An insurance company cannot repudiate a medical claim over alleged non-disclosure of a pre-existing condition without concrete evidence that the insured was aware of the illness and deliberately concealed it, the Noida District Consumer Commission has ruled. Directing Star Health and Allied Insurance to settle a claim of ₹1.20 lakh with 6% annual interest and ₹5,000 in litigation costs, the commission held that a disease discovered or mentioned during hospital treatment cannot automatically serve as proof of intentional non-disclosure at the time of policy purchase.
Hospitalisation Followed by Rejection of Cashless Request
The dispute arose after Kamlesh Choudhary approached the consumer commission on March 27, 2023, seeking relief against Star Health and Allied Insurance as well as Punjab National Bank’s Greater Noida branch. Choudhary had secured a ₹5 lakh family health insurance policy in April 2022 through the bank branch. Roughly two months later, she suffered from acute vomiting and diarrhoea, leading to her admission at Kailash Hospital on June 8, 2022, where medical staff diagnosed a liver-related ailment.
When the hospital forwarded a bill of around ₹1.20 lakh to Star Health seeking cashless pre-authorisation, the insurer declined the request. The refusal compelled Choudhary to settle the hospital dues directly. She later approached the consumer forum, contending that she had never experienced these ailments or undergone medical treatment for them prior to buying the policy, and that the health complications came to light only upon her hospital admission.
Insurer Points to Medical History Mentioned in Records
In its response before the commission, Star Health argued that the claimant had failed to declare a medical history of type 2 diabetes mellitus when obtaining the cover, highlighting that the claim was lodged within two months of policy inception. While admitting that the policy was valid and provided ₹5 lakh coverage for the family, the insurer contended that the submitted treatment papers were insufficient to approve the settlement.
The insurer relied on the hospital discharge summary, which noted acute viral enteritis along with thrombocytopenia, an abnormally low platelet count. Star Health also highlighted an ultrasound report indicating chronic kidney disease, arguing that these underlying conditions warranted the repudiation of the claim. In contrast, Choudhary maintained that neither she nor the hospital possessed earlier treatment records for such ailments, making the insurer’s rejection unsubstantiated.
Commission Mandates Strict Proof of Intentional Concealment
Pronouncing the order on October 13, commission president Anil Kumar Pundir and member Anju Sharma ruled that the mere appearance of diabetes or another ailment in treatment summaries cannot substantiate deliberate concealment by the insured. The bench observed that insurers must place positive proof demonstrating prior knowledge and wilful non-disclosure, noting that arbitrarily rejecting a claim without adequate records constitutes a deficiency in service and an unfair trade practice.
The commission instructed Star Health to release ₹1.20 lakh with 6% interest calculated from March 2023, alongside ₹5,000 in legal expenses within 30 days, while dismissing the complaint against Punjab National Bank. The judgment confirms that insurers cannot evade statutory liabilities simply by citing diagnostic notations recorded during post-policy hospital care.
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