Insurer can't reject claim over existing health condition: SC
One-liner: An insurer can't repudiate a claim citing an existing medical condition that was disclosed by the insured in the proposal form, once the policy has been issued, the Supreme Court has said.
Crux of the matter: A bench also said a proposer is under a duty to disclose to the insurer all material facts within his knowledge. The proposer is presumed to know all the facts concerning the proposed insurance, it added.
Need to know: While the proposer can only disclose what is known to him, his or her duty of disclosure is not confined to actual knowledge. It also extends to those material facts he or she ought to know, the court said.
- The SC was hearing an appeal filed by Manmohan Nanda against an order of the National Consumer Disputes Redressal Commission (NCDRC), rejecting his plea seeking a claim for medical expenses incurred in the US.
Driving the news: Nanda had bought an Overseas Mediclaim Business and Holiday Policy as he intended to travel to the US. On reaching the San Francisco airport, he suffered a heart attack and was admitted to a hospital, where angioplasty was performed.
- Subsequently, the appellant claimed the treatment expenses from the insurer, which was repudiated by the latter stating that he had a history of hyperlipidaemia and diabetes, which was not disclosed in the insurance form
- CDRC had concluded that since the complainant had been under statin medication, which was not disclosed while buying the policy, he failed to comply with his duty to make a complete disclosure of his health conditions
Bottom line: The apex court said the repudiation of the policy by the United India Insurance company was illegal and not in accordance with law.
- It said the object of buying a mediclaim policy is to seek indemnification in respect of a sudden illness or sickness that is not expected or imminent and that may occur overseas