Order Name: National Insurance Co. Ltd Vs. Reena Sharda
Case No.: R.P. No. 1197/2018
The National Consumer Disputes Redressal Commission (NCDRC), under the leadership of Dr. Inder Jit Singh, recently ruled against National Insurance Company, holding it responsible for a deficiency in service. The commission emphasized that an insurer cannot use the exclusion clause of a policy to reject a claim if the reason for rejection is not clearly specified.
Case Background
The complaint originated from the policyholder’s daughter-in-law, who had purchased a medi-claim insurance policy covering critical diseases from National Insurance. When the complainant faced health issues and underwent medical treatments including angioplasty, he incurred significant expenses amounting to Rs.3,26,014. However, the insurer only approved Rs.45,508 of the total claim, citing policy terms for the rejection of the remaining amount. Dissatisfied with this decision, the complainant approached the District Forum, which dismissed the complaint. Subsequently, he appealed to the State Commission of Rajasthan, which overturned the District Forum’s decision. This led the insurer to file a revision petition before the National Commission.
Insurer’s Argument
National Insurance contended that the State Commission acted beyond its jurisdiction and made an illegal decision. The insurer argued that the policy terms were clear, and only reimbursable medical expenses were paid. They emphasized that angioplasty expenses were explicitly excluded under the critical illness section of the policy. Citing Supreme Court cases, they argued that insurance policies are governed strictly by their terms, without exceptions based on equity. They specifically referred to the cases of Deokar Exports (P) Ltd. v. New India Assurance Co. Ltd. and United India Insurance Co. Ltd. v. Manubhai Dharmasinhbhai Gajera & Ors., which stressed the enforcement of exclusion clauses in medi-claim policies.
National Commission’s Observations
The National Commission discovered discrepancies in the policy documents provided by the insurer and the complainant. The insurer had submitted incorrect documents, prompting the Commission to order an investigation and appropriate action against the officials responsible. Upon examining the correct policy document, which the insurer accepted as accurate, the Commission evaluated the merits of the case. The complainant had sought 90% of the total claim amount, amounting to Rs.2,80,506. The Commission referred to the case of M/s Galada Power and Telecommunications Ltd. v. United India Insurance Co. Ltd. & Anr., where it was held that insurers cannot use exclusion clauses as a defense if they did not specify the reason for claim rejection.
Conclusion
The National Commission upheld the State Commission’s order and dismissed the revision petition filed by the insurer.
Takeaway
This ruling highlights the importance of transparency and accuracy in insurance policies. Insurers must clearly specify reasons for claim rejection, and any discrepancy in policy documents can lead to significant consequences. Policyholders should ensure they understand their policy terms and seek redressal if they believe their claims are unjustly denied.
