A consumer disputes redressal commission in Hyderabad has penalized Aditya Birla Health Insurance for deficiency of service after the firm wrongly rejected a senior citizen’s medical claim and arbitrarily cancelled his policy over alleged non-disclosure of hypertension.
The commission ordered company officials to reimburse the 67-year-old complainant Rs 93,000 for hospital expenses, reinstate his health coverage, and pay Rs 15,000 in compensation and litigation costs.
Commission Rejects Insurer’s Unsubstantiated Claims
In an order issued on July 10, Commission President Vakkanti Narasimha Rao and member P V T R Jawahar Babu ruled in favor of the policyholder, observing that the insurance company failed to produce any documentary evidence to back its decision.
The bench noted that the rejection of the claim without a valid reason constituted a deficiency of service and an unfair trade practice. The commission highlighted that insurance providers cannot invalidate policies or deny claims on groundless allegations of non-disclosure, especially when policies have been maintained for several years with regular premium payments.
Under the directives, the insurer’s branch managers must jointly and severally pay the Rs 93,000 medical claim, along with Rs 10,000 for mental agony and Rs 5,000 toward legal expenses. The commission further instructed the company to restore the policy without any cancellation record and prohibited any future policy termination based on hypertension or pre-existing conditions, given that the mandatory cooling-off period had passed.
Background of the Dispute
The policyholder had purchased a family health insurance plan covering himself and his wife in September 2018, maintaining regular premium payments through 2024.
On December 13, 2023, he was admitted to a hospital for three days following complaints of chest pain and shortness of breath, incurring medical bills totaling Rs 93,000. Despite the policy being active, the insurance company denied reimbursement and subsequently cancelled the contract, alleging that the patient had concealed a pre-existing hypertension condition dating back to 2017.
Represented by advocate Sai Vamshi Vangipuram, the complainant stated that he had disclosed all health details during his initial pre-policy medical examination, including his use of Stamlo 5 mg for a temporary blood pressure issue and hypertension as a potential condition. He also submitted that even if hypertension were treated as a pre-existing ailment, the applicable cooling-off period had already expired prior to his 2023 hospitalization.
The commission pointed out that the insurer failed to submit even a single document to verify its assertions, labeling such unilateral cancellations highly objectionable.
Insurer’s Defense Dismissed
Appearing for the insurance company’s branch managers, advocate G Nagesh argued that the complaint was false, frivolous, and legally unmaintainable. Defense counsel asserted that the complainant had not approached the forum with clean hands and lacked standing to file the case, maintaining that the insurance policy remained a contract strictly governed by its agreed terms and conditions.
The commission rejected the defense arguments, holding the company liable for service deficiency and directing full compliance with the reimbursement and policy reinstatement directives.
