Insurer must prove pre-existing ailment before denying insurance claim

The complainant pointed out that the insurer had produced no medical record to substantiate the claim that diabetes was pre-existing

Navneet Surekha, working with PricewaterhouseCoopers Service Delivery Centre Kolkata, was deputed on assignment to Dallas, USA, for three months. The employer had obtained an “Overseas Travel Policy — Corporate” from Bajaj Allianz General Insurance, which covered medical expenses, evacuation and repatriation up to $500,000, and hospitalisation allowance of $25 per day, limited to a maximum of $150. 

Surekha travelled to Dallas on July 10, 2017. While completing the joining formalities on July 13, 2017, he suddenly developed symptoms of illness. On July 14, 2017, his condition deteriorated, and he was admitted to Baylor University Medical Centre. Doctors diagnosed him to be suffering from acute pancreatitis, along with multiple complications, including diabetic keto­acidosis, acute respiratory failure, and cardiac arrest. He remained hospitalised for about 55 days, including a prolonged stay in the 

Intensive Care Unit. He remained hospitalised till September 6, 2017. 

The insurer was immediately informed about the hospitalisation. After discharge, Surekha lodged a claim for the treatment, supported by the hospital bill of $328,038. The insurer sought medical records to process the claim. Even though Surekha had no prior history of diabetes, and doctors diagnosed the medical condition only during hospitalisation, the insurer repudiated the claim on the assumption that diabetes was pre-existing and the complications were consequential. 

Since the insurer repudiated the claim, the employer had to arrange finance through its global arrangements with International SOS Assistance, Inc., to clear the hospital dues. Surekha and the employer filed a joint complaint before the National Consumer Disputes Redressal Commission, alleging deficiency in service on the insurer’s part. 

The insurer raised various objections and even contended that the complaint was not maintainable as the hospital bill had been cleared. It argued that only a civil court could adjudicate the dispute. On merits, the insurer argued that the repudiation was bona fide on the basis of medical evaluation and expert review by its team. 

Surekha countered the insurer’s stand by pointing out that it had produced no antecedent medical record as evidence to substantiate that diabetes was pre-existing. He produced the opinion of Dr Tusharkumar N Desai, which stated that elevated glucose levels could be attributed to pancreatitis and associated metabolic disturbances without any prior history of diabetes. 

The National Commission, in its order of May 27, 2026, delivered by Jonnalagadda Rajendra, along with member Anoop Kumar Mendiratta, held the complaint to be maintainable as Surekha was a beneficiary of the insurance services available to him by virtue of his employer having paid the premium. It observed that Surekha had been left stranded in a foreign country due to the refusal to provide a cashless facility or settle the claim, and the insurance company could not absolve itself of the liability to make payment merely because the employer had come to the rescue to clear the hospital bill. 

The Commission observed that the complaint did not involve any complicated questions of fact that required adjudication by a civil court. It held the complaint to be maintainable for deficiency in service and ordered the insurer to reimburse the medical expenses in Indian rupees according to the exchange rate prevailing on January 15, 2018, along with 7 per cent interest. In case of delay in compliance beyond 30 days, interest at 10 per cent would be payable. Additionally, ₹50,000 was awarded as litigation costs.

The writer is a consumer activist