Ref.:ER/PR-07/newindia.2/dG

On a complaint filed by Consumer Education and Research Society (CERS), Ahmedabad, and Shaival A. Shah, the Consumer Disputes Redressal Forum, Ahmedabad City, has ordered New India Assurance Company to pay Shaival Rs. 44710 with 6 per cent interest from 23 April 2004 till realisation, Rs. 5000 for mental agony and Rs. 5000 toward cost.

Shaival’s father, Ajay V. Shah, and family had been holding a mediclaim policy with National Insurance Company from 18 January 1995 to 17 January 2001, having renewed it on time every year. On 1 August 2000, he transferred his group mediclaim policy to New India Assurance and renewed it regularly up to 31 July 2004.

Meanwhile, from 9 to 15 April and from 22 April to 1 May 2002 Shaival fell sick and remained hospitalised. When his father claimed reimbursement on his behalf, New India Assurance repudiated it on the grounds of ‘pre-existing disease’.

The company alleged ‘suppression of material facts of an earlier surgery and medical treatment taken by the insured’. It said that Shaival had been first medically examined on 30 December 1999 for repeated seizures that remained uncontrollable for more than a year and that he had been under treatment for epilepsy. His father had not provided the details of Shaival’s existing disease and it was a breach of good faith, the company argued.

A complaint on behalf of Shaival was submitted to the Insurance Ombudsman who held that the two policies (of National Insurance Company and New India Assurance) were different products and hence not eligible for continuity. The Ombudsman upheld New India Assurance Company’s decision treating its policy as a new one.

When CERS took up the complainant’s case in April 2005, New India repeated its earlier stand on repudiation.

The Forum observed that New India had submitted to it a medical certificate dated 7 May 2003 but not the mediclaim proposal form on which the company had relied. Nor did the company submit any documents/affidavit in support of its case which may prove that the complainant had suppressed the material fact in the proposal form. The Forum even maintained that New India Assurance had failed to prove that the complainant had epilepsy since 18 January 1995 since the policy had been continuously renewed without any break up to 31 July 2004 though the insurance company had been changed.

The question of changing the policy from National Insurance Company to New India Assurance Company and the latter treating the policy as a new policy does not arise, the Forum added.

Partly allowing the complaint, the Forum observed :”The complainants have proved their case by cogent evidence and established the deficiency in service on the part of the opposite party”.

The Forum ordered compliance with its order within 30 days. It also directed New India to pay Rs. 2000 to CERS toward cost.

Mr. U. M. Raval presided over the Forum with Mr. Bharatbhai H. Joshi as Member. Mr. John Pinto, advocate, pleaded for the complainants and Mr. Sandip C. Shah, advocate, for New India Assurance.

Date : 05/02/2007
Place : Ahmedabad

 

Pritee Shah
Senior Director - CERC