18-year dispute: Why national consumer body ordered Oriental Insurance to pay 75-yr-old’s US medical claim

We find no reason to defer from the view taken by the state consumer commission, said the NCDRC bench. (Image enhanced using AI)

“The repudiation (rejection) rested on an incorrect assessment of the facts on record and therefore the claim was rightly allowed. The appeal has no merits and is accordingly dismissed,” the national consumer commission said on February 17.

NCDRC: No suppression, appeal has ‘no merits’

• What we find is that the letter of repudiation relies on the doctor’s notes.
• It is quite possible that the insurance company might have taken into account the information given by its own Dr Ashok Kunnure on November 13, 2008, which indicates the existence of the diseases from which the insured had suffered, but that in our opinion does not amount to any suppression or non-disclosure by the insured.
• Apart from the answer given to the question regarding any disease in 12 months preceding the first day of insurance, the insured had stated that he had undergone bypass surgery in 2003 and suffered from hypertension.

• The complainant has also disclosed that he had undergone bypass surgery in 2003 and had also been treated for ischemia in October, 2003.
• The medical history of a bypass surgery and the sufferance of ischemia as well as hypertension were all disclosed in the declaration form.
• The state commission was therefore justified in arriving at the conclusion drawn.
• We therefore find no reason to defer from the view taken by the state consumer commission.
• Any amount deposited either under the orders of this commission or otherwise shall be remitted to the SCDRC, Delhi for its release or otherwise in terms of the order and decree of the state commission dated July 2, 2012.

2008 US trip, medical emergency

• The case traces back to June 2008, when Narayan Chimandas Bhambhani, then aged 75, purchased an Overseas Travel Insurance Policy from Oriental Insurance for his trip to New Jersey.
• The policy was valid from June 9, 2008, to October 6, 2008.
• On August 2, 2008, during his stay in New Jersey, Bhambhani suffered an ischemic attack (transient ischemic attack/cerebrovascular accident) and was admitted to Bayshore Community Hospital.

• He was discharged on August 5, 2008 after treatment.
• The hospital’s discharge summary recorded a medical history that included coronary artery bypass graft surgery in 2003.
• The summary also mentioned coronary artery disease, myocardial infarction in 1988, hypertension and diabetes
• It also listed multiple medications, including telmisartan, aspirin, clopidogrel, fenofibrate, metformin and metoprolol.

Claim rejected over ‘non-disclosure’

• When Bhambhani sought indemnification under the travel insurance policy, the claim was repudiated on November 19, 2008.
• The insurer relied on doctors’ notes accompanying the claim papers, asserting that the insured had failed to disclose pre-existing medical conditions at the time of taking the policy.

• According to the repudiation letter, the medical panel opined that the stroke was a complication of “non-disclosed medical history” and thus not admissible under the policy terms.

What proposal form revealed

• However, during proceedings before the state commission, the proposal-cum-declaration form filled out on June 5, 2008 was produced on record.
• In that form, Bhambhani had expressly disclosed ischemic heart disease, bypass surgery in 2003, hypertension, hospitalisation in 2003 for bypass surgery and an ongoing treatment history.

• The form specifically recorded- “Ischemic Heart disease 1987, Bypass surgery 2003, Continuing,” along with the attending doctor’s details.
• The insurer’s argument hinged on the answer to one question relating to illnesses suffered in the 12 months preceding the policy, claiming it was incorrect.

State commission ruled in favour of insured

• The Delhi SCDRC, in its order dated July 2, 2012, rejected the insurer’s defence and allowed the complaint, holding that there was no material suppression.
• Oriental Insurance challenged this decision before the NCDRC in 2012.

Long road to relief

• The ruling effectively ends a legal battle that began in 2008 and stretched nearly 18 years.
• For Bhambhani, the decision marks the culmination of a prolonged fight to secure reimbursement for medical expenses incurred during a medical emergency abroad.

• The case also reinforces a settled principle in insurance law– when an insured has made clear disclosures in the proposal form, an insurer cannot later deny liability on vague or selectively interpreted grounds of non-disclosure.
• With the appeal dismissed, the NCDRC’s order sends a clear message that rejection of genuine claims must be based on concrete evidence of material suppression, not on strained readings of medical records.