The Consumer Forum found that Ms. Shetty had no knowledge about the disease prior to November 3, 2008.

A city consumer court has held that an insurance company cannot take advantage of the exclusion clause of pre-existing disease and repudiate a claim.

The court also said: “Only on the basis of assumption and presumption, a claim under the policy cannot be repudiated.”

The 1st Additional Bangalore District Consumer Disputes Redressal Forum held this in the complaint filed by Lalita N. Shetty against Star Health and Allied Insurance Company.

Ms. Shetty took Star Senior Citizens Red Carpet Insurance policy for the period September 12, 2008 to September 11, 2009. Within two months of the policy taking effect, Ms. Shetty developed abdominal pain and had vomiting and fever. She was admitted to a hospital on November 8 and found to be having a cancerous growth. She was operated upon and discharged on November 19. She incurred expenses of Rs.1,13,352. She applied for reimbursement of the expenses.

The company repudiated the claim on February 19. It contended that Ms. Shetty was suffering from the said disease prior to the policy taking effect. It was argued that the medical report of Ms. Shetty clearly revealed that she would have got the symptoms in the past 12 months for which treatment would have been given. The company said this showed a pre-existing disease and such claims were under the exclusion clause of the policy.

Not aware

The Consumer Forum found that Ms. Shetty had no knowledge about the disease prior to November 3, 2008. The company had repudiated the claim based on assumption about pre-existing disease. “Only on the basis of assumption and presumption a claim under the policy cannot be repudiated,” the Forum noted.

The Forum relied on the ruling of the National Consumer Disputes Rederssal Commission (2008 CTJ 347) which said that most of people were totally unaware of the symptoms of the disease they were suffering. Hence insurance companies could not be allowed to take advantage of exclusion clause of pre-existing disease in a mediclaim policy.

Another ruling of the National Commission (2008 CTJ 699) stated that repudiation of insurance claims on assumption was not sustainable under law.

President of the Forum H.M. Bajentri and member C.V. Rajamma on August 7 directed the company to pay Rs.1 lakh with 6 per cent interest from the date of repudiation of the claim. It also asked the company to pay costs of Rs.2,000. The company had to comply with the direction within eight weeks.