If Company gives insurance without medical examination, then they should be ready to Honour Claim: NCDRC

The National Consumer Disputes Redressal Commission passed an order on 2nd March 2021 in an insurance case.

Background:

In 2008, Smt. Pushpa Devi filled a proposal form duly filled for insurance with the respondent, Tata AIG Life Insurance Company. Thus, a life insurance was issued for Rs.7, 50, 000. Her Son, current petitioner, Sunil Kumar Sharma was made the nominee. In November 2009, Pushpa Devi suffered from pneumonia and was taken to Riyabadi Hospital and subsequently was shifted to Jawahar Lal Nehru Hospital, Ajmer where she died.

An insurance claim was filed in January 2010 after giving intimation of death. The Insurance Company repudiated the claim stating concealment of facts; that the insured was suffering from diabetes mellitus and high blood pressure at the time of filing the proposal form. In May 2010, the petitioner asked the company to reconsider the claim, which the company again denied.

Thus, in November 2010, a complaint was lodged before the District Consumer Forum, Ajmer. It was prayed to award the Insurance Claim of Rs.7, 50, 000, Rs.50, 000 for physical, economical and mental loss, Rs.5, 000 towards travelling and litigation costs. An additional interest of 18% p.a. on the above amount was also sought.

District forum:

The insurance company addressed the complaint by giving a written statement saying that the part had hidden the facts of the insured’s health at the time of filing the form. This was evident through the bed head ticket of JawaharLal Nehru Hospital. She was suffering from diabetes for the past 20 years and hypertension.

The district forum allowed the complaint and directed the company to pay Rs.7, 50, 000 with interest @ 9% from the date of filing of the claim and Rs.2, 000 as cost of litigation. Aggrieved, the insurance company appealed in the State forum in 2011. The State Commission, in 2013, allowed the Appeal and set aside the order of the District Forum.

Thus, the current revision petition was made in 2013 by the petitioner.

Proceedings:

Counsel for the Petitioner:

It was stated that the insured was not suffering from diabetes before filing the proposal form. The bed head ticket was not proved by any authority of the hospital. A photocopy was filed by the Company without any affidavit and thus the same cannot be accepted. It is on the Company to prove if any information had been concealed, and they had failed in doing so.

The State Commission had wrongly relied upon the bed head ticket. It was not clear as to who had recorded this observation and on whose instruction. The State Commission presumed that this information may have been given by the patient or her relative, but the fact was that Pushpa Devi did not suffer from diabetes before filling the proposal form. Simply on the basis of some entry on the bed head ticket, a genuine Insurance Claim cannot be rejected. The bed head ticket had not been proved before the District or the State Commission.

Counsel for the Insurance Company:

It was stated that the bed head ticket is an authentic document of the treatment record of the hospital. It was clearly written under the column of ‘past-history’ that “for 20 years, the patient is on insulin”. The doctor recording this observation had no enmity with the patient and would not have recorded such an observation on his own. The information must have been provided by the patient or by some relative. The information, therefore, couldn’t be treated as unreliable.

Further, in the Doctor’s certificate, the cause of death had been reported as “septicemia”. In the column of other diseases, diabetes mellitus was also recorded. It was wrong to say that the patient died of pneumonia, as Septicemia has a direct relationship with diabetes. Diabetes increases the risk of septicemia. From the cause of death also, the possibility of a patient suffering from diabetes for a long time is confirmed.

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Thus, it was clearly proved that information was concealed while filing the proposal form. The patient was also suffering from hypertension as recorded in the “Past history”. Thus, the repudiation of the Insurance claim by the Company was totally justified.

Decision of the Commission:

Presiding Member, C. Viswanath, carefully examined the material on record and considered the arguments of the learned counsels. It was seen that the bed-head ticket was not a certified copy issued by the hospital and also was not proved by any hospital authority. The Complainant had mentioned in the Complaint itself that his mother was not suffering from diabetes prior to filing the proposal form.

The ticket is a hospital record and a copy was not provided to the patient/family, due to which they may be unaware about it’s the exact contents. When the patient dies, a discharge cum death summary is given to the family members of the patient. As the ticket was not provided to the Complainant, there was no occasion for the Complainant to know the contents of this ticket and to get it rectified, in case of wrong. The Company had not filed a discharge summary to prove that the patient was suffering from diabetes. Even in the doctor’s certificate was there no mention of diabetes.

It was also noted that the Company had given Insurance to a 66-year-old without any preliminary medical examination. If the company is ready to take the risk at this age of the proposer, without any preliminary medical examination, then the company should be ready to honour the claim also because the chances of death of such persons are more during the currency of the Policy.

Thus, the state commission’s order was set aside and the District Forum’s order was modified. The insurance company was directed to pay Rs.7.5 lakhs to the Complainant within 60 days of the order. 

Case Details: Revision Petition 3557 of 2013

Story by Sai Kulkarni-Intern

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