Court orders insurance company to pay ₹66.5L to cancer patient

The Mumbai Consumer Commission ordered an insurer to pay ₹66.50 lakh to a resident for wrongfully rejecting a cancer treatment claim.

MUMBAI: The Mumbai Suburban District Consumer Disputes Redressal Commission has ordered an insurance company to pay ₹66.50 lakh to a city resident after ruling that the company wrongfully rejected his overseas cancer treatment claim. The commission held that the insurer was guilty of adopting unfair trade practices and ordered the money to be paid within two months along with compensation and litigation costs.

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The judgment was passed by the commission president Samindara R Surve and a member Sameer S Kamble in late October. The complainant, Alok Rajendra Bector, had bought a worldwide medical insurance policy in 2017 for himself and his son, which offered him a ₹65 lakh insurance claim. He was diagnosed with cancer on August 1, 2018, and after being initially treated in the city, he travelled to the US for specialised medical care. He informed the insurer in advance about the diagnosis and the overseas treatment, as required under the policy.

His first claim was rejected on the grounds that he had failed to disclose his pre-existing history of asthma. Following this, the insurer cancelled the policy in December 2019, but Bector challenged the decision before the Insurance Ombudsman, a body set up by the government to protect the interests of policyholders. The Omsbudman held that asthma had no connection with colorectal cancer which affects the colon or rectum, and directed the insurer to reimburse a part of the earlier claim. This established that the insurance company’s earlier cancellation was unjustified, and the complainant was eventually reimbursed.

Bector then approached the consumer commission through advocate Rohit Lalwani after the insurer rejected his next claim for the ₹88,34,560 that he spent on his treatment at the Memorial Sloan Kettering Cancer Research Centre between March 2019 and March 2020.

The insurer rejected his claim, arguing that the policy allowed overseas treatment for specified illnesses only through the cashless means, where the policyholder can receive treatment without making upfront payments, as the insurance company directly settles the bill. The company claimed that the complainants policy did not allow reimbursements in the case of overseas treatments, prompting Bector to file the consumer complaint.

The commission rejected this defence, noting that since the insurer had itself cancelled the policy, the complainant could not have sought the authorisation of a cashless treatment. The commission also found no evidence that Bector’s asthma was relevant to his cancer, and how it would have influenced his medical coverage.

The commission concluded that Bector had been wrongfully deprived of policy benefits at a critical time when he required life-saving medical care, causing him financial strain and mental distress during his cancer treatment.

The insurer has been directed to pay ₹66.50 lakh within 60 days, failing which the amount will gather a 6% annual interest until payment. The insurer must also pay Bector ₹30,000 as compensation and ₹10,000 as litigation costs.