Insured cannot be held responsible for suppression of material fact – Insurance Ombudsman

Case no. CHD-G-049-1617-0569
In the matter of Mrs. Hardish Sandhu
Vs.
New India Assurance Company Ltd.

Insurance Ombudsman Date of award :  06.07 .2017

(Mediclaim- Health Insurance Claim)

FACTS: On 07.10.2016 Mrs. Hardish Sandhu filed a complaint against New India Assurance Company Ltd. about the repudiation of her overseas mediclaim. She was insured under Policy No. 360500/34/15/0900000019 for the period from 12.07.2015 to 08.11.2015. The complainant was admitted in the hospital from 30.10.2015 to 07.11.2015 with the complaint of dysponea and lethargy and was diagnosed of Methotrexate induced pancytopenia. The claim was repudiated on the grounds of pre-existing disease as the patient was on folic acid and Methotrexate; which had resulted in inducing pancytopenia. The fact that the patient was on folic acid and Methotrexate was not disclosed to the insurance company. The patient was again admitted on 18.11.2015 for a day. The claim was not entertained as the policy had expired on 08.11.2015.

FINDINGS: The complainant had taken the policy for the period from 12.07.2015 to 08.11.2015. At the time of taking of the policy, the complainant had declared her past history and stated she was admitted in the PGI, Chandigarh for the treatment of arthritis. The patient had undergone knee replacement. The insurance company did not ask any question whether the proposer was on any medication or not. The complainant was again admitted in the hospital on 18.11.2015 for one day. The complainant stated though her policy had expired on 08.11.2015 yet she continued to be held covered as provided in the period of insurance clause. The insurer maintained that the second admission was elective and beyond the scope of the cover as provided in period of insurance clause.

DECISION: The complainant had the history of knee replacement and in her proposal she had declared that she was admitted for the treatment of arthritis. The insurer had not asked for further details whether she was on any medication or not. The complainant was admitted from 30.10.2015 to 07.11.2015 being a case of dyspepsia and lethargy and was diagnosed of Methotrexate induced pancytopenia. Since it was not disclosed to the insurer that the proposer was on folic acid and Methotrexate, the claim was refused. It was held that there was no concealment of the facts by the complainant as she had declared her past medical condition. The insurer did not seek further clarifications. Therefore, the insurer was estopped to raise the issue of pre-existing condition. The submission of the complainant that her second admission on 18.11.2015 which was beyond the policy period was also covered was not accepted. As per period of insurance clause, automatic extension up to 7 days was allowed without any extra charges provided it was necessitated by delay of public transport services. It was further provided in the clause that if the injury/ illness/ accident covered under the policy was contracted during the policy period and the treatment had commenced during the policy period and continues beyond policy period; only emergency expenses would be paid up to 45 days. It was observed that the second admission was elective and only medical tests had been conducted. No treatment or medication was given or prescribed. Conditions as laid down in the period of insurance clause were not complied with. The complaint was allowed for the reimbursement of first admission and dismissed for the second admission.