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In a significant ruling, the Ernakulam Consumer Forum in Kerala has held a general insurance company and a bank accountable for facilitating insurance coverage. Consequently, they bore responsibility for denying a medical insurance claim to a customer. The commission directed them to pay a compensation of ₹2.23 lakh.
The commission, comprising president D.B. Binu and members V. Ramachandran and Sreevidhia T.N., issued the verdict on a petition filed by a husband-wife duo from Thevara, Milton and Eva Milton, against Cholamandalam MS General Insurance Company and the Union Bank of India.
In response to a petition filed by a husband-wife duo from Thevara, Milton and Eva Milton, against Cholamandalam MS General Insurance Company and the Union Bank of India, the commission, comprising president D.B. Binu and members V. Ramachandran and Sreevidhia T.N., issued the verdict.
Consequently, the complainants alleged that the insurance company denied their claim, leading them to cover medical expenses amounting to ₹1.49 lakh out of their own pocket after Mr. Milton underwent coronary angioplasty on August 22, 2020.
Additionally, the insurance company argued that it did not cover the treatment because it related to a pre-existing condition (diabetes mellitus), which the policy only covers two years from its commencement, whereas the policy was only five months old at the time of treatment.
However, the bank defended itself from any responsibility, asserting that it had no involvement in the terms and conditions of the insurance policies and bore no financial liability in settling claims. Furthermore, it supported the insurance company’s reasoning for denying the claim and argued that insurance services were simply value-added services offered to customers at subsidized rates.
Consumer Forum Ruling
In ruling while deciding the matter, the commission cited a Supreme Court ruling that diabetes mellitus, while a risk factor for cardiac ailments, does not automatically predispose every individual with the condition to heart disease.
The commission observed, “This precedent underscores the necessity for insurers to assess claims based on the specific circumstances of each case rather than applying broad exclusionary principles.”
It is also observed that the denial of cashless treatment and the subsequent rejection of the claim appeared to be based more on policy technicalities than on a fair assessment of the complainant’s medical emergency and the disclosures made at the time of policy purchase.
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