Punjab

Ludhiana

CC/20/328

Ashok Kumar - Complainant(s)

Versus

Star Health & Allied Insurance Co.Ltd - Opp.Party(s)

Shiv Sharma

08 Feb 2024

ORDER

DISTRICT CONSUMER DISPUTES REDRESSAL COMMISSION, LUDHIANA.

                                                Complaint No:328 dated 03.12.2020.                                                         Date of decision: 08.02.2024.

 

1. Ashok Kumar Sobti Aged 64 years son of Late Shri Madan Lal,
2. Parveen Sobti wife of Shri Ashok Kumar Sobti, both residents of House No.1511, Sector 32-A, Urban Estate, Chandigarh Road, Ludhiana.                                                                              ..…Complainants

                                                Versus

1. Star Health & Allied Insurance Company Ltd., Head Office: No.1, New Tank Street, Valluvarkottam High Road, Nungambakkam, Chennai-600034.
2. Star Health & Allied Insurance Company Ltd., Sandhu Commercial Tower, Near Omaxe Plaza, Ferozepur Road, Ludhiana through its Manager/Officer Incharge.
3. Sumit Sharma, Senior Team Leader, Star Health & Allied Insurance Company Ltd., Sandhu Commercial Tower, Near Omaxe Plaza, Ferozepur Road, Ludhiana.                                                                                                                                                …..Opposite parties

Complaint Under Section 2, 35 & 36 of the Consumer Protection Act, 2019.

QUORUM:

SH. SANJEEV BATRA, PRESIDENT

SH. MONIKA BHAGAT, MEMBER

 

COUNSEL FOR THE PARTIES:

For complainants            :         Sh. Shiv Sharma, Advocate.

For OPs                          :         Sh. Rajeev Abhi, Advocate.

 

 

 

ORDER

PER SANJEEV BATRA, PRESIDENT

1.                Brief facts of the case are that the complainants were earlier availing health insurance policy namely Family First Silver Floater Policy from Max Bupa Health Insurance Company Limited and the first policy No.30317492201400 was having validity from 31.03.2014 to 30.03.2015 for a sum assured of Rs.25,00,000/- and name of policy holder was mentioned as Deepak Sobti and insured Parveen Sobti and Ashok Kumar Sobti who are mother and father of holder Deepak Sobti. The complainants continued purchasing the insurance policies for the period 31.03.2015 to 30.03.2016, 31.03.2016 to 30.03.2017 and lastly from 31.03.2019 to 30.03.2020.

                   The complainant stated that in the year 2020, agents of the OPs approached and allured them for porting their policy from Max Bupa Health Insurance Company Limited to Star health and Allied Insurance Company Ltd. with assurance for easy claim settlement process and continuity benefits as per existing policy. The OPs further assured for waiver of waiting period as per Email dated 19.03.2020 of OP3 Sumit Sharma. Further Mr. Anwar was told that complainant No.1 was suffering from health conditions like hypertension, diabetes and also taking medicines for thyroid and also Ursoford SR 450 for liver from the last 3 years and also disclosed regarding settlement of one mediclaim of Rs.41,150/- on 27.02.2020. On the assurance and Email correspondence with Mr. Anwar to mention these facts in the policy documents, the complainants obtained Family8 Health Optima Insurance Plan No.IRDAI/HLT/SHAI/P-H/V.III/129/2017-18 vide policy No. P/700016/01/ 2020/028795 for sum assured of Rs.25,00,000/- w.e.f. 30.04.2020 to 29.04.2021. The complainant further stated that, complainant No.1 suffered with a complaint of gall bladder stone for which he was admitted in R.G. Stone Hospital, Ludhiana and remained admitted from27.07.2020 to 29.07.2020 and was diagnosed for Cholelithiasis (ICD 10 Code: K80), Diabetes Mellitus, Hypertension, Hypothyroidism and CLD. An amount of Rs.15,551/- was incurred on his treatment for which the complainants lodged cashless benefit claim with the OPs but name of complainant was not showed on their portal. Upon raising a grievance and request vide Email dated 28.07.2020 to the OPs which was replied vide Email dated 29.07.2020 vide which it was communicated that the insured person covered under the policy stands deleted from coverage w.e.f. 27.05.2020 due to non-disclosure for existing disease but policy continues for other insured person. Son of the complainants made reference for earlier Email correspondences with the OPs and further vide Email dated 28.07.2020 requested the OPs to look into the matter and allow the claim but no reply was received. According to the complainants, no intimation regarding deletion of name of complainants No.1 was intimated by the OPs. Vide Email dated 30.07.2020, son of the complainants requested the OPs to add the name of complainant No.1 but vide Email dated 30.07.2020, the OPs refused to grant the cover and cancelled the coverage of complainant No.1 on the ground that the policy stands cancelled w.e.f. 27.05.2020 due to non-disclosure of material facts. Again Emails dated 04.08.2020, 06.08.2020, 08.08.2020 and 14.08.2020 was sent by the son of the complainants to the OPs but with no result. However, on 14.08.2020, the OPs sent one Email to the son of the complainants making demand of Ultrasound, which was sent vide Email dated 15.08.2020. However, vide Email dated 30.08.2020, the OPs denied the claim of the complainants which amounts to deficiency in service on the part of the OPs.

