Insurers Cannot Shift Burden of Non-Disclosure to Policyholders During Porting: Bombay High Court - 2026-01-23

Insurers Must Exercise Diligence During Policy Migration: Bombay HC

In a significant ruling clarifying the obligations of insurers when a customer migrates their health coverage, the Bombay High Court has affirmed that insurance providers cannot pivot to blaming policyholders for non-disclosure when they have failed to exercise their own due diligence in vetting a ported policy. Justice Somasekhar Sundaresan, presiding over the matter of Care Health Insurance Ltd v. Manjula Haresh Joisar , dismissed the insurer’s plea, emphasizing that the process of "porting" is a conscious assumption of risk that requires the insurer to be fully informed.

The Backdrop: A Dispute Over Coverage

The case arose from a claim filed by the wife of the late Mr. Haresh K. Joisar. Mr. Joisar, who had been insured with Star Health and Allied Insurance Co. Ltd. , had a medical history involving carcinoma and chemotherapy treatments. When his policy was ported to Care Health Insurance Limited , Mr. Joisar’s subsequent hospitalisation led to a claim.

Care Health repudiated the claim, citing "non-disclosure of carcinoma." This prompted a dispute before the Insurance Ombudsman , who ruled in favor of the policyholder. Care Health then approached the High Court, asserting that the IRDAI -mandated portal—maintained by the Indian Insurance Bureau (IIB) —was dysfunctional at the time, preventing them from accessing the full medical history required to perform a comprehensive risk assessment.

The Core Controversy: Whose Duty Is It Anyway?

The central legal question was whether an insurer, by accepting a porting request, is deemed to have acquired constructive knowledge of the insured's claim history, or if the burden of disclosure remains solely with the policyholder.

The insurer argued essentially that the doctrine of uberrima fide (utmost good faith) requires the insured to disclose all previous medical conditions, regardless of the transition between providers. The High Court, however, looked beyond this standard, focusing on the specific regulatory framework set out by the IRDAI .

Court’s Analysis: The "Eyes Open" Principle

Justice Sundaresan’s bench meticulously analyzed Regulation 17 of the IRDA (Health Insurance) Regulations, 2016 . Highlighting the regulatory objective of "hassle-free migration," the court noted that the framework provides a window for insurers to assess historical data before accepting a proposal.

The court’s reasoning was sharp: if an insurer claims the technical infrastructure (the IIB portal) is broken, the remedy under the regulations is to reject the porting request—not to accept the premium while leaving the burden of verification on the client. By accepting the premium, the insurer effectively "took over the risk with eyes open."

Key Observations

The High Court’s decision provides vital guidance for the insurance sector:

• On Regulatory Expectation: "The regulatory framework, therefore, entails a standard of diligence from the insurer in taking a view one way or the other on the request for porting."
• On Corporate Responsibility: "Having accepted the request for porting and having happily accepted the premium, the breakdown in the IIB portal cannot be the reason for excusing Care Health from exercise of diligence."
• On the Nature of Portability: "The proposition is that when the insurer accepts the porting request, he does so with eyes open and it is presumed to be an informed decision."

Final Verdict: Integrity of the Migration Process

The court ultimately dismissed the Writ Petition, confirming that the Insurance Ombudsman ’s decision was legally sound. The judgment reinforces that portability is not merely a technical checkbox exercise but an underwriting process. For the public, this is a victory for the integrity of the migration mechanism, ensuring that insurers cannot use technical interface failures as a shield for poor underwriting practices after accepting premium payments. For legal professionals, the case serves as a precedent: structural failures in regulatory portals do not absolve insurers of their core duty to act with professional diligence when assuming a new risk.