14 August 2024 Insurance Claim/Money Rejected >> Insurance  

In a recent case of Tata AIG General Insurance Co. Ltd., Thr. Its Authorised Signatory, Mohammad Azhar Wasi, Mumbai v/s Insurance Ombudsman for Mumbai, Mumbai & Another, involving an insurance claim dispute, the court reviewed an award issued by the Insurance Ombudsman. The case centered on a petition filed by an insurance company challenging the Ombudsman’s decision. Below is a detailed account of the proceedings and the court’s ruling.

Background:

The petitioner, an insurance company, contested an award from the Insurance Ombudsman dated March 4, 2024. The dispute arose from a claim made by the insured, a customer who had purchased an Overseas Travel Insurance Policy. The policy, titled "Travel Guard Policy Silver without Sub Limits," was issued on December 15, 2022, and was valid from January 17, 2023, to May 16, 2023. The insured and his wife traveled to Europe on May 3, 2023. During their trip, the insured experienced symptoms of vertigo and sought medical attention from Dr. Giulio Bosco in Rome on May 8, 2023. Due to persistent symptoms, the insured decided to cut short his trip and returned to India on May 10, 2023. Upon return, he was admitted to Reliance Hospital in Mumbai from May 15 to May 22, 2023, where he was diagnosed with a Subacute Infarct in the right Costerolateral Medulla.

On June 10, 2023, the insured filed a claim with the insurance company for the expenses incurred at Reliance Hospital. However, the insurer denied the claim on June 20, 2023, citing the terms and conditions of the policy, which excluded coverage for medical expenses incurred in India.

Ombudsman’s Award:

The Insurance Ombudsman, upon receiving a complaint from the insured, directed the insurer to process the entire claim within 30 days of receiving the award, but did not specify the amount of compensation. The Ombudsman’s decision was based on the reasoning that since the insurer was willing to cover overseas medical expenses, it implied that treatment in India was a continuation of the overseas treatment, thus implicitly approving the claim.

Insurer’s Objections:

The insurer argued that the Ombudsman erred by not considering the policy terms, which explicitly excluded claims for medical expenses incurred in India. The insurer contended that the Ombudsman’s decision was flawed as it was based on an incorrect interpretation of the policy and the insurer’s willingness to cover overseas expenses.

Insured’s Position:

On the other hand, the insured’s counsel argued that the Ombudsman had merely directed the insurer to process the claim and not necessarily approve it. The counsel maintained that the insured was entitled to recover expenses due to the severe medical condition that forced him to return to India.

Court’s Ruling:

The court scrutinized the Ombudsman’s award and found several issues. It noted that the Ombudsman had not determined the amount of compensation as required by Rule 17 of the Ombudsman Rules 2017. Furthermore, the Ombudsman’s observations were deemed inconsistent with the insurance policy terms and lacked a proper basis for concluding that treatment in India was a continuation of treatment abroad. The court highlighted that the Ombudsman’s conclusion was based on an incorrect assumption that the insurer's readiness to cover overseas expenses implied approval for treatment in India. The court held that without a clear admission of liability from the insurer and without evidence linking the treatments, the Ombudsman’s decision could not be sustained.

Conclusion:

As a result, the court set aside the Ombudsman’s award and remanded the case back to the Ombudsman for a decision based on the correct interpretation of the policy terms and evidence presented. The Ombudsman was instructed to reconsider the case without being influenced by the court’s observations. This case underscores the importance of adhering to policy terms and ensuring that any claims made are substantiated with clear evidence linking treatments and expenses covered under insurance policies.

  Insurance Act, 1938