Once patient undergoes treatment, surgery based on doctor's advice, insurer cannot arbitrarily reject claim: Kerala HC
Kerala High Court
Ernakulam: The Kerala High Court bench recently ruled that once an insured person has undergone treatment or surgery based on the expert opinion of a doctor, the insurer cannot arbitrarily reject the claim.
According to the HC bench comprising Justice P.M. Manoj, denial of an insurance claim for medical treatment amounts to a violation of the right to life under Article 21 of the Constitution. It denies treatment and infringes upon a citizen's fundamental right to life and health.
"The right to medical treatment is a right identified under fundamental rights. In fact, once the insured has undergone treatment or a surgical procedure on the expert opinion of the concerned doctor, the insurer cannot deny the claim. Rejection of the claim for the expenses incurred for such treatment availed by the insured amounts to denial of treatment. ... Here, declining the claim in respect of the treatment undergone amounts to denial of treatment itself. Thereby, there is violation of the right to life provided under Article 21 of the Constitution of India," observed the HC bench.
These observations were made by the Court while considering the plea, where the petitioner's medical insurance claims under the LIC policy was rejected by the Life Insurance Corporation of India (LIC). Even though the petitioner paid premiums regularly since 2008, LIC limited his first claim to Rs 5,600 against an expenditure of Rs 60,093 and rejected a subsequent claim of Rs 1,80,000 on the ground of a "pre-existing illness".
While considering the matter, the HC bench referred to the Supreme Court's decisions in the case of Paschim Banga Khet Mazdoor Samithi v. State of West Bengal, Consumer Education and Research Centre v. Union of India, and State of Punjab v. Mohinder Singh Chawla and it reiterated that the right to medical treatment is an integral component of the right to life.
"Here, declining the claim in respect of the treatment undergone amounts to denial of treatment itself. Thereby, there is violation of the right to life provided under Article 21 of the Constitution of India," the HC bench noted.
The Court also observed that the insurers often take advantage of the insured's vulnerability during medical crises. In this regard, the bench cautioned that such conduct "defeats the very purpose of health insurance and erodes public trust".
"The object of life insurance is to provide security against unforeseen contingencies, which are defeated when claims are rejected for reasons neither substantial nor material. Insurance is a contract of utmost good faith, and the duty of fairness lies equally on the insurer, as contracts of adhesion policies must be construed in favour of the insured and repudiation for consequential inaccuracies or ambiguities cannot be justified," noted
“The object of life insurance is to provide security against unforeseen contingencies, which are defeated when claims are rejected for reasons neither substantial nor material. Insurance is a contract of utmost good faith, and the duty of fairness lies equally on the insurer, as contracts of adhesion policies must be construed in favour of the insured and repudiation for consequential inaccuracies or ambiguities cannot be justified.” the court observed.
Accordingly, the Court quashed LIC's rejection orders and directed the corporation to allow the claim of the petitioner without any delay, while underscoring that the policy remained valid until March 31, 2024.
The Court thus quashed LIC's rejection orders and directed the corporation to allow the petitioner's claim without delay, holding that the policy remained valid until March 31, 2024.
To view the order, click on the link below:
https://medicaldialogues.in/pdf_upload/kerala-hc-medical-insurance-303351.pdf
