Sri Partha Kumar Basu, Hon’ble Member

The instant petition is regarding a dispute about health insurance claim with a prayer by the complainant against the OPs for refund of policy premium amount and a compensation for mental agony along with cost. The complaint was admitted for adjudication u/s 35 of the Consumer Protection Act 2019.

The case is running ex-parte against the O.P. No. 2 PSU bank at whose premises the   policy was allegedly taken and the OP 1 is the health insurance company who is the contesting opposite party.

The case of the complainant in gist is that the OP 2 is the branch of the bank where the complainant maintains a salary account. It is the case of the complainant that on request of an agent of the bank, a health insurance policy was purchased by the complainant on 15.07.2019 from OP 1 Insurance company. It is alleged in the complaint petition that no claim benefit was received inspite of sending some bills in respect of medical consultations and tests during 2020. The complainant states that during renewal of the health insurance in 2021 full coverage of health insurance expenses was promised by insurer which would have made available after completion of 3 (three) years with a Sum Assured of Rs. 3,00,000/- for this family health insurance. The patient/complainant approached hospital for an operation for removal of implant at right leg for an estimated expenditure of Rs. 1,00,000/- that was not approved by OP1 insurer. Having no other way out the complainant had to get operated at that hospital on 29.10.2021 for a renegotiated expenses for Rs. 50,000/-. Post operation the complainant deposited Rs. 20,000/- on the same day on 29.10.2021 and thereafter submitted insurance claim documents but the claim was not allowed. So the complainant had to absorb the entire expenses towards hospital expenses and hence the case.

The complainant has prayed before the commission for a direction on the OPs for refund of an amount of Rs. 60,000/- including Rs. 10,000/- for miscellaneous medical tests along with a compensation of Rs. 50,000/- and cost for deficiency in services and unfair trade practices by the O.P. Nos. 1 and 2.

In support of his petition the complainant exhibited the policy certificate dated 15.07.2021 for period from 20.07.2021 to 19.07.2022 with annual premium of Rs. 10,502/-, policy welcome letter dated 15.07.2021th list of documents supplied by insurer, medical advices dated 04.10.2021 and 12.11.2021, discharge summary and bill for Rs. 49028/- both and few additional miscellaneous diagnostics bills dated 30.10.2021.

In their Written Version, the OP 1 submitted inter-alia that the complaint deserves dismissal in limine since the claim was repudiated as per terms and conditions of the health insurance policy. It is stated in the W/V that the said one is a group health insurance policy for the period 20.07.2021 to 19.07.2022. It is also averred by the OP1 that an operation was required for removal of the implant due to an accident that took place in 2013 and the instant insurance policy commenced only on 20.07.2019. In the W/V, the Insurer stated that as an accident took place in 2013 and the policy inception date was on 20.07.2019 hence as per policy terms and condition there is a 4 year waiting period for pre-existing disease (PED) for which the claim was denied under policy exclusion number 1.

All other allegations as stated in the complaint petition were denied except those which are matters of record.

The OP1 exhibited the following documents to substantiate their arguments:-

1. Covering letter dated 20.07.2021 to complainant listing out supplied policy documents
2. Copy of policy dated 15.07.2021 for 2021-22
3. Policy premium certificate for 2021-22
4. Letter dated 28.10.2021 communicating requirement of additional documents to complainant
5. Policy terms & conditions (page 1 to page 33)

Heard, perused and considered the arguments in full as advanced by both the sides read with available records and documents.

It appears from exhibits that the health insurance policy is a family floater scheme under plan ‘A’ which commenced on 20.07.2019 and was renewed upto 19.07.2022 i.e. 3^rd. consecutive years for the family members including the complainant with a sum assured of Rs. 3,00,000/-. As per condition precedent in the terms and conditions of the health insurance policy as exhibited by the insurer vide Clause no. 36 it appears that for a Pre-existing disease (PED), no claim is allowed within 4 years prior to the first policy issued by the insurers which states as below :-

‘Any condition, ailment or injury or related conditions for which you had signs and symptoms, and / or were diagnosed, and / or received medical advice / treatment within 48 months to prior to the first policy issued by the insurers’.

The complainant has raised some points about medical test of insured not done during inception of the policy wherein the OP no 1 replied that the policy was accepted on the basis of insured’s declaration on good faith. All material facts on the health should have been declared by the insurer which forms a basis for issuance of policy and under writing the risk. The complainant also alleged that he was not intimated about the PED and even if it is so, then also he did not get refund on account of medical bill of his spouse. The OP1 denied having received any such claims on account of OPD bills which is limited only up to Rs. 500/- per year.