                   The complainants further stated that complainant No.1 also suffered from Covid-19/Corona virus and took treatment for Covid-19 and remained admitted in Fortis Hospital w.e.f. 30.07.2020 to 09.08.2020 where he was diagnosed for Acute respiratory failure, Bilateral pne, pmotos, Covid-19 positive, Cholelithiasis, DM-II, Hypertension, Chief complaints abdominal pain on and off since 4-5 days, Breathlessness for 3 days and insured a sum of Rs.2,75,083/- on his treatment. Further, complainant No.1 took treatment from D.M.C. & Hospital, Ludhiana from 19.09.2020 to 01.10.2020 where his gall bladder was removed and a sum of Rs.2,84,837.24 were incurred on his treatment. As such, in all Rs.5,75,471.24 were incurred on treatment of complainant No.1 which the OPs are liable to reimburse to the complainants. The act and conduct of the OPs in removing name of complainant No.1 from array of insured persons amounts to deficiency in service and unfair trade practice  due to which the complainants suffered mental pain, tension, humiliation etc. for which they are entitled for compensation. In the end, the complainants prayed for issuing directions to the OPs to pay a total sum of Rs.16,30,471.24 including hospitalization charges, compensation and litigation expenses.

2.                Upon notice, the OPs appeared and filed written statement by taking preliminary objections assailed the complaint on the ground of maintainability; mis-joinder of necessary parties; the complainant estopped by his act and conduct etc. The OPs stated that  immediately on the receipt of the claim, it was duly registered, entertained and processed. Complainants had obtained Family Health Optima Insurance policy No.P/700016/01/2020/028795 valid from 31.03.2020 to 30.03.2021 (under portability) covering Mr. Ashok Kumar Sobti self (Diabetic and Hypertension and their complications) and Mrs. Parveen Sobti spouse (all complications directly and indirectly related to the surgeries and procedures performed previously Hysterectomy) for a sum insured of Rs.25,00,000/-.  Further the insurance policy was issued on the principles uberrimae fides. Utmost good faith was a cardinal principle of insurance. The OPs further stated that the claims arising therein are subject to terms and conditions forming part of the policy. The complainants have accepted the policy agreeing and being fully aware of such terms and conditions and executed the proposal form. Even the terms and conditions of the policy were explained to the complainants at the time of proposing policy and the same was served to the complainant along with the policy schedule. Moreover, it is clearly stated in the policy schedule "the insurance under this policy is subject to conditions, clauses, warranties, exclusions etc. attached." It is one of the condition in the policy under the head Disclosure to information norms as under:

"The policy shall be void and all premiums paid hereon shall be forfeited to the company, in the event of mis- representation, mis-description or non-disclosure of any material facts."

Further it was one of the condition No.6 of the policy that "the company shall not be liable to make any payment under the policy in respect of any claim if information furnished at the time of proposal is found to be incorrect or false or such claim is in any manner fraudulent or supported by fraudulent means or devices, mis-representation whether by the insured person or by any other person acting on his behalf."

