No Nexus With Prior Disease, Chandigarh District Commission Holds Apollo Munich Health Insurance Co. Liable For Repudiating Claim Based On Non-Disclosure

Brief Facts:

The Complainant availed an "Optima Restore Floater" Policy issued by Apollo Munich Health Insurance Company Pvt. Ltd (“insurance company”) for her son. She lodged a claim when her son was hospitalized due to a sudden chest allergy and high fever. The treatment incurred expenses totalling ₹ 23,499 at Swastik Hospital, Yamuna Nagar (“Hospital”). The Complainant submitted all relevant documents, including medical records and bills, to the Insurance Company. Despite clarifications provided by one Dr. Vineet Jain regarding the treatment history, including a prior instance of "G6PD Deficiency" in 2009 at PGIMER, Chandigarh, the Insurance Company repudiated the claim based on alleged non-disclosure of this pre-existing condition in the proposal form. The Insurance Company further cancelled the policy, which was continuously renewed without interruption since its inception in 2012. Feeling aggrieved, the Complainant approached the District Consumer Disputes Redressal Commission-I, U.T. Chandigarh (“District Commission”) and filed a consumer complaint against the Insurance Company.

In response, the Insurance Company contested the consumer complaint, raising preliminary objections regarding maintainability, cause of action, concealment of material facts, and locus standi. While acknowledging the continuous renewal of the subject policy since 2012 and its validity until December 2019, the Insurance Company argued that the Complainant failed to disclose the insured patient's previous ailment during the proposal form's filling and the policy's inception. It argued that the Complainant's alleged concealment of material facts justified the claim repudiation and policy cancellation.

Observations by the District Commission:

The District Commission noted that the medical records indicated that the insured patient was admitted to the Hospital from May 13 to May 18, 2019, with symptoms such as fever, chest allergy, etc. Additionally, a certificate from the hospital confirmed the previous diagnosis of G6PD Deficiency dating back to 2009 at PGIMER, Chandigarh.

The District Commission held that there was no nexus between the previous ailment (G6PD Deficiency) and the ailments treated in 2019. It held that the Insurance Company failed to establish a connection between the two sets of illnesses. Therefore, the District Commission held that the Insurance Company was liable for deficiency in services for wrongful repudiation of the claim.

Consequently, the District Commission directed the Insurance Company to restore the subject policy in the name of the Complainant and pay ₹ 23,499/- to her along with interest @ 9% per annum. The Insurance Company was also directed to pay a compensation of ₹ 10,000/- to the Complainant and ₹ 7,000/- for the litigation costs incurred by her.