The complaint has been filed u/s 35 of the Consumer Protection Act 2019. No additional point except as discussed above came out during the questionnaire and replies exchanged between the contesting parties. The reply of the OP1 is found acceptable on the point raised by complainant about medical tests not done during inception of the policy by OP no 1 as it is the admitted position of the OP1 that the policy was accepted based on uberrima fides which means it was accepted on the declaration on ‘utmost good faith’. On the other hand the contention of OP1 that ‘all material facts should have been declared by the insured/complainant’ is found out of place since there is no whisper from any corner about any counter allegation against complainant/insured on suppression of material fact or non-disclosure about that. The allegation by complainant about not getting refund of medical bills of spouse are not supported by any cogent evidence and therefore not sustainable.

Now coming back to the moot point of disputes, it is contended by the complainant that the information that an insurance claim would become effective only after completion of 3 years, was not intimated to him by insurer ever. But the OP1 contested having replied that in the policy terms and conditions, it is clearly stated that PED would not be covered for the initial 4 years from inception of policy. Before deciding this main question for consideration it is to be examined whether the OP1 was right in repudiating the claim of the Complainant. It is also questioned by complainant that while the OP1 promised a coverage of A to Z services that would become effective after completion of 3 years but no such information was ever given by the Regional Manager of the OP no 1 company. The OP1 resisted this contention of the complainant replying in W/V as follows :-

‘It is to be noted that the accident happened in 2013 and the policy inception date was on 20^th July 2019. Hence as per policy terms and condition there is 4 years waiting period for pre-existing therefore the claim was denied under policy exclusion number 1.

Thus the claim of the insurance company OP1 that no claim can be accepted in view of 4 years waiting period for PED cases, as per terms & conditions needs to be examined in reference to extant rules, regulations and records/documents.

Factually, the said policy commenced from 20.07.2019 to 19.07.2020 and was renewed from time to time from 20.07.2020 to 19.07.2021 and lastly till 20.07.2021 to 19.07.2022. The OP1 exhibited the documents containing policy certificate of 2021-22 and policy terms and conditions of the concerned ‘Arogya Plus Policy’. Now to deal with this dispute, we deem it appropriate to refer to the IRDAI rules in this respect. As per IRDAI circular no IRDAI/HLT/REG/CIR/046/02/2020 dated 10/02/2020 amended in respect of provisions of Guidelines on Standardization of Exc. by reference invited to the provisions of Guidelines on Standardization of Exclusions in Health Insurance Contracts vide Ref  No. IRDAI/HLT/REG/CIR/177/09/2019 and Modification Guidelines on Standardization in Health Insurance vide Ref no. IRDAI/HLT/REG/CIR/176/09/2019 dated 27^th September 2019, following Amendments were issued on the “Definition of Pre-Existing Disease (not applicable for Overseas Travel Insurance)”:-

“Pre-existing Disease means any condition, ailment, injury or disease:

1. That is/are diagnosed by a physician within 48 months prior to the effective date of the policy issued by the insurer or its reinstatement.                                                                                                                                                                                                                                                                           OR
2. For which medical advice or treatment was recommended by, or received from, a physician within 48 months prior to the effective date of the policy issued by the insurer or its reinstatement.”

The abovesaid restrictive period has now neen reduced to 36 months as follows as per IRDAI regulations vide no CG-TL-E-22032024-253325 – PART III :

Clause no (1.6).

“Pre-existing disease (PED)” means any condition, ailment, injury or disease: a) that is/are diagnosed by a physician not more than 36 months prior to the date of commencement of the policy issued by the insurer; or b) for which medical advice or treatment was recommended by, or received from, a physician, not more than 36 months prior to the date of commencement of the policy”

Also as per exhibited terms & conditions of OP1 Insurance company for a PED, the waiting period is 4 years as per CL. no. 36 which states inter – alia that any ailment or injury or related conditions for which there are signs and symptoms which was diagnosed medical advice or treatment was received within 48 months prior to the first policy issued by the insurers.

