Insurer fined ₹40k for rejecting Chandigarh woman’s claim

Despite paying premium, the complainant’s claim of ₹2.61 lakh was repudiated by the insurer via a letter dated February 19, 2020, while cancelling her policy on grounds of suppressing the material fact of pre-existing medical treatment

The District Consumer Disputes Redressal Commission has directed Max Bupa Health Insurance to refund ₹61,514 to a Manimajra resident and further pay ₹40,000 as compensation for rejecting her medical claim from 2019.

Max Bupa Health Insurance was also directed to refund ₹61,514 to the Manimajra resident. (iStock)

The complainant Bhupinder Kaur of Manimajra had availed of a medical health policy, commencing from February 25, 2017, which she later renewed and its validity was extended up to February 24, 2020. In October 2019, she was admitted to Fortis Hospital, Mohali, for a day owing to medical investigation. There, it was discovered that she was under risk of developing cancer.

Despite paying the premium, her claim of ₹2.61 lakh was repudiated by the insurer via a letter dated February 19, 2020, while cancelling her policy on grounds of suppressing the material fact of pre-existing medical treatment. To seek redressal, Kaur filed a complaint before ombudsman, who passed an order in her favour and while also reinstating the policy, holding that the cost of her treatment was to be paid by the insurer.

However, the company did not pay towards her treatment in 2020 despite sending multiple letters and reminders. Alleging deficiency in service and unfair trade practice on their part, a complaint was filed with consumer court.

The insurer in its reply stated that in compliance of the insurance ombudsman, the opposite party had already paid ₹69,895 in addition to ₹3,940 and had reinstated the policy. The company added that the complainant had further filed a claim for reimbursement of expenses after reinstatement, during hospitalisation from February 11 to February 15, 2020. The same was denied on the grounds of non-submission of mandatory documents.

The insurer had issued a missing information letter to the complainant. Despite the letter and reminders to the complainant for submission of mandatory documents for processing of claim, no response came from the complainant, claimed the insurer. The claim, said the insurer, was closed as denied upon non-submission of mandatory documents, adding that all other allegations made in the complaint were wrong.

The commission observed that the main grievance of the complainant was that despite having proper medical insurance cover, her legitimate claim was not paid. The insurance company, however, failed to prove on record that the complainant did not supply the requisite documents for settlement of the claim.

“If the opposite party (OP) was interested in settling the claim then they could have used all the relevant required information annexed with the complaint but till date they did not do so. Thus, non-payment of legitimate claim of the complainant by the OP is deficiency in service and the OP indulged in unfair trade practice,” the commission further observed while allowing the complaint and directing the firm to pay ₹61,514, with interest, from the date of repudiation, August 25, 2022.