Setting aside an order passed by the state commission, the national consumer disputes redressal commission (NCDRC) directed Bajaj Allianz General Insurance Company Ltd to pay Rs7.60 lakh with 9% interest and Rs25,000 as compensation to a senior citizen for treatment during his visit to the US.
In an
order last month, the NCDRC bench of Subhash Chandra (presiding member) and air vice-marshal (AVM) J Rajendra (retd) (member) says, "An ordinary person would consult a doctor or approach a hospital only after observing symptoms for a few days and if he/ she experiences discomfort. It cannot be expected that an average person would diagnose himself/ herself based on observed symptoms and disclose an illness as part of the extension of an existing policy of health coverage."
"Even otherwise, 'prostatic hypertrophy' is an age-related prostate gland enlargement which can cause difficulty in urination. This ailment had not been detected by the examining doctor at the stage of the policy proposal on 21 June 2014. 'Non-disclosure' of the same on 23 September 2014 by the petitioner (complainant) when he had not consulted a doctor for the same cannot be considered to be willful suppression of material facts. Therefore, the contention of the insurance company that the principle of utmost good faith has been violated in the instant case cannot be sustained. Order of the state commission is set aside, and the order of the district forum in CC no. 196 of 2015 is affirmed," it added.
Kashmir Singh Gill from Panchkula district in Haryana had regularly taken travel insurance policies for his trips to the US.
On 21 June 2014, he obtained a 'travel super age elite' policy from Bajaj Allianz General Insurance, valid from 24 June 2014 to 21 September 2014 for a sum assured of US$50,000 after paying a premium of Rs13,693.
Prior to the issue of the policy, Mr Gill underwent a medical examination by Bajaj Allianz General Insurance's recommended doctors on 6 June 2014, which did not reveal any ailment, although he himself disclosed that he had hypertension and asthma.
During his stay in the US, Mr Gill requested an extension of his policy for 30 more days, which was granted, extending the coverage until 27 October 2014. On 25 September 2014, he experienced blood in his urine and was diagnosed with haematuria, but no serious treatment was required. The hospital sent a medical bill of US$11,516 directly to the insurance company for clearance.
Despite the existence of a valid travel medical policy, Bajaj Allianz General Insurance rejected the claim on 27 February 2015, stating that haematuria was linked to a pre-existing condition, prostatic hypertrophy, which was not covered under the policy.
Disputing the claim denial and explaining that haematuria is not a chronic condition and can occur due to various factors, Mr Gill sent a legal notice to the insurer on 11 May 2015. When he did not receive any response from Bajaj Allianz General Insurance, he filed a complaint before the Panchkula district consumer forum claiming Rs7.60 lakh, interest, and compensation.
Allowing the complaint on the contest on 3 March 2016, the district forum directed Bajaj Allianz General Insurance to pay Mr Gill Rs7.60 lakh with an interest of 9%pa (per annum) and Rs25,000 compensation.
Aggrieved by this decision, Bajaj Allianz General Insurance filed a first appeal before the Haryana state consumer dispute redressal commission. While allowing the appeal, the state commission dismissed the complaint filed by Mr Gill holding that he was suffering from a pre-existing medical condition and, therefore, not entitled to the claim under the policy.
Mr Gill then approached the NCDRC with a revision petition. His counsel argued that Mr Gill was required to visit a hospital for blood in urine and was diagnosed with haematuria. "However, no treatment or hospitalisation was needed. A medical bill of US$11,516 (about Rs7.60 lakh) was sent directly to the insurer for payment under the policy which was repudiated despite the submission of all required documents on the grounds of pre-existing medical conditions. Mr Gill's legal notice on 11 May 2015, clarifying that haematuria was not a chronic condition but a one-time ailment, was not considered forcing him to approach the district forum."
The counsel for Bajaj Allianz General Insurance argued that its liability was limited to US$10,000 per illness, subject to the policy terms and conditions. "Mr Gill had prostatic hypertrophy as an existing medical condition which was excluded in the policy. After receiving the medical documents from Bridgeport Hospital, it was revealed that Mr Gill had experienced similar symptoms a year prior but did not follow up on treatment. After reviewing the claim, the insurer repudiated it on 27 February 2015, citing 'non-disclosure of material information' regarding Mr Gill's past medical history of prostatic hypertrophy, which justifies the denial of the claim due to the concealment of the pre-existing condition."
After hearing both sides and perusing documents available on record, NCDRC observed that it is apparent that while the proposal form mentioned the response in the negative in the respect of 'pre-existing disease, illness or treatment', there was a clear declaration of asthma and hypertension. The incident involving treatment of haematuria and claim for reimbursement while in the US has been disallowed by the insurer on the ground that it amounted to a pre-existing disease which was not disclosed and therefore violated the principle of uberrima fides or utmost good faith.
Further, the bench noted that while it is a fact that the incident of haematuria or blood in urine occurred while Mr Gill was in the US on an extended policy, other than the disclosure from the treatment papers that he had undergone a similar experience one year, no records to establish either treatment or hospitalisation had been brought on record (by the insurer).
In the facts and circumstances of the instant case, NCDRC says the principle of ubberima fidei cannot be applied mechanically since the pre-existence of haematuria had not been established through any medical examination or proved by Bajaj Allianz General Insurance to be a pre-existing disease on the basis of medical treatment records that was wilfully not disclosed by the petitioner at the time of obtaining of the policy in question.
The bench allowed the revision petition filed by Mr Gill. While setting aside the order of the state commission, the bench directed Bajaj Allianz General Insurance to pay Mr Gill Rs7.60 lakh with 9%pa interest and Rs25,000 compensation.
(Revision Petition No277 of 2017 Date: 30 September 2024)
