New Delhi: The Supreme Court has said that an insurer cannot quash a claim after issuance of a policy by referring to the existing medical condition stated by the insured in the proposal form. A bench of Justice DY Chandrachud and Justice BV Nagarathna also said that it is the duty of the proposer to disclose all material facts in the information to be given to the insurer. It is assumed that the proposer knows all the facts and circumstances relating to the insurance offered.
The Court held that though the proposer can disclose only what is known to him, the disclosure duty of the proposer is not limited to his actual knowledge, it also extends to those material facts which he should know in the ordinary course of business. In a recent judgment, the bench said, “Once the policy is issued after assessing the medical condition of the insured, the insurer cannot reject the claim on account of the existing medical condition, which the insured has stated in the proposal form.” Was.’
The court was hearing this matter
The top court was hearing an appeal filed by Manmohan Nanda against an order of the National Consumer Disputes Redressal Commission (NCDRC), which rejected his application to claim medical expenses incurred in the US.
Nanda had taken the ‘Overseas Mediclaim Business and Holiday Policy’ as he intended to travel to America. Upon arrival at the San Francisco airport, he suffered a heart attack and was admitted to a hospital, where he underwent angioplasty and three stents were inserted to clear the blockage in the heart vessels. Thereafter, the appellant sought the cost of treatment from the insurer which was later dismissed stating that the appellant had ‘hyperlipidemia’ and diabetes, which were not disclosed at the time of purchase of the insurance policy.
The NCDRC had concluded that since the complainant was taking a statin drug, which was not disclosed at the time of purchasing the Mediclaim policy, thus he failed to perform his duty of making full disclosure of his health status. The top court said that the dismissal of the claim by United India Insurance Company is illegal and not in accordance with the law.
It said that the purpose of purchasing a Mediclaim policy is to seek compensation in respect of sudden illness or disease which is not expected or imminent and which may also occur abroad. The bench said, “If the insured suffers from a sudden illness which is not expressly excluded under the policy, it becomes the duty of the insurer to compensate the appellant for the cost.”
