Porting Your Policy? Why Lack of Due Diligence by Insurers Could Cost Them, Not You

In a significant judgment delivered on January 23, 2026, the Bombay High Court has reinforced the responsibility of health insurance companies to conduct thorough due diligence when accepting "ported" insurance policies. Justice Somasekhar Sundaresan ruled that an insurer cannot, after accepting premiums and migrating a policy, later avoid liability for claims by blaming the failure of regulatory digital portals or the insured’s non-disclosure of past medical conditions.

The Background: A Question of Migration

The case originated from a dispute involving the late Mr. Haresh K. Joisar, who held a policy with Star Health and Allied Insurance Co. Ltd. having previously undergone treatment for carcinoma. Upon migrating his policy to Care Health Insurance Ltd. (Care Health) in January 2022, the transition was processed without issue.

However, when a subsequent claim was filed, Care Health repudiated it, citing a "non-disclosure" of the patient's carcinoma history. Care Health argued that the Indian Insurance Bureau (IIB) portal—used for sharing medical and claim history—was dysfunctional at the time, and therefore, they were entitled to expect full, fresh disclosure from the insured under the doctrine of uberrima fide (utmost good faith).

The Regulatory Framework

The High Court turned its attention to the Insurance Regulatory and Development Authority of India (Health Insurance) Regulations, 2016 . Regulation 17 and Schedule-I specifically govern the migration of policies. The Court emphasized that these regulations provide a structured, "hassle-free" mechanism for consumers, allowing them to shift insurers without the repetitive burden of starting fresh medical disclosures.

The judgment clarified that the regulatory framework expects the incoming insurer to receive information from the previous insurer to make an informed underwriting decision.

Key Observations

The High Court’s reasoning was clear, emphasizing that the burden of investigation lies with the entity accepting the risk:

> "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 before taking a decision on porting the policy."

Justice Sundaresan further noted that the insurer held the power to reject the application entirely if it lacked access to the necessary data:

> "In my opinion, it is not necessary to accept Mr. Vidyarthi’s contention that as a corollary, no insured will have any responsibility for truthfulness in his statements during porting... Instead, 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."

The Court also observed that:

> "The claim that the IIB portal was not functioning and therefore, the insured can be blamed... cannot be accepted since it would be a reading that directly conflicts with the very specific regulatory objective of permitting hassle-free migration for the insured."

The Verdict: A Balanced Responsibility

The Court upheld the Insurance Ombudsman’s award, dismissing the petition filed by Care Health Insurance. The judgment makes a vital distinction: while the doctrine of utmost good faith remains a cornerstone of insurance law, it does not absolve professional institutions from their specific, mandated duties during the porting process.

This ruling stands as a cautionary tale for insurance companies to ensure their underwriting processes are robust, especially when operating within the portability framework. For policyholders, it provides a much-needed assurance that they are not exclusively liable for the administrative failures between insurance companies during the migration of their coverage.

The Court concluded that since Care Health had consciously chosen to take over the risk and accepted the premium, their attempt to disclaim knowledge of existing medical history was legally untenable in light of the IRDAI’s clear regulatory intent.