Rewari District Commission Holds TATA AIG General Insurance Co. Liable For Repudiating Medical Claim Based On Unsubstantiated And Unclear Grounds

Brief Facts:

The Complainant brought a health insurance policy from TATA AIG General Insurance Company Ltd (“Insurance Company'). During the policy period, the Complainant fell ill with symptoms including fever, body aches, and pain. Seeking medical assistance, the Complainant visited Manasavi Hospital & Trauma Centre on 14.05.2022 and remained admitted until 18.05.2022. Despite submitting all necessary documents, the insurance company repudiated the claim through a letter stating that there was dishonesty on the part of the Complainant in seeking the claim. The Complainant made several communications with the insurance company but didn't receive any satisfactory response. Feeling aggrieved, the Complainant approached the District Consumer Disputes Redressal Commission, Rewari, Haryana (“District Commission”) and filed a consumer complaint against the insurance company.

In response, the insurance company contended that the claim was rightfully repudiated due to the Complainant's failure to provide requisite documentation. Additionally, it argued that the hospital, owned by one Navneet Kumar, who also had a separate policy with the insurance company, had his claim denied on grounds of fraud. It maintained that the repudiation was justified and urged the District Commission for the dismissal of the complaint.

Observations by the District Commission:

The District Commission held that the Complainant was subjected to unjust treatment by the insurance company, which erroneously and unlawfully repudiated the legitimate medical reimbursement claim. The rejection remarks in the letter had a lack of clarity and specificity regarding the alleged dishonesty in the claim submission process.

It held that the failure of the insurance company to articulate the nature of the alleged fraud or dishonesty committed by the Complainant, coupled with the absence of any indication that the hospitalization was fictitious. It undermined the credibility of the rejection of the claim. Despite the opportunity to appoint an investigator to verify the authenticity of the medical documents, it held that the insurance company failed to pursue this course of action.

The District Commission referred to the guidelines issued by the Insurance Regulatory and Development Authority of India (IRDAI) and emphasized the insurer's obligation to promptly settle claims within 30 days of receiving all necessary documents. Therefore, the District Commission held the insurance company liable for deficiency in services for unjustly denying reimbursement of medical expenses.

Consequently, the District Commission directed the insurance company to promptly reimburse the amount of Rs.74,843/- the Complainant, along with Rs. 20,000/- as compensation for the distress caused to him.