Delhi Consumer Commission Holds Tata AIG Liable For Wrongfully Repudiating Insurance Claim
The District Consumer Disputes Redressal Commission, South-II, Delhi, comprising Monika Aggarwal Srivastava (President), Dr. Rajender Dhar (Member), and Ritu Garodia (Member), held Tata AIG Insurance Company Ltd. liable for wrongfully repudiating the complainant's insurance claim. The Commission allowed the complaint and held that the insurer's failure to adopt a fair, transparent, and consumer-friendly approach while examining the claim amounted to an unfair trade practice and deficiency in service.
Brief Facts
Moidadin, the complainant, obtained a home loan of Rs. 23,50,000/- from AU Small Finance Bank Ltd. on 23-03-2023. To secure the loan, Tata AIG Insurance Company Ltd. (Opposite Party) issued a Group Credit Secure Plus Medical Insurance Policy covering the period from 30-04-2023 to 29-04-2028, with a premium of Rs. 31,723/- paid directly from the loan amount. The policy provided coverage against risks including Critical Illness, Accidental Death, and Permanent Total Disability.
On 24-08-2023, the complainant was admitted to Metro Hospital, where he was diagnosed with lung cancer. One of his lungs had to be surgically removed, rendering him physically incapacitated and unable to work. The complainant thereafter submitted a claim under the policy,requesting they fulfil their obligations under the policy by repaying the outstanding home loan
Upon receiving the complainant's claim, the OP scrutinised his medical records. During which, it was discovered that the complainant had previously been admitted to Rajiv Gandhi Super Specialty Hospital, where he was diagnosed with Coronary Artery Disease (CAD) and Double Vessel Disease (DVD), and had undergone Percutaneous Transluminal Coronary Angioplasty (PTCA). The Opposite Party repudiated the claim and cancelled the policy ab initio on the ground that the complainant had suppressed material facts relating to his pre-existing heart disease.
Aggrieved by the repudiation of the claim, the complainant filed a consumer complaint before the District Consumer Disputes Redressal Commission, South-II, Delhi, seeking payment of the insurance claim along with compensation.
Arguments of the Opposite Party
Tata AIG Insurance Company Ltd (Opposite Party) contended that the complainant had suppressed material facts by failing to disclose his pre-existing heart disease in the proposal form. It argued that the suppression justified repudiation of the claim and cancellation of the policy under the policy terms. The counsel further submitted that the complaint suffered from non-joinder of necessary parties, as AU Small Finance Bank had not been impleaded, and maintained that there was no deficiency in service as it had acted strictly in accordance with the policy conditions.
Observations of the Commission
The District Consumer Disputes Redressal Commission observed that the complainant had established no medical correlation between the heart disease diagnosed in 2020 and the lung cancer diagnosed nearly three years later in 2023. It noted that, although a person with heart disease may develop other ailments, there was no conclusive medical evidence that heart disease necessarily leads to the complainant's lung cancer. It further observed that OP failed to produce medical evidence and instead sought to draw a remote and speculative connection between the two unrelated medical conditions.
The Commission held that repudiation of the insurance claim and cancellation of the policy ab initio on the ground of suppression of a pre-existing heart ailment were unjustified and contrary to the policy terms and conditions. It observed that the failed to adopt a fair, transparent, and consumer-friendly approach in examining the complainant's claim, and held that this conduct amounted to an unfair trade practice and deficiency in service.
Accordingly, the Commission allowed the complaint and directed the OP to pay the insured sum of Rs. 23,50,000/- to the complainant, along with Rs. 25,000/- as compensation for mental agony, harassment, and unfair trade practices, and Rs. 5,000/- towards litigation costs.
Case Title : MOIDADIN vs TATA AIG INSURANCE COMPANY LTD
Case No : CC NO. DC/AB1/670/CC/117/2024