Setting aside a district forum order, the Maharashtra State Consumer Disputes Redressal Forum last week directed an insurance company to disburse the insured sum to a Masjid Bunder-based man.
The company had repudiated the insurance claim on the grounds that his liver cirrhosis was caused by alcohol consumption.
Observing that the National Insurance Company Ltd action to repudiate the claim was arbitrary and without application of proper mind, the commission said, “It is neither established nor proved by the insurance company that consumption of alcohol is the sole cause of developing ‘cirrhosis of liver’ resulting in developing ‘congenital external disease’.”
The commission directed the insurance company to pay Suresh Jani close to Rs 1.20 lakh towards reimbursement of hospitalization charges and medical expenses. Jani will also get an interest on the sum at 9% per annum from March 2008, which amounts to Rs 37,000.
Jani said he had taken a Rs 2.75 lakh mediclaim policy for himself and his wife, Purnima Jani. The policy was valid from September 2007 to September 2008. On December 13, 2007, Jani was admitted to a private hospital at Mahim for treatment of liver cirrhosis and he was discharged on December 23, 2007.
Jani incurred an expenditure of about Rs 92,919 towards hospitalization and Rs 27,022 towards medical expenses. He filed a claim for reimbursement. In March 2008, his claim was repudiated on the ground that he was treated for ‘alcoholic liver disease as congenital external disease’ and that this was against a clause in the policy.
Under the clause, any disease caused by misuse or abuse of drugs, alcohol or intoxicating substances was not liable for reimbursement. Jani then filed a complaint in the South Mumbai District Consumer Disputes Redressal Forum.
However, through an order dated March 22, 2011, the forum dismissed the complaint. Jani then filed an appeal in the state commission. In the order, the commission stated that it had gone through the repudiation letter. The commission said the counsel for the company could not substantiate whether ‘congenital external disease’ is due to ‘cirrhosis of liver’.
It held the company had not produced any material to justify the repudiation on the basis of that clause. “We are of the opinion that there is deficiency in service on the part of the insurance company,” the commission observed.