In view of above said pre-conditions and the instant case in hand, it appears that the said health insurance policy commenced for the first year from 20.07.2019 to 19.07.2020 and continued for the 3^rd year upon renewal till 19.07.2022 in the name of insured by the OP1 Insurance Company that was not allowed by letter dated  28.10.2021 for pre- existing disease. It is further observed that the claim was not entertained not due to any other reasons like non-discloser or suppression of material fact etc. about the accident which took place in 2013 admittedly by both sides. It is also apparent from the admitted position of both sides that the PED pertains as back as in 2013. Hence the said ailment/treatment did not take place during preceding 48 months or for that matter for 36 months (as amended) prior to commencement of the policy on 20.07.2019. To get a claim, the complainant is required to have no PED during preceding 36 months i.e. from 20.07.2016 to 19.07.2019, whereas the accident occurred in 2013 i.e. beyond PED period. As per amended circular of IRDAI as stated above, a PED is to be reckoned upto preceding 36 months only. Hence the claim of the OP1 Insurance company about repudiation of this claim of a PED ailment which occurred beyond 36 months as per amended IRDAI guidelines does not hold good as the injury or related conditions occurred in 2013 and the medical treatment was received beyond 48 months prior to the first policy issued by the insurer on 20.07.2019. Thus the repudiation by the OP1 Insurer is a violation of IRDAI rules in this respect as per IRDAI circular no IRDAI/HLT/REG/CIR/046/02/2020 dated 10/02/2020 (as amended) and their conditions of OP1 as stated in the policy terms & conditions set in by the OP1 insurer itself since the insurer accepted the PED as declared by the Insured and decided annual premium accordingly for coverage terms as specifically mentioned in schedule.

Further the OP1 insurer in their W/V and evidences tried to refute by mentioning ‘Pre-Existing conditions’ read with ‘waiting period’ with vague wordings and reasoning out their claim. Upon examination of terms & conditions of the exhibited policy it appears from the CL. (1) of the ‘Exclusion list’ -Annexure B that :-

“any illness / disease / injuries / health condition with pre-existing (treated/untreated/declared/not declared in the proposal form) when the cover incepts for the first time are excluded upto 4 years of this policy being in force continuously. However this exclusion would not be applicable from fourth continuous renewals upto minimum of Sum Assured and/or limit under four previous policies.”

Therefore contention of the OP1 insurer that the 4 -Year waiting period from the start date of policy would apply to all type of treatments is not correct for this specific case as per it’s factum. Here the policy of the complainant incepted for the first time on 20/07/2019 and the admission for hospitalisation was on 29/10/2021. Even if there is 4 year waiting period but the same is applicable for PED. Since the PED in this case occurred beyond 36 months from the inception of the policy hence the contention of the OP1 to repudiate the claim based on waiting period of 4 years for PED is not tenable according to IRDAI guidelines. It is also a routine for the Insurance Companies to ensure that there are no ailments prevailing or if some ailments are prevailing to the insured before issuing policy at the time of inception, then the premium is decided accordingly to cover the risk. Here in this case no such findings have been made contrary to that and as per the evidence produced from the side of the OP1 insurer. Hence the Insurance Company is duty bound to allow the claim of insurance coverage to the insured who was treated after subscribing to the policy on pre-set terms and conditions.

It can further be dovetailed from the decision of Hon'ble Supreme Court in the Civil Appeal No. 8245 of 2015 titled Sulbha Prakash Motegaoneker v. Life Insurance Corporation of India, decided on 05.10.2015, wherein, it was observed that even, and even, suppression of information regarding any pre-existing disease, if it has not resulted in death or has no connection to cause of death, would not disentitle the claimant for the claim.

Hence the complaint’s petition is allowed on account of proven case of deficiency in services being carried out by the opposite parties for not providing the facilities to the complainant as per extant terms & conditions of the policy. The complainant/ insured suffered from mental pain & agony at the hands of the OP1 Insurer, act & conduct of whom amounts to deficiency in service and the complainant is required to be compensated in accordance with law. The OP1 Insurance company is liable for allowing the insurance claim with all continual benefits that the complainant had already been enjoying without reduction of any of the facilities, subject to renewal, and other terms & conditions.

In our considered view the complainant is also entitled for a compensation alongwith cost.

The case is thus disposed of with following directions on the OP1 Insurer :-

1. The OP1 Insurer is directed to refund Rs 49,028/- (Rs. Forty Nine Thousand & Twenty Eight only) to the complainant.
2. The OP1 is directed to make payment of a compensation to the complainant the tune of Rs. 10,000/- (Rs. Ten Thousand) only.
3. The OP1 is directed to make payment of a cost to the complainant for litigation expenses of Rs. 5,000/- (Rs. Five Thousand) only.

Compliance of all the above orders be made within a period of 60 days from the date of this order in default will attract a simple interest @ 12% per annum on all the payments till the date of actual compliance.

The complainant shall be at liberty to put the entire order into execution if all the above orders are not complied by the OP1 within stipulated timeframe.

Applications pending if any, stands disposed of in terms of this Final Order.

Let a plain copy be given to both sides free of cost.

The final order shall be available in the website www.confonet.nic.in.