Gurgaon: Insurer’s rejection or restriction of the claim on grounds of pre-existing diseases amounts to deficiency in service, district consumer disputes redressal commission (DCDRC) has held. In an order passed recently, DCDRC directed Care Health Insurance to reimburse over Rs 19 lakh in medical expenses incurred by a woman for her husband’s treatment before his death.Rejecting the insurer’s defence, the commission observed that an insurer was expected to conduct a thorough medical examination before issuing a policy and could not later deny or restrict a claim on grounds of non-disclosure of pre-existing diseases in the circumstances of the case. The panel also found from the hospital records that the ailments for which Piyush Jain was treated were unrelated to the kidney disease and diabetes cited by the insurer.The order comes against the backdrop of Care Health Insurance, which had earlier contended that the insured — Piyush — had a history of chronic kidney disease and diabetes and that the complications leading to his death were linked to diabetes. The complaint was filed by Jyoti, wife of Piyush, who was admitted to Sir Ganga Ram Hospital in Delhi on Dec 10, 2023, following investigations into recurring headaches and joint pain. He was treated for ANCA vasculitis and other complications, developed septic shock and suffered a brain haemorrhage requiring surgery. He died on Jan 4, 2024.The insurance policy carried a basic sum insured of Rs 25 lakh, a no-claim bonus of Rs 5 lakh and an inflation shield of Rs 2.9 lakh, taking the total cover to Rs 32.9 lakh. The insurer initially approved parts of the cashless claim but later restricted the enhancement, citing exhaustion of the sum insured. It subsequently rejected the reimbursement claim of Rs 19,69,788.Besides Rs 19.6 lakh, the commission — headed by president Sanjeev Jindal and comprising members Jyoti Siwach and Khushwinder Kaur — on Oct 13 also awarded Rs 2 lakh as compensation for mental harassment and Rs 55,000 towards litigation expenses. The reimbursement carries 9% annual interest from Dec 29, 2023, until realisation.Care Health Insurance has been directed to pay the awarded amounts within 45 days of the order’s uploading, subject to the timeline specified in the order. Failure to comply will attract interest at 12% per annum for the same period until payment. The commission also noted that execution proceedings and action under the Consumer Protection Act, 2019, could follow non-compliance.Represented by advocate Aarti S Jain, the complainant challenged the rejection as illegal. Care Health Insurance, represented by advocate Megha Gupta, maintained that its decision was in accordance with the policy’s terms and conditions. The commission relied on judicial precedents, including a Punjab and Haryana High Court ruling concerning unfair exclusion clauses in insurance contracts, and held that the insurer’s action was arbitrary and amounted to deficiency in service.