It was also one of the conditions No.13 of the policy, which is s reproduced as under as under:-

“Condition No.13 – Cancellation

The company may cancel this policy on grounds of misrepresentation, fraud, moral hazard, non-disclosure of material facts as declared in proposal form/at the time of claim, or non-co-operation by the insured person by sending the insured 30 days' notice by registered letter at the insured person's last known address. The insured may at any time cancel this policy and in such event the company shall allow refund after retaining premium at company's short period only (table given below) provided no claim has occurred up to the date of cancellation.

For policies with one year term
PERIOD ON RISK	RATE OF PREMIUM TO BE RETAINED
Up to one-month	1/3rd of annual premium
Up to three months	1½ of annual premium
Up to six months	1/4th of annual premium
Exceeding six months	Full annual premium
For policies with 2 years term
Up to two-month	1/3rd of policy premium
Up to six months	1½ of policy premium
Up to twelve months	3/4th of policy premium
Exceeding twelve months	Full policy premium

 

According to the OPs, complainant No.1 had given all his medical history on mail dated 29.03.2020 that he is having health problem like hypertension. diabetics and also taking medicines for thyroid and also Ursoford SR 450 for liver for the last 3 years. Moreover, as per declaration letter the complainant No.1 had informed that he is taking Tab. Ursoford for liver problem for the last 3 years. After the receipt of declaration the query was raised for exact diagnose of liver problem, last done USG abdomen and liver function test and the complainant No.1 was also called upon to provide OPD consultation with prescription followed, but he had failed to send the aforesaid documents and information which are material for the continuation of the policy due to disclosure of pre-existing diseases. The specialist panel of the opposite party discussed the risk detailed in view of adequate reports and follow up and as such the name of the complainant No.1 was deleted from the policy w.e.f. 27.05.2020 due to non-disclosure of existing diseases. The aforesaid decision of the company regarding the deletion of the name of the complainant No.1 from the insurance policy w.e.f. 27.05.2020 was communicated to the complainant No.1 and it was also communicated that the policy continues for the other insured person Mrs. Parveen Sobti. The complainant No.1 as such was not insured under the policy w.e.f. 27.05.2020 and as such no claim is payable under the policy for any reason, risk or for reimbursement of medical expenses. The name of the insured has been deleted w.e.f. 27.05.2020 and the said cancellation of the policy qua the name of the complainant No.1 Ashok Kumar is legal, valid, enforceable and are in accordance with the terms and conditions of the policy. There is no deficiency in service on the part of the opposite party. The complainant No.1 is also not a consumer as defined under the Consumer Protection Act w.e.f. 27.05.2020 as his policy already stands canceled and his name has been deleted from the name of the insured under the policy w.e.f. 27.05.2020 due to non-disclosure of existing diseases. Complainant No.1 had suffered gallbladder stone and remained hospitalization from 27.07.2020 to 29.07.2020 in R.G. Stone Hospital, Ludhiana. The complainant No.1 had approached them for cashless approval and the same was declined by the OPs on the ground that the name of the complainant No.1 was deleted from the policy w.e.f. 27.05.2020 due to non-disclosure of existing disease and it was further communicated that the policy continues for other insured persons. The complainant No.1 has also lodged the claim for his medical reimbursement for his treatment in Fortis Hospital, Ludhiana for a sum of Rs.2,75,083/- and in DMC Hospital for Rs.2,84,837/-. The said claim was also rejected by the answering respondents. According to the OPs, all the three claims have rightly been rejected as no claim and the name of the complainant No.1 has rightly been deleted from the policy and the grounds of repudiation and cancellation of policy qua insured are legal, valid and enforceable and are in accordance with the terms and conditions of the policy.

                   On merits, the OPs reiterated the crux of averments made in the preliminary objections as well as factual submission. The OPs have denied that there is any deficiency of service and have also prayed for dismissal of the complaint.

