Insurance claims should not be denied based on non-material suppression that does not impact risk assessment.

The petitioner had a health insurance policy from 14.4.2020 till 13.4.2021 for a sum of Rs.5 lakhs for each person. The persons covered under the policies were herself, her husband, mother, mother – in - law and son. On 24.4.2020, the mother – in - law, named Thankamani was diagnosed with carcinoma of left breast and Modified Radical Mastectomy was done. A sum of ₹5,18,207.83 was expended by the petitioner for the treatment received. The claim was rejected and the petitioner filed a complaint before the insurance Ombudsman. The complaint was dismissed and the petitioner filed W.P.(C) No. 27939 of 2021 and this court by Ext.P5 judgment, set aside the order of the insurance Ombudsman and directed reconsideration after giving necessary opportunity of being heard within 4 months from the date of receipt of a copy of the judgment.

2. The Insurance Ombudsman, by Ext.P6 award, upheld the rejection of the claim and the complaint was dismissed. The petitioner challenges Ext.P6 and wants a declaration that the petitioner is entitled to claim the amount of ₹5,18,207.38 with interest.

3. Heard the counsel for the petitioner and the respondent Insurance company.

4. The counsel for the petitioner submits that the dismissal of the award by the Ombudsman is illegal and improper. He submitted that the petitioner’s mother-in-law underwent treatment for cancer and there is no pre-existing disease which was suppressed. It is true that the patient had undergone Excision of Benign breast swelling 15 years ago, but the same will not amount to surgery or a procedure under policy terms. The patient had no malignant medical condition prior to the policy. The respondent insurance company, after being satisfied that there is no pre-

existing disease, had issued the policy and the same cannot be rejected on the ground of pre-existing decease.

5. Earlier, the Ombudsman had dismissed the claim and it was challenged before this court in W.P.(C) No.27939 of 2021 and this court by Ext.P5 directed the Ombudsman to consider whether the Excision of Benign breast swelling done before 15 years, is a surgery or procedure. The Ombudsman, without considering the policy condition regarding surgery or procedure, dismissed the claim. Therefore, prayed that the Writ Petition be allowed.

6. A counter affidavit is filed by the respondents, wherein it is stated that the Ombudsman, after direction from this court, considered whether the Excision of Benign breast swelling is a surgery or procedure and relying on clause 11.81 of Policy certificate, came to a definite conclusion that it is a surgery and therefore, the petitioner has suppressed the fact in question No.D of Section A of Clause 5 of the Proposal Form.

7. Under clause 5D the question that is posed in the proposal form is thus:

‘Has the applicant EVER undergone or been advised to undergo or does he/she plan to undergo any form of surgery or procedure?’.

8. The answer to the said question is ‘No’. Section B of the clause 5 would be applicable, if answer to sub clause D of section 5 was ‘Yes’. Since the petitioner has stated ‘No’, section B was unanswered, thereby the respondent Company was kept dark. The petitioner suppressed the fact in the proposal form that the patient has undergone a surgery or procedure. It is on this ground of suppression of material facts that the claim was rejected. Ext.P7 is the rejection letter issued to the petitioner wherein it is specifically stated that the reason for rejection is known case of breast lump prior to policy and it is not the case of rejection on the basis of pre - existing disease.

9. Counsel for the respondent Insurance Company Shri.

Jithin Issac submi