The Additional District Consumer Disputes Redressal Commission-II, Bangalore Urban bench, has ruled in favor of Mr. John Jacob, a policyholder of Niva Bupa Health Insurance Co. Ltd., finding the insurance company liable for deficiency in service and unfair trade practices. The complainant’s wife, Mrs. Princy John, was hospitalized for acute exacerbation of reactive airway disease, but the insurance company wrongfully rejected her claim, citing a pre-existing condition of diabetes.
The insurance company initially rejected the claim, stating that the treatment was related to sleep disorders, and later, after the complainant submitted additional documents, it upheld its rejection, citing the 36-month waiting period for treating a pre-existing condition like diabetes and exclusion of diagnostic and evaluation purposes under Clause 6.4 of the policy. The complainant provided a medical certificate, clarifying that his wife was admitted solely for acute exacerbation of reactive airway disease and not for diabetes evaluation, but the insurance company continued to reject the claim.
The District Commission held that the burden was on the insurance company to demonstrate that the treatment was related to the pre-existing disease, diabetes, and that mere assertions were not sufficient evidence. The Commission noted that the insurance company failed to provide valid medical justification for linking the treatment to the pre-existing condition.
The District Commission held that the insurance company had repeatedly rejected the claim without proper and acceptable reasons, and thus, found deficiency of service and unfair trade practices. Consequently, the Commission directed the insurance company to pay the principal amount of Rs. 53,480/-, compensation of Rs. 5,000/- for deficiency in service and mental agony, and Rs. 5,000/- towards litigation costs.
This case highlights the importance of proper documentation and evidence in insurance claims and the need for insurance companies to provide valid medical justification for denying claims. The District Commission’s decision emphasizes the need for insurance companies to conduct a thorough investigation and provide valid reasons for rejecting claims, rather than relying on mere assertions or technicalities. The case also underscores the paramount importance of treating customers fairly and providing adequate services as per the terms of the policy.