3.                In support of their claim, complainant No.1 Ashok Kumar Sobti tendered his affidavit Ex. CA in which he reiterated the allegations and the claim of compensation as stated in the complaint. The complainant also tendered documents Ex. C1 to Ex. C4 are the copies of insurance policies from 31.03.2014 to 30.03.2020, Ex. C5  to Ex. C7,, Ex. C10, Ex. C13 to Ex. C26 are the Email correspondence, Ex. C8 is the copy of advance premium receipt, Ex. C9 is the copy of portability form, Ex. C11 is the copy of discharge summary of RG Stone and Super Specialty Hospital, Ex. C12 is the copy of receipt of Rs.15,551/- of R.G. Stone and Super Specialty Hospital, Ex. C27 is the copy of policy terms and conditions of the OPs, Ex. C28 is the copy of discharge summary of Fortis Hospital, Ex. C29 is the copy of inpatient summary bill of Fortis Hospital, Ex. C30 is the copy of discharge summary of DMC Hospital, Ex. C31 is the copy of in-patient final bill of DMC Hospital and closed the evidence.

4.                On the other hand, the counsel for the OPs tendered affidavit Ex. RD of Sh. Sumit K. Sharma, Senior Manager of the OPs along with documents Ex. R1 is the copy of policy terms and conditions, Ex. R2 is the copy of policy schedule, Ex. R3 is the copy of proposal form, Ex. R4 is the copy of portability form, Ex. R5 is the copy of letter dated 17.04.2020, Ex. R6 is the copy of Endorsement schedule dated 19.05.2020 and closed the evidence.          

5.                We have heard the arguments of the counsel for the parties and also gone through the complaint, affidavit and annexed documents and written statements along with affidavit and documents produced on record by both the parties.        

6.                The complainants are husband and wife and their son namely Deepak Sobti had been availing and renewing the health insurance policies known as Family First Silver Floater Policy from Max Bupa Health Insurance Company Ltd. since 31.03.2014 till 30.03.2020 vide policy documents Ex. C1 to Ex. C4. However, in March 2020 on the assurances of the agents of the OPs, the health policy was ported with the OPs vide portability form Ex. C9 = Ex. R4 and the complainants deposited an advance premium of Rs.56,068/- vide advance premium receipt Ex. C8= Ex. R7. Thereafter, the OPs issued insurance policy namely Family Health Optima Insurance Plan having a sum assured of Rs.25,00,000/- and validity from 30.04.2020 to 29.04.2021 Ex. C10. During the aforesaid period, the complainant Ashok Kumar Sobti was hospitalized thrice, details of which are tabulated as under:-

Sr. No.	Period	Hospital name	Diagnosis	Incurred Medical Expenses
1.	27.07.2020 to 29.07.2020	R.G. Stone Hospital, Ludhiana.	Cholelithiasis (ICD 10 Code: K80), Diabetes Mellitus, Hypertension, Hypothyroidism and CLD (discharge summary Ex. C11)	Rs.15,551/- (bill Ex. C12)
2.	30.07.2020 to 09.08.2020	Fortis Hospital, Chandigarh Road, Ludhiana	Acute Respiratory failure, Bilateral pneumonitis, Covid 19 positive, Cholelithiasis, Diabetes Mellitus, Hypertension	Rs.2,75,083/- (bill Ex. C29)
3.	19.09.2020 to 01.10.2020	Dayanand Medical College & Hospital, Ludhiana.	Developmated cirrhosis (NASH), HTN, DM-Type-2, complicated udlery cyst, recent COVID+ (discharge summary Ex. C30)	Rs.2,84,837.24 (bill Ex. C32)

 

7.                During the aforesaid period, on 17.04.2020, the OPs issued a letter Ex. R5 proposing the cancellation of coverage due to non-disclosure of pre-existing disease by complainant No.1 Ashok Kumar Sobti, operative part of which is reproduced as under:-

“We wish to bring your kind attention that during the scrutiny of the above medical record, we observe that you have NOT declared the details; Diseases of the liver and its complications (relating to Ashok Kumar Sobti) which were found to be pre-existing at the time of taking the policy for the first time during 31-Mar-21. This amounts to non disclosure of material facts.

 We draw your attention to Condition No.15 of the policy clause which reads as follows:-

The Company may cancel this policy on grounds of misrepresentation, fraud, moral hazard, non disclosure of material facts as declared in the proposal form and/or claim form at the time of claim and non co-operation of the insured by sending the insured 30 days notice by registered letter at the insured person’s last known address.

This letter shall be taken as the notice of cancellation as per the above mentioned policy condition.

