Justices D Y Chandrachud and B V Nagarathna decided that an insurer cannot repudiate a claim by citing an existing medical condition, in the proposal form, after the policy has been issued.
According to the supreme court, an insurer cannot repudiate a claim by citing an existing medical condition, in the proposal form, after the policy has been issued. A bench consisting of Justice D Y Chandrachud and Justice B V Nagarathna also decided that it’s the duty of the proposer to disclose all information in his knowledge to the insurer beforehand. It is presumed that the proposer knows all facts and circumstances about the proposed insurance.
The court added that, while the proposer can only reveal what is in his knowledge, his duty is not confined to that, it can extend to more information, which he ought to know, in the ordinary course of business.
Recently, the bench added, “Once the policy has been issued after assessing the medical condition of the insured, the insurer cannot repudiate the claim by citing an existing medical condition, which was disclosed by the insured in the proposal form and which condition has led to a particular risk in respect of which the claim has been made by the insured.”
This came after the court was hearing an appeal from Manmohan Nanda against an order of the National Consumer Disputes Redressal Commission (NCDRC), which rejected his plea for seeking medical expenses in the United States. He bought an Overseas Mediclaim Business and Holiday Policy prior to his visit to the United States. He suffered a cardiac arrest after reaching the San Francisco Airport and was admitted. An angioplasty was performed on his and three stents were used inserted in his heart to remove the blockage.
“If the insured suffers a sudden sickness or ailment, which is not expressly excluded under the policy, a duty is cast on the insurer to indemnify the appellant for the expenses incurred thereunder,” the court said and Manmohan lost the hearing.