Important for Health Insurers and Insured
Judgement dated 4.7.2023 of the Supreme Court of India - Important for Health Insurers and Insured - Claim for treatment of ovary cancer repudiated & Refusal to renew policy for non-disclosure of wife’s rheumatic heart disease in the proposal – IRDAI Guidelines dated 31.3.2009
First Round of litigation
The appellant had taken family policy for 2007 to 2008 and renewed upto 6.7.2009. Two claims for treatment of wife for ovarian cancer were repudiated by the Insurer on the ground of non-disclosure of rheumatic heart disease of wife in the proposal form. The Insurer also refused to renew the policy. The appellant – insured filed the consumer complaint.
By the order dated 11.9.2009 the District Forum allowed the complaint, directed reimbursement and also renewal of policy. This was confirmed in appeal by the State Commission.
In the revision of the Company, by an interim order dated 13.5.2011, the National Commission directed that the renewal of insurance policy shall be subject to its final decision.
Finally, by the order dated 26.11.2018, Revision No. 923 of 2011 of the Insurer was dismissed but the direction for renewal of policy was set-aside.
Second round of litigation
Coming to the renewal of policy as per order of District Forum and continued by the interim order of National Commission, the policy was renewed in October, 2011. The Insurer did not pay bills for renewal period. The District Forum allowed the second complaint vide order dated 1.8.2013. This was confirmed in appeal by the State Commission.
Revision No.1417 of 2014 of the Insurer was allowed by the National Commission vide common order dated 26.11.2018 on the ground that the claim was not admissible since renewal beyond 6.7.2009 was not proper.
The appellant had filed Civil Appeals, whereas, the Insurance Company did not file appeal against the order of reimbursement upto 6.7.2009 granted by the National Commission.
HELD that refusal to reimburse the expenses for the earlier policy period is illegal since the rheumatic heart disease has no relation with ovarian cancer. The amount treatment upto 6.7.2009 was paid by the Insurer and the order of National Commission was not challenged. Even the Insurance Company accepted the fact that non-mentioning of disease earlier in the proposal was not material and both had no relation with each other. The premium for renewed policies was not refunded after the order dated 26.11.2018. Now the Company cannot be permitted to deny renewal of policy from 7.7.2009 onwards. The Civil Appeals were allowed, the order of National Commission was set-aside and the orders of District and State Forum were restored.
Om Prakash Ahuja Vs. Reliance General Insurance Co. Ltd C.A.Nos.2769-2770 of 2023
#supremecourt #insurance #health #repudiation #renewal #legaldeli
