Insurance Company Can Repudiate Mediclaim If Insured Fails To Disclose Pre-Existing Illness: Karnataka High Court

A single judge bench of Justice M Nagaprasanna observed thus while dismissing a petition filed by a couple against the order of Insurance Ombudsman declining to accept the insurance claim of the petitioners.

The petitioners had sought quashing of a letter of repudiation issued by the 2nd respondent/Insurance Company and a direction to release of an amount of Rs.28,43,684 being the Insurance claim of the petitioners.

The bench said,

"A mediclaim policy being a non-life insurance policy, is a contract of insurance falling in the category of a contract uberrimae fidei which would mean, the contract of utmost good faith on the part of the assured. Divulging pre-existing illness was a duty of the insured. Having not done so, the repudiation of the claim cannot be found fault with."

Case Details:

The petitioners had availed "Home Suraksha Plus" policy on 29-04-2017 which covered major medical illness and procedures. On 10-08-2020, the Doctors at Vikram Hospital diagnosed the 1st petitioner to be suffering from Multiple Sclerosis and started treatment immediately. After the treatment, the insurance claim was made on the strength of the insurance coverage that was given by the 2nd respondent/Company.

The claim was however repudiated on the ground that the 1st petitioner was diagnosed to be suffering from multiple sclerosis from 27-03-2017 and the ailment was a pre-existing ailment which had not been divulged by the petitioners while filling the form claiming such insurance.

Findings:

The bench noted that on 27-03-2017 the 1st petitioner developed giddiness and vomiting. She was initially taken to Baptist Hospital who advised to undergo an MRI. The doctors on going through the report opined that the diagnosis was acute vertigo white matter disease of CNS ('Central Nervous System'). The course in the hospital as described was 'symptomatic treatment with beta histines'.

Further, MRI done outside showed T2 hyperintense lesion in the dorso medial aspect of upper pons (multiple sclerosis). Neurology opinion was advised at discharge. It was seen that the 1st petitioner was symptomatically better. Regular monitoring was also advised. The review was to be with the Neurology Department on 10-04-2017. Therefore, the 1st petitioner was thus diagnosed with a symptomatic attached to multiple sclerosis.

The bench said, "Therefore, there was a doubt in the minds of the doctors that it could be multiple sclerosis as it was attached to the Central Nervous System. This discharge was made on 30-03-2017 after about 3 days of the 1st petitioner being an inpatient. Barely after 30 days of getting discharged, the petitioners were offered the insurance policy and it was accepted by them on 29-04-2017."

Referring to the insurance policy and on going through the medical records the bench held, "The contention of the learned counsel for the petitioners is that it is not a pre-existing illness. It was for the first time diagnosed to be multiple sclerosis. This submission goes against the records and is unacceptable. Medical terminology cannot be fixed in terms of nomenclature though every diagnosis of the 1st petitioner is related to multiple sclerosis."

Accordingly, it dismissed the petition.

Case Title: MRS. JAYA ELIZABETH MATHEW & ANR v. INSURANCE OMBUDSMAN FOR THE STATE OF KARNATAKA & ANR

Case No: WRIT PETITION No.14346 OF 2021

Citation: 2022 LiveLaw (kar) 423

Date of Order: 21ST DAY OF OCTOBER, 2022

Appearance: APOORV KHATOR, ADVOCATE FOR PARASHURAM A.L, ADVOCATE for petitioners.

S.KRISHNA KISHORE, ADVOCATE FOR R2

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