In a significant consumer victory, the Punjab Consumer Disputes Redressal Commission has directed Star Health and Allied Insurance Company Limited, Chennai, to compensate Ludhiana resident Kulwinder Singh with Rs 6.25 lakh, along with 7% interest from the date his claim was rejected. The insurance company has also been ordered to pay an additional Rs 40,000 as compensation and Rs 11,000 in litigation expenses.
The dispute arose when Star Health rejected Singh’s insurance claim, citing non-disclosure of a pre-existing medical condition. Singh had previously received treatment for joint pain in Gurugram in 2017, but he purchased the health policy in 2015 without mentioning this condition. The insurance company argued that this omission amounted to concealment of medical history.
However, the commission, headed by President Justice Daya Chaudhary and supported by members Simarjot Kaur and Vishav Kant Garg, disagreed with the company’s stance. The commission upheld the earlier decision of the Ludhiana Consumer Commission, emphasizing that it was the responsibility of the insurer to conduct a thorough medical examination of policy buyers, rather than solely relying on customer disclosures.
The ruling also suggested that the Insurance Regulatory and Development Authority of India (IRDAI) issue an advisory, recommending mandatory medical examinations for all individuals purchasing health policies. Currently, only buyers above 50 years of age are required to undergo medical tests before obtaining health insurance.
Key Points:
- Star Health Insurance was ordered to pay Rs 6.25 lakh, with 7% interest, for rejecting a claim.
- Additional Rs 40,000 in compensation and Rs 11,000 in litigation costs were also awarded to the Ludhiana resident.
- The commission criticized the company for not conducting a medical examination and suggested a review of current policy issuance procedures.
This case marks a pivotal moment for consumer rights in health insurance, with potential long-term implications for policyholders and the insurance industry.