You are hereby informed that as per the above clause, we intend to cancel the coverage for above mentioned person with effect from 27-May-20.”

Thereafter, the OPs vide endorsement schedule dated 19.05.2020 Ex. R6, deleted the name of complainant No.1 Ashok Kumar Sobti w.e.f. 27.05.2019. However, the other terms and conditions remained unaltered and according to the OPs the proportionate amount of premium was also refunded.

8.                During the course of first hospitalization i.e. 27.07.2020 to 29.07.2020 at R.G. Stone Hospital, Ludhiana when complainant No.1 sought cashless approval from the OPs, the same was declined on the ground that his name stands deleted w.e.f. 27.05.2020 due to non-disclosure of pre-existing disease and as such, he is not entitled to approval of cashless treatment. On subsequent occasions, the claim of the second hospitalization at Fortis Hospital of  Rs.2,75,083/- and third hospitalization at DMC, Ludhiana for Rs.2,84,837/- was also rejected on the identical grounds.

9.                Now the point of consideration arises as to whether  the cancellation of coverage to complainant No.1 Ashok Kumar Sobti w.e.f. 27.05.2020 and subsequent denial of cashless approvals/reimbursements were justified or not?

10.              The counsel for the OPs has referred to the following clauses of the policy schedule Ex. R1:-

“Insured’s Obligations: Disclosure of Material Information during the policy period such as change in occupation.

Disclosure to information norm:- The Policy shall be void and all premiums paid hereon shall be forfeited to the Company, in the event of misrepresentation, mis-description or non-disclosure of any material fact.

6.       The Company shall not be liable to make any payment under the policy in respect of any claim if information furnished at the time of proposal is found to be incorrect or false or such claim is in any manner fraudulent or supported by any fraudulent means or device, misrepresentation whether by the Insured Person or by any other person acting on his behalf.

12.     Cancellation: The Company may cancel this policy on grounds of misrepresentation, fraud, moral hazard, non disclosure of material facts as declared in the proposal form and/or claim form at the time of claim and non co-operation of the insured by sending the insured 30 days notice by registered letter at the insured person’s last known address. No refund of premium will be made except where the cancellation is on the grounds of non co-operation of the insured, in which case the refund of premium will be on pro-rate basis. The insured may at any time cancel this policy and in such event the Company shall allow refund after retaining premium at Company’s short Period rate only provided no claim has occurred up to the date of cancellation.

The counsel for the OPs has further contended that the cancellation of coverage for non-disclosure of pre-existing disease was rightly made and stipulates prior notice of cancellation was duly served upon the complainant.

11.              On the other hand, the counsel for the complainant has referred to the Emails dated 19.03.2020 Ex. C5, Email dated 29.07.2019 Ex. C6 and Ex. C7 and contended that the details of pre-existing diseases and medicines were conveyed to the OPs at the time of portability of the insurance policy and there is no concealment or misrepresentation of facts on his part and deletion of name of complainant NO.1 is illegal. Emails Ex. C5, Ex. C6 and Ex. C7 reads as under:-

“Ex. C5. As discussed with (Anwar = 7065852183/7042485558) regarding your family policy portability from Max Bupa to Star Health and we are going to port your policy with same continuity benefits as per your existing policy means you don’t have to wait for any waiting period as per your existing policy.

If you port your policy in Star Health Insurance Company and submit your previous documents, your all continuity benefit will be applicable from 1^st day of policy.

Ex. C6: As discussed with Anwar I would like to tell you that my father Mr. Ashok Kumar Sobti is having health conditions like hypertension, diabetes and also taking medicines for thyroid and also Ursoford SR 450 for liver from last 3 years.

Also I have recently filed one claim from Max Bupa for my mother Parveen Sobti which was settled on 27^th of February 2020 for Rs.41150/-. The claim was for the treatment of post menopausal bleeding endometrial.

I have been told by Anwar that all these things would be mentioned in my policy documents. So I am going to make the payment and port my policy from Max Bupa to Star Health.

Ex. C7: Below medical history will be mentioned in your policy copy for your mother, father and that will be covered from day one in Star because you are porting more than 4 years old policy Max Bupa to Star.”

 

12.              We have gave thoughtful consideration to the rival contentions of the counsel for the parties and have also gone through the record.

