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The consumer commission ordered the insurance company to pay ₹66.50 lakh for rejecting a claim for cancer treatment in the United States.
The Mumbai Suburban District Consumer Disputes Redressal Commission has held Niva Bupa Health Insurance Limited guilty of deficiency in service and ordered it to pay ₹66.50 lakh to the complainant. The commission found that the insurance company had wrongly cancelled the complainant's policy and subsequently illegally rejected his claim for cancer treatment in the United States. The commission stated that due to the wrongful cancellation, the complainant was unable to avail of the cashless facility, and therefore, the company's rejection of the claim on a "cashless-only" basis was not justified.
Case history:
The complainant, was insured under Niva Bupa's Heartbeat – Family First Platinum policy with a sum insured of ₹65 lakh. In August 2018, he was diagnosed with colorectal cancer, following which he underwent treatment in India and later in the United States. The insurer rejected the initial claim of ₹20,47,343, citing "non-disclosure of pre-existing asthma," and subsequently canceled the policy.
The complainant challenged this decision before the Insurance Ombudsman. The Ombudsman declared the policy cancellation illegal and directed the company to pay an amount of ₹20,47,343, which the complainant received in June 2020. Later, a bill of ₹88,34,560 for treatment received at the Memorial Sloan Kettering Cancer Center in the USA was submitted, but the company rejected it, stating that foreign treatment was only covered on a cashless basis.
Arguments from both sides:-
The complainant stated that the policy clearly included coverage for world-class treatment and that all necessary information had been provided to the insurance company in a timely manner. The company repeatedly rejected claims during the cancer treatment, causing the complainant significant mental and financial distress.
On the other hand, Niva Bupa argued that treatment abroad is covered only under a cashless arrangement, and the complainant had not obtained pre-authorization. The company also reiterated the issue of non-disclosure and claimed that the rejection was in accordance with the policy terms and conditions.
The Commission's main observations:-
The commission acknowledged that the insurance company's decision to cancel the policy had already been declared invalid by the insurance ombudsman. Since the policy was illegally cancelled by the company itself, the complainant was unable to avail of the cashless facility. Therefore, the company could not reject the claim by citing the "cashless-only" clause. The commission termed this a clear deficiency in service and an unfair trade practice, especially considering that the complainant was undergoing life-saving treatment.
Commission's order:-
- The insurance company will pay the complainant a claim of ₹66,50,000.
- Payment must be made within 60 days.
- A 6% annual interest rate will be applied for late payments.
- An additional ₹30,000 will be given for mental harassment, and ₹10,000 for legal expenses.
Source by livelaw
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