Consumer court directs ICICI Lombard to pay ₹4.5 lakh to man whose claim was rejected

The insurance firm repudiated the claim on the ground that the insured person has suppressed information about diabetes mellitus

Dakshina Kannada District Consumer Disputes Redressal Commission has directed ICICI Lombard to pay ₹4.5 lakh with 8% interest to 55-year-old Krishna Kumar Rai, a resident of Bejai, overruling the contention of the insurance firm to repudiate a claim on the ground that the insured person has suppressed information about diabetes mellitus.

In the complaint filed before the district commission, Dr. Rai stated that he was afflicted with diabetes mellitus since February 19, 1996, and has been undergoing treatment in a private nursing home. He had taken health insurance from ICICI Lombard in February 2009, which has been regularly renewed and the same was in force till February 2021.

He was admitted to A.J. Hospital and Research Centre on May 11, 2019 following pulmonary mucormycosis and diabetes mellitus. He was discharged on June 10, 2016.

He submitted a claim of ₹7.52 lakh to ICICI Lombard, which repudiated the claim on the ground that Dr. Rai has not mentioned diabetes mellitus. The insurance firm cancelled the insurance policy, and did not refund the premium amount of ₹27,376, he claimed.

In their reply to the commission, Shruti Shetty, the legal manager of the ICICI Lombard, said, while going through the claim documents, it was revealed that Dr. Rai had a past history of diabetes mellitus. As he had suppressed this fact with the insurer, he had violated clause 1 (suppression of material facts) of part 3 of the terms and conditions of the policy. Hence, the firm repudiated the claim.

The commission, comprising president K. Prakasha and members P.V. Lingaraju and H.G. Sharadamma, in their judgment dated January 23, noted that the health insurance policy of Dr. Rai was running from February 2009 to February 2021. The claim of ₹7.52 lakh was submitted 10 years after taking the policy. “Hence, there is no question of suppression of material facts or misstatement in the proposal form,” the commission noted.

Finding that the amount claimed being more than the sum assured under the policy, the commission directed ICICI Lombard to hand over to Dr. Rai ₹4.5 lakh with 8% interest from July 16, 2019, when the claim was repudiated, till the date of realisation. The insurance firm was also told to pay ₹20,000 as compensation for mental agony and ₹10,000 towards litigation expenses.