The Supreme Court has held that an insurer cannot dismiss a claim by referring to the existing medical condition, which was disclosed by the insured in the proposal form, once the policy is issued.
A bench of Justices DY Chandrachud and BV Nagarathna also observed that it is the duty of the proposer to disclose to the insurer all material facts to the best of his knowledge.
It is assumed that the proposer knows all the facts and circumstances relating to the insurance offered.
While the proposer can disclose only what is known to him, the duty of disclosure of the proposer is not limited to his actual knowledge, it also extends to those material facts which, in the ordinary course of business, he should know, the court said. .
“Once the policy has been issued after assessing the medical condition of the insured, the insurer cannot reject the claim citing the existing medical condition, which the insured had stated in the proposal form and with respect to which condition a particular risk has occurred out of which the claim has been made by the insured,” the bench said in a recent judgment.
The top court was hearing an appeal filed by Manmohan Nanda against an order of the National Consumer Disputes Redressal Commission (NCDRC), dismissing his plea to claim for medical expenses in the United States.
Nanda had bought an overseas mediclaim business and holiday policy as he intended to travel to the US. Upon arrival at the San Francisco airport, he suffered a heart attack and was admitted to a hospital, where he underwent angioplasty and three stents were inserted to clear the blockage from the heart vessels.
Thereafter, the appellant claimed the cost of treatment from the insurer, which was later dismissed stating that the appellant had a history of hyperlipidemia and diabetes, which were not disclosed at the time of purchase of the insurance policy.
The NCDRC had concluded that since the complainant was under statin medication, which was not disclosed at the time of purchasing the mediclaim policy, he failed to perform his duty of making full disclosure of his health status.
The apex court held that the rebuttal of the policy by United India Insurance Company was illegal and not in accordance with law.
It said that the purpose of purchasing a mediclaim policy is to seek compensation in respect of sudden illness or disease which is not expected or imminent and which may occur abroad.
The bench said, “If the insured suffers from a sudden illness or disease which is not expressly excluded under the policy, a duty is imposed on the insurer to compensate the appellant for the expenses incurred under him.” ”
This story has been published without modification in text from a wire agency feed. Only the title has been changed.
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