13.              It is evident that complainant No.1along with his wife complainant No.2 Parveen Sobti and son Deepak Sobti had a smooth run with their previous insurance company for continuous coverage of four years and on one occasion, the said company had reimbursed the medical expenses incurred by them. It is the officials of the OPs like Mr. Anwar and OP3 Sumit Sharma  who promised and allured the complainants on behalf of OP company by offering 100% cashless claim without prior approval and waiver of waiting period etc. Perusal of Email Ex. C6 clearly shows that son of the complainant Deepak Sobit had discussion with Mr. Anwar and disclosed that his father i.e. complainant No.1 is having health conditions like hypertension, Diabetes mellitus and also taking medicine for thyroid and also Ursoford SR 450 for liver from last 3 years. This Email also refers to the assurance given by the officials of the OPs that these diseases could be mentioned in the policy documents to be issued after porting of insurance policy. But when the policy was issued, details of plan as mentioned in Ex. R2 referred to pre-existing disease of complainant No.1 hypertension, diabetes mellitus and their complications and specific description of disease of thyroid and liver was omitted. It appears that despite having a conscious knowledge of pre-existing disease with regard to thyroid and liver, they cleverly did not expressly mentioned the same in Ex. R2. Now the OPs are estopped from claiming that pre-existing disease of thyroid and liver of complainant No.1 were not disclosed at the time of porting the insurance policy with them. So invoking of cancellation clause No.12 in order to delete the name of complainant No.1 Ashok Kumar Sobti from the list of insured persons and discontinuation of coverage w.e.f. 27.05.2020 on the ground of non-disclosure of pre-existing disease is arbitrary, unjustified and it deserves to be set aside. Further rejection of cashless/reimbursement of three hospitalization of complainant No.1 is also hereby set aside and complainant No.1 Ashok Kumar Sobti would be deemed to under continuous coverage w.e.f. 27.05.202020 till 30.03.2021 and benefit of continuity for all intents and purposes stands restored. Further it would be just and appropriate if the complainants are directed to submit the mediclaim of complainant No.1 pertaining to his hospitalization with R.G. Store Hospital Ludhiana w.e.f. 27.07.2020 to 29.07.2020, hospitalization with Fortis Hospital, Chandigarh Road, Ludhiana w.e.f 30.07.2020 to 09.08.2020 and hospitalization  with Dayanand Medical College &Hospital, Ludhiana w.e.f. 19.09.2020 to 01.10.2020 with the OPs within 30 days from the date of receipt of copy of order and thereafter, the OPs shall settle and reimburse all said three mediclaims within 30 days from the date of receipt of claim from the complainants as per terms and conditions of the policy..

14.              As a result of above discussion, the complaint is partly allowed with an order that that the deletion of name of complainant No.1 from the policy and discontinuation of coverage policy to complainant No.1 w.e.f. 27.05.2020 is hereby set aside and benefits of continuity for all intents and purpose is also restored. Further the complainants are directed to submit the mediclaim of complainant No.1 pertaining to his hospitalization with R.G. Store Hospital Ludhiana w.e.f. 27.07.2020 to 29.07.2020, hospitalization with Fortis Hospital, Chandigarh Road, Ludhiana w.e.f 30.07.2020 to 09.08.2020 and hospitalization  with Dayanand Medical College &Hospital, Ludhiana w.e.f. 19.09.2020 to 01.10.2020 with the OPs within 30 days from the date of receipt of copy of order and thereafter, the OPs shall settle and reimburse all said three mediclaims within 30 days from the date of receipt of claim from the complainants as per terms and conditions of the policy. The OPs jointly and severally shall further pay a compensation of  Rs.20,000/- (Rupees Twenty Thousand only) to the complainant within 30 days from the date of receipt of copy of order. The refunded premium amount will be treated as part of additional compensation. Copies of the order be supplied to the parties free of costs as per rules. File be indexed and consigned to record room.        

15.              Due to huge pendency of cases, the complaint could not be decided within statutory period.

 

(Monika Bhagat)                              (Sanjeev Batra)                      Member                                                President   

 

Announced in Open Commission.

Dated:08.02.2024.

Gobind Ram.