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Star Health Liable for for Wrongfully Limiting Reimbursement: Belagavi Commission
In a significant ruling on consumer rights in health insurance, the has held guilty of for arbitrarily restricting a mediclaim reimbursement. The Commission directed the insurer to pay the balance claim amount of ₹2,28,308 along with 12% interest per annum from the date of discharge, besides compensation for mental agony and litigation costs.
A Policy Renewed, a Claim Denied
The case stemmed from the hospitalization of late Devdutt Koppikar , who was covered under a "Stars Senior Citizen Policy" originally issued in 2019 and subsequently renewed for the period to . During renewal, the was enhanced from ₹3 lakh to ₹5 lakh , with a corresponding increase in premium from ₹15,222 to ₹21,240.
On , Koppikar suffered a cerebrovascular accident (CVA) and was admitted to , where he remained in the IPD until . Although the complainants – his widow and daughters – sought a , the insurer deferred it, promising reimbursement upon submission of bills. After discharge, the family submitted total medical expenses of ₹4,28,308 , but the insurer settled only ₹2,00,000 , citing a for CVA treatment.
The Insurer’s Defense: for Cerebrovascular Treatment
Star Health contended that the policy contained a limiting the maximum payable amount for cerebrovascular treatment to ₹2,00,000 per policy period, which had already been exhausted. The insurer argued that the claim was settled strictly in accordance with the contractual terms, and no further amount was payable.
However, the Commission examined the documents produced by the insurer, including the Bills Assessment Sheet (Ex R1) and Customer Information Sheet (Ex R2) , and found no clear stipulation establishing the alleged in the renewed policy.
Commission’s Scrutiny: Where is the Clause?
The Commission noted that the
Customer Information Sheet (Ex R2)
contained no relevant portion regarding the
.
"This Commission could not lay its hand to any of the stipulation contained in the policy issued by the OP-Insurance Company,"
the bench observed, emphasizing that the insurer had not produced any evidence that the restrictive terms were part of the operative contract.
Crucially, the Commission found that the policy had been
renewed and the enhanced
upon payment of higher premiums. It noted that the insurer failed to clarify whether the alleged
from the earlier policy continued to govern the renewed contract.
"This sub limit, if any said to have been incorporated in the policy gets no significance after the policy being renewed,"
the Commission stated.
"Unreasonable and Against Policy Conditions"
The Commission unequivocally rejected the insurer's reliance on an unproven
.
"The contention of the OP-Insurance Company is against the stipulation of the contract,"
the order reads. It held that restricting the claim to ₹2,00,000 was unreasonable and contrary to the coverage for which the complainants had paid higher premiums.
As a result, the Commission concluded that the insurer was guilty of and , as the family was forced to bear the remaining expenses despite having a valid insurance policy.
The Verdict: Full Reimbursement with Interest and Compensation
Partly allowing the complaint, the Commission directed Star Health to:
- Pay the balance claim amount of Rs. 2,28,308 with 12% interest per annum from the date of discharge () until realization.
- Pay Rs. 10,000 as compensation for mental agony and inconvenience.
- Pay Rs. 5,000 towards litigation costs.
The entire amount must be paid within 60 days from the date of the order, failing which the aggregate amount will attract an additional interest of 6% per annum from the date of the order until realization.
The decision reinforces the principle that insurers cannot deny legitimate claims on the basis of policy terms they fail to prove form part of the contract, particularly after renewal.
