annually and the last policy was obtained/renewed w.e.f. 29.11.2021 to 28.11.2022  (Annexure C-1) and thereafter on the assurance of agents of the OPs, complainant had agreed to port the aforesaid policy  from the previous insurer to the OPs i.e. the present insurer after which the subject policy, valid w.e.f. 29.11.2022 to 28.11.2023, was issued and being suffering from lower back pain complainant had undergone spine surgery in the treating hospital where she remained admitted w.e.f. 16.8.2023 to 20.8.2023, as is also evident from the discharge slip (Annexure C-8) and when the request for cashless facility was made to the OPs/present insurer the same was rejected vide letter (Annexure C-7) on the ground of concealment of material facts by the complainant, as a result of which the complainant was compelled to incur total amount of ₹3,48,601/- on her treatment, including ₹3,23,621/- paid to the treating hospital, as is also evident from the payment receipts/bills (Annexure C-9 to C-11) and finally the claim was rejected by the OPs vide repudiation letter (annexure C-14) and the subject policy was terminated vide letter (Annexure C-13), the case is reduced to a narrow compass as it is to be determined if the OPs are unjustified in rejecting/repudiating the genuine claim of the complainant and terminating the subject policy and the complainant is entitled to the reliefs prayed for in the consumer complaint, as is the case of the complainant, or if the OPs have rightly rejected/ repudiated the claim of the complainant and the consumer complaint of the complainant, being false and frivolous, is liable to be dismissed, as is the defence of the OPs.
   2. In the backdrop of the foregoing admitted and disputed facts on record, one thing is clear that the entire case of the parties is revolving around the terms and conditions of the subject policy, repudiation letter and other documents having been relied upon by the parties.
   3. As per the case of complainant, OPs have denied the cashless request vide letter (Annexure C-7) and thereafter repudiated the claim vide letter (Annexure C-14) and also terminated the policy vide letter (Annexure C-13) on the ground of non-disclosure of material facts/pre-existing ailments at the time of proposal. The relevant portion of the letter (Annexure C-7) is reproduced below for ready reference :-

“1. We have received Cashless request of Mrs. Anita Gupta admitted at for Low back pain. Claimant is covered under ManipalCigna Health Insurance Prohealth (Protect_V6) policy since 29 Nov 2022. As per the available documents patient had History Diffuse Disc bulge since 16-03-2022, which is material to policy decision and was not disclosed in proposal form at the time of policy inception. Hence the claim stands repudiated under Clause VIII.1. Duty of disclosure. We regret our inability to admit this liability under the present policy conditions.”

 

4. Further, the relevant portion of the letter dated 8.11.2023 (Annexure C-13) terminating the subject policy is also reproduced below for ready reference:-

“We regret to inform you that your ManipalCigna Health Insurance policy no. PROHLX050021751 has been terminated with effect from 07-11-2023 due to non-disclosure of Reject for terminate in view of non disclosure of medical history of adverse mri report with vertebral canal stenosis.

In view of the aforementioned reason, the premium paid by you shall be forfeited without any refund.”

 

5. Thus, one thing is clear on record from the above documents that the OPs have firstly denied the pre-authorisation of cashless hospitalisation of the complainant on the ground of non-disclosure of material facts/pre-existing ailment at the time of filling proposal form on the ground that the complainant had been suffering from “Diffuse Disc Bulge” before that and thereafter also cancelled the policy. 
6. It is an admitted case of the parties that the complainant had been purchasing/obtaining the health insurance policy since the year 2018 from the previous insurer/HDFC and continued with the aforesaid insurer till the year 2022 and after that she ported the said policy with the OPs vide subject policy (Annexure OPs 1&2/2) and relevant portion of the portability details given in the subject policy are reproduced below for ready reference :-

        “PREVIOUS INSURED DETAILS

Name of Insured person	Date of first enrollment	Previous insurer	Previous policy Number	Type of cover	Total ported sum insured	Break up of ported sum insured	Waiting period waived off	Cumulative bonus
Anita Gupta	29-Nov-2018	HDFC Ergo General Insurance Company Ltd.	28052035 05002100 000	MEDI CLAIM	300000	450000	3 years	0

 

7. On behalf of complainant, reliance has been placed on the circular/guidelines dated 1.1.2020 issued by the IRDA through which certain guidelines have been issued for the portability of policy, including health policy, and the relevant portion of the same in case of migration of the policy is reproduced below for ready reference :-

“4. Migration shall be applicable to the extent of the sum insured under the previous policy and the cumulative bonus, if any, acquired from the previous policies.

5. Only the unexpired/residual waiting period not exceeding the applicable waiting period of the previous policy with respect to pre-existing diseases and time bound exclusions shall be made applicable on migration under the new policy.

6. Migration may be subject to underwriting as follows:

a. For individual policies, if the policyholder is continuously covered in the previous policy without any break for a period of four years or more, migration shall be allowed without subjecting the policyholder to any underwriting to the extent of the sum insured and the benefits available in the previous policy.

b. Migration from group policies to individual policy will be subject to underwriting.

c. Where underwriting is done, the insurance company shall convey its decision to the policyholder within 15 days as per Regulation 8(6) of IRDAI (Protection of Policyholders' interests) Regulations 2017.”

