Insurer Failed to Prove Treatment Was Linked to Pre-Existing Disease, Says Commission
New Delhi: The Delhi Consumer Disputes Redressal Commission has directed National Insurance Company to reimburse Rs 10 lakh along with interest at the rate of 7 per cent per annum and pay Rs 50,000 towards litigation expenses to the legal heirs of a deceased woman policyholder. The Commission held that the insurer had wrongly rejected the mediclaim and failed to establish that the treatment was connected to any pre-existing medical condition.
The order was passed by a bench comprising President Sonica Mehrotra and members Richa Jindal and Anil Kumar. The Commission observed that the insurance company could not provide sufficient evidence to justify the rejection of the claim.
According to case records, the mediclaim policy was initially purchased on January 27, 2015, and remained valid until January 26, 2016. The policy was renewed on January 12, 2016, extending coverage until January 26, 2017. A third-party administrator (TPA) had been appointed to process claims and provide cashless insurance services.
On January 6, 2016, the policyholder was admitted to Max Hospital, Saket, with complaints of weakness, fever, severe cold, cough, and breathing difficulties. She was diagnosed with Type 1 Respiratory Failure and shifted to the intensive care unit, where she required ventilator support.
Initially, the treating doctor suggested that the respiratory failure might be related to the patient’s chronic anaemia. However, following further medical evaluation and treatment, the doctor concluded that the respiratory condition was not connected to the pre-existing anaemia. Despite this clarification, the TPA denied the cashless treatment facility, citing the initial assessment linking the illness to a pre-existing condition.
The patient’s daughter reportedly engaged in multiple communications with the TPA through email, but the request for cashless treatment was ultimately rejected. The policyholder was discharged from the hospital on February 20, 2016, after undergoing several medical procedures.
During the proceedings, the District Consumer Disputes Redressal Commission noted that the claim had been rejected on the ground that the patient suffered from Hereditary Hemorrhagic Telangiectasia accompanied by chronic anaemia. However, the Commission found that the treatment in question was not related to the pre-existing condition.
The Commission further observed that the burden of proving a nexus between a pre-existing disease and the treatment rests on the party making such an allegation. In this case, the insurer failed to provide adequate evidence supporting its claim.
The insurer had also argued that the mediclaim coverage should be restricted because the policy covered two insured individuals under a sum insured of Rs 5 lakh. However, the Commission noted that the insurance company failed to establish, through policy terms and conditions, that each insured person was entitled to only 50 per cent of the total coverage amount.
Appearing for the complainants, Advocate Harshita Verma submitted that the total treatment expenditure amounted to Rs 31.28 lakh, of which the family paid Rs 25.38 lakh to Max Hospital. The claim form was submitted through the TPA to National Insurance Company on February 29, 2016, but was subsequently rejected.
The complainants alleged that the rejection was arbitrary, unlawful, and amounted to deficiency in service. They further argued that the insurer had unfairly interpreted policy clauses for its own benefit and had relied on vague grounds by attributing the illness to complications arising from a pre-existing condition.
Seeking reimbursement under the renewed policy, the complainants claimed Rs 10 lakh along with compensation. During the pendency of the proceedings, the policyholder, Rita Malhotra, passed away on February 13, 2018, following which her legal heirs were substituted in the case.
After examining the evidence and submissions, the Delhi Consumer Commission ruled in favour of the complainants and directed National Insurance Company to reimburse Rs 10 lakh, pay interest at 7 per cent per annum, and bear litigation costs of Rs 50,000.
