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2026 Supreme(Online)(SCDRC) 5114
STATE CONSUMER DISPUTES REDRESSAL COMMISSION
Rajes Guha Ray, Judicial Member, Santanu Saha, Member
Jay Prakash Keshari – Appellant
Versus
Manager, Religare Health Ins. Co. Ltd. – Respondent
CONSUMER COMPLAINT NO. SC/19/CC/379/2019
For the Appellants/Petitioners: Rajesh Biswas
For the Respondents: Sreemanta Sadhukhan
In a ported health insurance policy, an insurer cannot repudiate a claim for non-disclosure of pre-existing disease without conclusively proving deliberate and fraudulent concealment, particularly when the insurer failed to exercise due diligence during the portability process and the policy benefits from established continuity of coverage.
Headnote:(A) Consumer Protection Act, 1986 - Portability of Health Insurance Policy - Repudiation of claim on grounds of non-disclosure - Burden of proof regarding fraudulent suppression rests on the insurer - Mere existence of pre-existing disease does not equate to fraudulent concealment - Continuity of coverage from previous insurer significantly impacts underwriting obligations - Repudiation without clear and conclusive proof of intentional suppression is arbitrary and constitutes deficiency in service. (Paras 10, 16, 17, 18)
Facts of the case:
The complainants held a health insurance policy initially with a prior insurer since 2011, which was later ported to the current insurer in 2017. Following the hospitalization of the second complainant, the insurer repudiated the claim alleging non-disclosure of hypertension as a pre-existing disease at the time of proposal. The complainants challenged this repudiation as arbitrary, citing that the prior policy already recorded the condition and that portability under the regulatory framework should have transferred the relevant medical history.
Findings of Court:
the insurer failed to conclusively prove deliberate and fraudulent suppression by the insured. The conflicting versions of the previous policy produced by the insurer and the lack of reliance on verified portability data from the regulator rendered the repudiation based solely on the proposal form mechanically flawed and legally unsustainable. The insurer's failure to discharge the burden of proof necessitated an order for reimbursement.
Issues: Whether the insurer was justified in repudiating the mediclaim based on the allegation of non-disclosure of material facts, considering the policy was a ported product from an existing long-standing insurance coverage.
Ratio Decidendi: An insurer cannot rely solely on omissions in a proposal form to repudiate a claim for a ported policy without establishing clear evidence of fraudulent concealment, especially where the policy was part of a continuous insurance relationship and the insurer failed to exercise requisite due diligence during the portability process.
Result: Complaint allowed in part; insurer directed to reimburse hospitalization expenses with interest and pay compensation for mental agony and legal costs.
ORDER
Hon’ble Mr. Santanu Saha, Member
The present complaint has been filed under the Consumer Protection Act, 1986 alleging deficiency in service and unfair trade practice on the part of the Opposite Parties in repudiating a mediclaim preferred by the Complainants and in discontinuing the health insurance coverage on the allegation of suppression/non-disclosure of pre-existing disease.
Genesis
The dispute essentially concerns the legality and propriety of repudiation of a health insurance claim arising out of hospitalization of Complainant No.2 during subsistence of a mediclaim policy which had originally commenced with Max Bupa Health Insurance Co. Ltd. in the year 2011 and was subsequently ported to Religare Health Insurance Co. Ltd. (now Care Health Insurance Ltd.) in the year 2017.
The insurer repudiated the claim primarily on the ground that Complainant No.2 had allegedly failed to disclose the existence of hypertension while obtaining the policy from the Opposite Party insurer and that such suppression constituted breach of the doctrine of utmost good faith governing insurance contracts.
Brief Facts
The materials on record disclose that the Complainants had initially obtained a health insurance policy from Max Bupa Health Insurance Co. Ltd. in the year 2011. The said policy was renewed continuously from year to year.
In 2017, the Complainants opted for portability of the policy to Religare Health Insurance Co. Ltd., whereupon Policy No.11617154 was issued covering the period from 06.10.2017 to 05.10.2020 on payment of a one-time premium of Rs.1,07,578/-.
On 12.02.2018, Complainant No.2 developed serious neurological symptoms including decreased sensation over right upper limb, deviation of angle of mouth, slurring of speech, vomiting and difficulty in swallowing and was admitted to the Institute of Neurosciences, Kolkata. She remained admitted till 20.02.2018 and incurred medical expenses amounting to Rs.1,49,148/-.
During hospitalization, the Complainants sought cashless authorization from the Opposite Party insurer. The request was denied on 15.02.2018 on the ground of “non-disclosure of material fact/pre-existing ailment at the time of proposal”. Subsequently, reimbursement claim bearing No.90529376 dated 21.02.2018 was lodged. The same was repudiated by letter dated 12.03.2018 alleging non-disclosure of hypertension at the inception of the policy.
Aggrieved thereby, the Complainants approached the Insurance Ombudsman and also addressed representations to the insurer but without any effective relief, resulting in institution of the present complaint.
During pendency of the proceeding, the name of the insurer changed from Religare Health Insurance Co. Ltd. to Care Health Insurance Ltd., and the amended cause title was accordingly accepted by this Commission vide Order No.17 dated 18.12.2024.
Submissions of the Complainants
The Complainants contend that repudiation of the claim is wholly arbitrary, contrary to the records and violative of the IRDA framework governing portability of health insurance policies.
According to the Complainants, the policy had remained continuously operative since 2011 and had merely been ported from one insurer to another. It is specifically contended that in the previous policy issued by Max Bupa Health Insurance Co. Ltd. bearing No.30595006201600 (having validity from 19.10.2016 ton 18.10.2017), hypertension in respect of Complainant No.2 had already been recorded as a pre-existing disease. The Complainants have also relied upon a copy of a purported portability portal extract indicating transfer of medical history from the previous insurer.
It is argued that once the earlier insurer had already recorded hypertension as a pre-existing disease and continuity benefits had been transferred upon portability, repudiation on the ground of non-disclosure became legally impermissible.
The Complainants
