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Times of India
06 April 2010
By Anand Holla

Says diabetes and hypertension cannot be termed pre–existing diseases just to suit exclusion clause in a policy
Diabetes and hypertension could trigger or aggravate heart ailments, but by themselves are not fatal. This is what the Bandra consumer forum observed in a precedentsetting order, while asking an insurance company to foot a Rs 2 lakh bill of a diabetic man’s bypass surgery.

The forum recently dismissed the company’s defence of rejecting Ravindra Shetty’s claim, stating that diabetes can’t be called a ‘pre–existing disease’ even if it has caused or furthered heart complications, just to suit the exclusion clause of the insurance policy.

Shetty had taken a hospitalisation policy of New India Assurance for him and his wife for an assured sum of Rs 2 lakh. On June 25, 2005, following chest pain, Shetty was admitted to Nanavati Hospital where he was diagnosed as suffering from Tricuspid Valve Dysplasia and Diabetes Mellitus since five years and hypertension since four years.

Shetty then underwent bypass surgery at Bandra’s Asian Heart Institute which cost him Rs 2.92 lakh.

After discharge in July, Shetty sought claims, but was denied as per the ‘exclusion clause’ on the grounds that he was suffering from Diabetes Mellitus since five years and hypertension since four years. Aggrieved, Shetty moved the forum in August 2006.

The company, however, contended that as per policy terms, claims for all diseases or injuries which were pre–existing when the cover began, is not payable. The forum, in its order, noted that Shetty had himself informed his diabetes and hypertension history to Asian Heart Institute, and sought claims for his heart surgery, not for his diabetes or hypertension.

The forum held, “The company has not produced any material to show Shetty underwent any test before 2005, which revealed blockages in arteries. Thus, there is no material to attribute knowledge of cardiac disease. Diabetes Mellitus or hypertension could precipitate other diseases and could be causes leading to cardiac disease, but in themselves are not fatal.”

Finding the company guilty of deficiency in service, the forum held, “Merely because the complainant was suffering from Diabetes Mellitus and hypertension, it cannot be said he also had cardiac disease. Diabetes might have accelerated the process of the patient’s cardiac disease, but in any case, Diabetes Mellitus in itself cannot be pre–existing disease for the purpose of the exclusion clause of the policy. The company failed to understand or rather overlooked these aspects and wrongly repudiated Shetty’s claim.”

The forum asked the company to foot Shetty’s Rs 2 lakh bill with 9% interest, besides Rs 5,000 as legal costs.

Well–known consumer lawyer Uday Wavikar said this is a landmark judgment as it is the practice of insurance companies to reject mediclaims citing grounds of diabetes and blood pressure history.

“The Supreme Court held that insurance companies shouldn’t reject claims in a routine manner, noting that a material disease should be a direct cause to the disease for which the person is operated upon. The apex court ruled that to reject the consumer’s claim, he should have fraudulently suppressed his disease history and such an intention of fraud must be proved. So peripheral diseases like diabetes, blood pressure and stress cannot be given as excuses to refuse claims.”

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