Insurance Companies Must Show High Level Of Professionalism & Diligence While Vetting Application For Porting Policy: Bombay High Court
Narsi Benwal
2 Feb 2026 8:04 PM IST
Insurance companies when accepting porting of a policy must show highest level of professionalism and due diligence in vetting the customer's previous insurance claim history and then take an 'informed' decision, the Bombay High Court ruled recently.
Single-judge Justice Somasekhar Sundaresan said that the insurance companies when dealing with an application by a customer to port his or her insurance policy from one company to the another, cannot blame the customer for failing to furnish the details of previous policy's claim history as it is the task of the previous insurance company to provide such information.
"Considering the intensity of the promise that insurance companies hold to society, it is must be legitimately and reasonably expected that insurers would exercise the highest degree of professionalism and back to back, diligence in vetting the policy particulars and claim history of an applicant for porting, before accepting or rejecting a request for porting of the policy," the judge held in the order passed on January 23.
The bench delivered the ruling while dealing with a plea filed by the Care Health Insurance Ltd which challenged the award by an Insurance Ombudsman, who on May 7, 2024 directed the company to reimburse the claim of one Manjula Joisar. As per the company, Joisar was initially insured with Star Health and Allied Insurance Co. Ltd. which had honoured her claims towards the treatment of her husband, who was diagnosed with 'carcinoma' in his tonsils. However, from January 2022, Joisar applied for porting their policy to Care Health Insurance company and even paid the premium etc. However, when they made claims for some follow up treatments, the company refused to honour the same on the ground that it was not informed about the disease and the treatment when the policy was ported.
Justice Sundaresan noted that the Indian Insurance Bureau (IIB), a website, on which detailed claim history and other information of a customer are entered by an insurance company especially when the policy is being ported to some other company. The judge noted the contention that when Joisar's application for porting was being processed, the IIB portal was down and thus Star Health could not upload the details of claim history and other such details.
This, the judge, however, held cannot be a ground to deny relief to the customers.
"Having accepted the request for porting and having happily accepted the premium, the breakdown in the IIB portal cannot be the reason for excusing Care Health from exercise of diligence before taking a decision on porting the policy. No fault can be found with the well reasoned approach of the Insurance Ombudsman, which is in perfect consonance with the regulatory objective of the IRDA Regulations," the judge observed.
On the previous company's failure to furnish such details, the insurance company can reject the application for porting the policy.
The judge noted that Insurance Regulatory and Development Authority (IRDA) details how an application for moving from one insurance company to another has to be made within a window of 60 days prior to the scheduled expiry of the previous policy and ending 45 days prior to the expiry. This time frame, the judge pointed out, gives at least 15 days period for the new insurance company to assess the customer's previous claim history before agreeing to portability.
"The regulatory framework, therefore, entails a standard of diligence from the insurer in taking a view one way or the other on the request for porting. There is no obligation to port the policy and take over the risk without receipt of information from the existing insurer. If the IIB portal was dysfunctional, it would always have been open to the Petitioner to reject the request for porting on the premise that it had not received the requisite information to accept the request for porting the policy. It is inexplicable that Care Health agreed to port the policy and accept the premium without the information being made available by Star Health," the judge opined.
The court made it clear that even for assumption, if it is taken that Care Health was happy to accept the porting without receipt of information, the insured customer, however, cannot have been asked to make disclosures all over again as if it were a fresh policy.
"Such an approach would militate against the concept of 'migration' which is clearly a regulatory framework for simply moving from one insurer to another without the hassle of opening a new risk assessment all over again. The insured is entitled to believe that the new insurer had taken an informed decision on accepting the porting request. Care Health was expected to be diligent in reaching out to Star Health if the portal was not functional to take over the records including claim history. The expectation is that the entire medical history and claim history of the insured was available with Care Health before accepting the porting request and the consequential receipt of policy premium," the judge said.
With these observations, Justice Sundaresan refused to interfere with the order passed by the Insurance Ombudsman.
Appearance:
Advocates RS Vidyarthi, Mohit Turakkia, and AS Vidyarthi appeared for the Insurance Company.
Case Title: Care Health Insurance Ltd vs Manjula Haresh Joisar (Writ Petition 9028 of 2024)
Citation: 2026 LiveLaw (Bom) 49