The Life Insurance Corporation of India has become the “richest” organisation in the country by rejecting rightful claims of insured under mediclaim policies on “flimsy” grounds, the Delhi State Consumer Commission has said.
“We have deprecated this practice of insurance companies of taking a flimsy clue or remote reference from the discharge summary or statement with a view to reject the rightful claim of the insured. It appears that this is how the respondent (LIC) has become one of the richest organisation in India,” a bench presided by the commission’s member Salma Noor said.
The commission made the observation while directing LIC to pay Rs 24.2 lakh, including the compensation and the sum assured, to the husband of a insurance policy holder who had died of infection after a surgery for removal of her uterus.
The bench, also comprising its member V K Gupta, said LIC should realise that it “survives and thrives” on consumer and “propensity to become unjustly rich by rejecting their claims” is highly depreciable. The LIC had rejected Delhi resident Yogesh Baisiwala’s claim on the ground that his wife had concealed the fact that she had been a heart patient at the time of availing the insurance cover.
The state-owned insurance firm relied on an angiography undergone by the woman, prior to her obtaining the policy, to contend she had been a heart patient.
The bench rejected the firm’s contention and directed LIC to honour the claim saying the woman had died due to some infection, contracted subsequent to her surgery for uterus removal, and not of heart ailment.
It also pointed out that an angiography is a test for ascertaining whether a person is suffering from any heart ailment and it is not a disease or a pre-existing problem
The commission’s order came on Baisiwala’s plea against the rejection of his claim by LIC after his wife’s death in December 2006.
He had said his late wife had been insured for Rs 20 lakh under a policy bought in March 2006 and the insurance firm had rejected his claim on the sole ground that she had concealed that she had undergone angiography eight years prior to availing the policy.
He had also said LIC had subjected his wife to rigorous medical tests before issuing the policy to her.
The state consumer commission said an insurance firm is under the obligation to ensure whether a person is fit to be insured or not before issuing medi-claim policy.
“It appears that insurance firms don’t discharge this obligation as half of the population is suffering from malaises (hypertension, diabetes, occasional pain, cold,
headache, arthritis) and they would be left with no or very little business. Thus any attempt by insurer to repudiate the claim for such non-disclosure is not permissible…”
“We hereby direct the opposite party (LIC) shall pay Rs 20 lakh as the amount of the policy to the complainant and it shall also pay Rs four lakh as compensation for mental agony, harassment and sheet suffering to him,” the bench said.