Chandigarh Consumer Commission Holds Max Bupa Health Insurance Co. Liable For Wrongful Repudiation Of Maternity Claim

The District Consumer Disputes Redressal Commission-II, U.T. Chandigarh, comprising Amrinder Singh Sidhu (President) and B.M. Sharma (Member), has directed Max Bupa Health Insurance Co. Ltd. to reimburse a maternity claim and pay compensation, holding the repudiation of the claim to be wrong and arbitrary.

The Commission held that an insurer cannot deny a claim on the ground of non-disclosure of a medical condition such as thalassemia minor when the said condition has no nexus or proximity to the purpose of hospitalization, which in the present case was a normal delivery.

Background

The complainant had obtained a health insurance policy covering maternity benefits, valid from 21 December 2018 to 20 December 2019, and had been continuously insured with the company since 21 December 2015. On 9 June 2019, the complainant's wife was admitted to Cloudnine Hospital, Chandigarh, where she delivered a baby girl through normal delivery on 10 June 2019, without complications. She was discharged on 11 June 2019.

The complainant incurred medical expenses of approximately ₹70,336 towards the hospitalization and delivery. A reimbursement claim of about ₹76,000, as per hospital billing records, was submitted under the maternity benefits clause of the policy. However, the insurer repudiated the claim vide letter dated 3 March 2020, citing incomplete medical history regarding thalassemia minor and invoking Clause 9.3 of the policy.

Aggrieved by the repudiation, the complainant approached the District Consumer Commission alleging arbitrary rejection of the claim, deficiency in service, and unfair trade practice.

Contentions

Insurer (OPs 1 & 2):

The insurance company admitted issuance of the policy and receipt of the claim but contended that the claim was repudiated due to incomplete medical history relating to thalassemia minor, as required under the policy terms. It was argued that the complainant failed to submit the requisite documents and that there was no deficiency in service.

Hospital (OP 3):

The hospital did not appear before the Commission and was proceeded against ex parte.

Observations & Decision

The Commission noted that it was an admitted position that the complainant and his wife were covered under a valid health insurance policy which included maternity benefits, and that the hospitalization of the insured patient was solely for normal delivery. On examining the discharge summary, the Commission observed that although thalassemia minor was mentioned in the medical history, it had no connection or nexus with the purpose of hospitalization or the delivery.

The Commission held that repudiation of the claim on the ground of incomplete medical history of thalassemia minor was arbitrary and unjustified, as the condition neither amounted to suppression of material facts nor had any bearing on the maternity claim. It reiterated that repudiation of insurance claims on technical and irrelevant grounds amounts to deficiency in service.

While noting that higher medical expenses were incurred, the Commission observed that the maternity benefit under the policy was capped at ₹35,000 per policy year.

Accordingly, the complaint was partly allowed, and Opposite Parties No. 1 and 2 were directed to:

• Reimburse ₹35,000 towards the maternity claim with interest at 9% per annum from 3 March 2020 till realization; and

• Pay ₹20,000 towards compensation for harassment and litigation expenses.

The Commission found no deficiency in service on the part of Opposite Party No. 3 (Hospital) and dismissed the complaint against it. The order was directed to be complied with within 60 days from receipt of the certified copy.

Case No.: Consumer Complaint No. DC/AB1/44/CC/236/2021

Case Title: Dilpreet Singh Gandhi v. Max Bupa Health Insurance Company Ltd. & Ors.

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