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IN THE HIGH COURT OF GUJARAT AT AHMEDABAD
Nirzar S. Desai, J.
Star Health and Allied Insurance Co. Ltd. – Petitioner
Versus
Kalpeshkumar Pandya – Respondent
R/Special Civil Application No. 19985 of 2022
Decided On : 07-10-2022
Insurance - Claim Dispute - Insurance Regulatory and Development Authority of India (IRDA) - 2013 Regulations, 2016 Regulations - 8(d)(iv) - The court considered the 2013 and 2016 Regulations, highlighting the absence of a specific bar in the 2016 Regulations regarding the consideration of renewed policies for claim settlement. The court emphasized the purpose of health insurance and the need to protect the rights of policyholders, ultimately dismissing the petition and imposing costs on the insurance company.
Fact of the Case:
The insurance company challenged the judgment and award passed by the Insurance Ombudsman, Ahmedabad, regarding the settlement of a claim by the policy holder for hospitalization expenses. The insurance company argued that the claim was not admissible under the 2016 Regulations, while the petitioner sought consideration of the renewed policy period for claim settlement.
Finding of the Court:
The court found that the insurance company attempted to benefit from an ambiguity between the 2013 and 2016 Regulations, emphasizing the genuine need for the policy holder to receive the remaining amount of the claim. The court also noted the purpose of health insurance and the interests of policy holders, ultimately dismissing the petition and imposing costs on the insurance company.
Issues: Interpretation of 2013 and 2016 Regulations, consideration of renewed policy period for claim settlement, abuse of process of law by the insurance company.
Ratio Decidendi: The absence of a specific bar in the 2016 Regulations regarding the consideration of renewed policies for claim settlement, the genuine need for the policy holder to receive the remaining amount of the claim, and the abuse of process of law by the insurance company.
Final Decision: The petition was dismissed, and costs of Rs.50,000/- were imposed on the insurance company, with a portion to be paid to the Gujarat High Court Advocates’ Library and the remaining amount to be disbursed in favor of the respondent policy holder.
ORDER :
1. By way of this petition, which, prima facie, this Court believes that is nothing but abuse and misuse of process of law at the hands of insurance company, the petitioner challenged the judgment and award dated 29.07.2022 passed by the Insurance Ombudsman, Ahmedabad in Complaint No.AHD-H-044-2122-0897 on the ground that the same is illegal and wrong.
2.1 In the nutshell, it is the case of the insurance company that though the policy holder, who availed mediclaim from the insurance company for a validity period upto 18.10.2020 and was subsequently renewed thereafter for a sum insured of Rs.5 Lakhs and though the period of hospitalisation of policy holder was between 26.09.2020 till 24.10.2020, when a claim was raised by the policy holder, the insurance company proceeded the claim of the petitioner only upto the validity period of the petitioner and paid a sum of Rs.5/ Lakhs.
2.2 The total bill placed by policy holder was Rs.7,06,385/-.
2.3 It is the case of the petitioner that as per the 2016 Regulations which is named as Insurance Regulatory and Development Authority of India (‘IRDA’, for short), the petitioner is not entitled to aforesaid claim.
3.1 Learned advocate for the petitioner Mr.Raval submitted in the year 2013 Regulations, there was clause 8(d)(iv), which is in respect of settlement / rejection of claim by the insurer which reads as under:
a. xxx ….
b. ….
c. ….
d. Settlement / Rejection of claim by insurer:
i. xxx ….
ii. … …
iii. … ….
iv. If the claim event falls within two policy periods, the claims shall be paid taking into consideration the available sum insured in the two policy periods, including the deductibles for each policy period. Such eligible claim amount to be payable to the insured shall be reduced to the extent of premium to be received for the renewal / due date of premium of health insurance policy, if not received earlier.”
3.2 Learned advocate Mr.Raval submitted that in the 2016 Regulations, aforesaid clause was omitted. Meaning thereby, that if the hospitalisation of patient takes place during the validity period of two policies, the sum insured only in respect of first policy is required to be considered and even if policy is renewed for remaining period, the amount cannot be said to be admissible amount though the patient is covered under the policy.
3.3 Learned advocate Mr.Raval further submitted that the petitioner insurance company has already paid a sum of Rs.5 Lakhs to the policy holder, however, while considering the claim of the policy holder, Insurance Ombudsman vide impugned order dated 29.07.2022 directed the Insurance Company to consider the period of renewed policy also for an amount admissible while issuing following guidelines, in para:6 of the order dated 29.07.2022.
Taking into account the facts and circumstances of the case and the submissions made by both the parties during the course of hearing, the Forum hereby directs respondent insurer to revisit this case and settle the claim for hospitalisation expenses for the days falling under renewed policy for an amount admissible under the policy as per guidelines as per the terms of the policy within 30 days from the receipt of the award. They may obtain further information or additional documents from the complainant. The complainant is also directed to co-operate with the respondent insurer in this regard. The Complaint is disposed of accordingly.”
3.4 According to Mr.Raval, though the medical condition or hospitalisation of the policy holder is not questioned by the insurer and insurance company has already paid amount of Rs.5 Lakhs to the respondent policy holder, now the dispute revolves only around Rs.3 Lakhs for which direction has been issued by Ombudsman to the respondent company to consider the renewed policy pe
The absence of a specific bar in the 2016 Regulations regarding the consideration of renewed policies for claim settlement and the need to protect the rights of policyholders.
Once there is a valid insurance policy available in favour of appellant, claim made by him for reimbursement of expenses incurred is justifiable and deserves to be paid to him.
Exclusion clause for alcohol-related illness applies only if the disease is solely and directly caused by alcohol consumption.
Point of Law : Default in refund of premium amount within a reasonable time will come within definition of 'deficiency' as defined in Rule 13 of Insurance Ombudsman Rules, 2017.
Insurance claim cannot be repudiated on hypertechnical grounds.
(1) Significance of Policy Documentation – Policy documents issued by the appellant contained a “dash” in the column for pre-existing diseases. This serves as an admission by the insurer that no such....
Insurance policies allow multiple claims for loss of job until the sum insured is exhausted, subject to maximum payment limits.
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