 

8. Since it has come on record that the complainant had not purchased the health policy first time from the OPs in the year 2022, rather the health policy was originally purchased by the complainant from the previous insurer in the year 2018 and after portability of the same, the said policy continued upto 2023 i.e. the subject policy, even as per the terms and conditions of the subject policy (Annexure OP1&2/2), the disease/ailment (Diffuse Disc Bulge), from which the complainant had suffered in the year 2023, for the purpose of treatment expenses, does not bar the claim of complainant.  The relevant portion of Standard exclusions is reproduced below for ready reference:-

“E.l. Standard Exclusions

E.l.1. Pre-existing Disease Code-Excl. 01

a.   Expenses related to the treatment of a Pre-existing Disease (PED) and its direct complications shall be excluded until the expiry of applicable months (24 months for Preferred, Premier plan/ 36 months for Plus, Accumulate plan/ 48 months for Protect plan) of continuous coverage after the date of inception of the first policy with us.

b.   In case of enhancement of sum insured the exclusion shall apply afresh to the extent of sum insured increase.

c.   If the Insured Person is continuously covered without any break as defined under the portability norms of the extant IRDAI (Health Insurance) Regulations then waiting period for the same would be reduced to the extent of prior coverage.

d.   Coverage under the policy after the expiry of Pre-existing disease waiting period for any pre-existing disease is subject to the same being declared at the time of application and accepted by us.”

9. In the present case, the date of inception of the first policy shall be counted as 29.11.2018 when the first policy was issued by previous insurer and later on when the same was ported with the OPs. Thus, even as per the guidelines issued by the IRDA in the aforesaid circular, the case of the complainant is not covered under the exclusion clause of pre-existing disease on the basis of the discharge summary which has been relied upon by the OPs which clearly indicates that the past medical history was noticed by the hospital only in the year 2023 i.e. after issuance of the first policy.
10. The learned counsel for the complainant has referred to the judgment of the Hon’ble Apex Court in Manmohan Nanda Vs. United India Insurance Co. Ltd. & Anr., I (2022) CPJ 20 (SC) in which it was held that the prudent insurer has to gauge possible risk that policy would have to cover and accordingly decide to either accept proposal form and issue policy or decline to do so.  The relevant portion of the judgment is reproduced below for ready reference:-

“66. Viewed in the aforesaid perspective, it is held that the respondent insurance company could not have repudiated the policy on the ground that acute myocardial infraction suffered by the appellant on landing at San Francisco, USA was a “pre-existing and related complication” which was excluded under the policy. The insurer was informed about the pre-existing condition of the appellant, namely, diabetes mallitus-II and it was for insurer to gauge a related complication under the policy as a prudent insurer and then issue the policy when satisfied. In the absence of the same, the treatment availed by the appellant for acute myocardial infraction in USA could not have been termed as a direct offshoot of hyperlipidaemia and diabetes mellitus so as to be labelled as a pre- existing disease or illness which the appellant suffered from and had not disclosed the same. At any rate, the appellant had in the proposal form disclosed that he was suffering from diabetes mellitus-II and for which the medical test reports were submitted along with the proposal form which were considered by the insurance company before the policy was issued to the appellant. In fact, the appellant stated in his representation dated 16^th November, 2009, against the repudiation of the policy that he was taking lipid-lowering medicines not because he was suffering from hyperlipidaemia but as it was customary to take such medication for prevention of cardio-vascular complications in diabetics. He also stated that he had informed the physician, Dr. Jitendra Jain, who examined him prior to obtaining the policy, of the medicines he had been taking. Therefore, the insurance company was well aware of the fact that the insured was a diabetic and was taking all necessary medication for preventing further complications and controlling the disease. Hence in our view, there was no suppression of any material fact by the appellant to the insurer.

67. Further on the disclosures made by the appellant with regard to his existing disease, namely diabetes mellitus-II, the insurance company considered the same and issued the policy in question to the appellant. The respondent insurance company as a prudent insurer considered the details given by the appellant in the proposal form and issued the policy. The insurance company did not think that the medical and health condition of the appellant was such which did not warrant issuance of a mediclaim policy. The insurance company therefore did not decline the proposal of the assured as a prudent insurer.”

11. In view of the foregoing, it is safe to hold that the OPs were unjustified in rejecting/repudiating the claim of the complainant as well cancelling the subject policy and the present consumer complaint deserves to succeed.
12. Now coming to the quantum of amount, since complainant has proved on record the bills/payment receipts to the tune of ₹3,48,601,/- indicating that she had incurred the same on her treatment, it is safe to hold that OPs/insurers are liable to pay said amount to complainant alongwith interest and compensation etc.

4. In the light of the aforesaid discussion, the present consumer complaint succeeds, the same is hereby partly allowed and OPs are directed as under :-
   1. To restore the subject policy in the name of the complainant, as per its terms & conditions, with upto date benefits on payment of requisite charges, if any;
   2. to pay ₹3,48,601/- to the complainant alongwith interest @ 9% per annum from the date of payment by the complainant i.e. 20.08.2023 onwards.
   3. to pay ₹30,000/- to the complainant as compensation for causing mental agony and harassment;
   4. to pay ₹10,000/- to the complainant as costs of litigation.
5. This order be complied with by the OPs within a period of 45 days from the date of receipt of certified copy thereof, failing which the amounts mentioned at Sr.No.(ii) & (iii) above shall carry penal interest @ 12% per annum (simple) from the date of expiry of said period of 45 days, instead of 9% [mentioned at Sr.No.(ii)], till realisation, over and above payment of ligation expenses.
6. Pending miscellaneous application(s), if any, also stands disposed of accordingly.
7. Certified copies of this order be sent to the parties free of charge. The file be consigned.

03/09/2024	Sd/- [Pawanjit Singh] President
	Sd/-
	[Surjeet Kaur] Member
	Sd/-
	[Suresh Kumar Sardana] Member