Skip to main content

Insurer Must Justify Claim Rejection Medically

Can cirrhosis of the liver be attributed only to drinking? Or cancer in a smoker be attributed solely to smoking? There might be several factors which could cause a particular ailment, and it is not possible to pin-point why the ailment occurred. Yet, insurance companies usually attribute a reason for an ailment which would make it convenient for them to reject the claim.
The Maharashtra State Commission has recently held that jumping to such a presumption is incorrect. Suresh Chunilal Jani and his wife Purnima were insured for Rs 2.75 lakh each, under a medi-claim policy issued by National Insurance Company. During the subsistence of the policy, Suresh was admitted to Hinduja hospital for cirrhosis of the liver.
The hospitalization cost for 10 days came to Rs 92,912, while the medical expanses amounted to Rs 27,022, totaling to Rs 1,19,934.He lodged a claim for reimbursements of these expenses, but his claim was rejected on the ground that the treatment was for ‘alcoholic liver disease as congenital external disease’. Not payable under the terms of the policy.
Suresh challenged the repudiation by filing a consumer complaint before the South Mumbai district Forum. The forum held that the repudiation was in order and dismissed the complaint.
Then, Suresh appealed to the Maharashtra State Commission. The Commission observed the insurance company’s stand (repudiation on the ground of alcoholic liver disease) was not covered under clause 4.8 of the policy.
During the hearing, the Commission pointedly questioned the insurance company whether cirrhosis of liver could be caused due to reasons other than consumption of alcohol. But insurance company could not produce any material to justify the ground on which the claim had been repudiated.
The Commission noted that clause 4.8 dealt with convalescence, general debility, run-down condition, rest cure; congenital external disease or defects or anomalies; sterility, infertility, sub-fertility or assisted conception procedures; venereal disease; intentional  self-injury, suicide; all psychiatric and psychosomatic disorders; and diseases and accidents due to misuse or abuse of drugs or alcohol or other intoxicating substances.
The Commission noted that insurance company was not able to produce any material to show liver cirrhosis was due to alcohol alone or it was a congenital external disease. Hence, the provisions of clause 4.8 were held to be inapplicable.
The Commission held that the conclusion of the district forum upholding the repudiation was incorrect. Holding that the repudiation of the claim was unjustified, the Commission set aside the district forum’s order and directed the insurance company to settle the claim.
Accordingly, the insurance company was ordered to pay the entire claim of Rs 1, 19,934 within two months along with 9% interest from March 19, 2008, when it was repudiated, till payment.
This judgment will benefit consumers, as insurance companies will not be permitted to assume a reason for an ailment according to its own convenience, whims and fancies. If a reason is attributed, the onus would lie on the insurance company to medically prove the correctness of its contention.

Article referred: http://www.policymantra.com/blog/page/4/

Comments

Most viewed this month

Partition proceedings are vitiated even if single co-sharer is not made party or is not served in accordance with law

Cause Title :  Bhagwant Singh vs  Financial Commissioner (Appeals) Punjab, Chandigarh,  CWP-2132-2018 (O&M), High Court Of Punjab & Haryana At Chandigarh Date of Judgment/Order : 31.08.2022 Corum : Hon’ble Mr. Justice Sudhir Mittal Background A large parcel of land was owned by the Nagar Panchayat. Thereafter, some of the co-sharers sold their shares to third parties including the petitioners herein. On 22.11.1995, respondents No.3 to 5 filed an application for partition of the land. The petitioners were not impleaded as parties.  On completion of proceedings, sanad was issued on 28.08.1996. Vide two separate sale deeds dated 28.05.2008 respondents No.3 and 5 sold some portion in favour of respondent No.6 and 7. These respondents sought implementation of the sanad resulting in issuance of warrants of possession dated 05.06.2008. Allegedly, it was then that the petitioners realized that joint land had been partitioned and that proceedings h...

Power of Attorney holder can also file cheque bounce cases: Supreme Court

The Supreme Court has held that a criminal complaint in a cheque bounce case can be filed and pursued by a person who holds a power of attorney (PoA) on behalf of the complainant. A three-judge bench headed by Chief Justice P Sathasivam gave the "authoritative" pronouncement on the issue, referred to it by a division bench in view of conflicting judgements of some high courts and the apex court. "We are of the view that the power of attorney holder may be allowed to file, appear and depose for the purpose of issue of process for the offence punishable under Section 138 of the Negotiable Instruments Act (which deals with cheque bounce cases)," the bench, also comprising justices Ranjana Prakash Desai and Ranjan Gogoi, said. The bench, in its judgement, said, "...we clarify the position and answer the questions in the following manner: "Filing of complaint petition under Section 138 of Negotiable Instruments Act through PoA holder is perfectly legal...

Christian who reconverts as Hindu SC will get quota benefits

Amid the controversy over “ghar wapsi”, the Supreme Court on Thursday ruled that a person who “reconverts” from Christianity to Hinduism shall be entitled to reservation benefits if his forefathers belonged to a Scheduled Caste and the community accepts him after “reconversion”. Citing articles by B R Ambedkar and James Massey, and reports by Mandal Commission and Chinappa Commission, the court said: “There has been detailed study to indicate the Scheduled Caste persons belonging to Hindu religion, who had embraced Christianity with some kind of hope or aspiration, have remained socially, educationally and economically backward.” The bench of Justices Dipak Misra and V Gopala Gowda held that a person shall not be deprived of reservation benefits if he decides to “reconvert” to Hinduism and adopts the caste that his forefathers originally belonged to just because he was born to Christian parents or has a Christian spouse. Expanding the scope of a previous Constitution benc...