Why this PwC employee won Rs 2 crore battle against Bajaj Allianz after near-fatal US medical emergency

“The burden to establish the applicability of exclusion clause squarely rests upon the OP (opposing party), which has not been discharged,” the consumer commission said on May 27, holding that the repudiation was “arbitrary, unjustified and contrary to the medical material on record.”

A bench comprising AVM J Rajendra (NCDRC presiding member) and Anoop Kumar Mendiratta (member) found no merit in the insurer’s arguments.

Employee hospitalised days after reaching US

• According to the complaint, the man had been employed with PwC since 2011 and was deputed to Dallas, Texas, for a three-month official assignment in July 2017.
• PwC had obtained an Overseas Travel Corporate Insurance Policy from Bajaj Allianz covering overseas medical expenses up to USD 500,000 for its employees.
• The employee travelled to the US on July 10, 2017. However, while completing joining formalities on July 13, he developed symptoms of illness.
• The next day, the PwC employee’s condition deteriorated rapidly and he was admitted to Baylor University Medical Centre in Dallas.
• Doctors diagnosed him with acute pancreatitis along with severe complications, including diabetic ketoacidosis, acute respiratory failure and cardiac arrest.
• He remained hospitalised for nearly 55 days, including a prolonged ICU stay, before continuing rehabilitation till September 2017.
• Medical expenses eventually touched USD 328,038, equivalent to more than Rs 2 crore at the prevailing exchange rate.

Bajaj Allianz rejected claim

The complaint stated that Bajaj Allianz was informed within 24 hours of the hospitalisation and was repeatedly requested to activate cashless treatment under the insurance policy.

Initially, the insurer acknowledged the claim, sought medical records and communicated regarding the substantial expenses being incurred. However, on August 17, 2017, it repudiated the insurance claim on the ground that the illness arose from a pre-existing diabetic condition excluded under the policy.

The rejection came while the employee was still undergoing treatment in a foreign country. Unable to secure support from the insurer, PwC arranged payment through International SOS Assistance Inc, which cleared the hospital dues and related treatment expenses. Records showed that PwC eventually paid over USD 4.11 lakh, including service charges, in January 2018.

The employee and PwC then approached the consumer commission alleging wrongful repudiation, deficiency in service and mental harassment caused by the denial of emergency insurance support.

Insurer claimed diabetes was pre-existing

Defending its decision, Bajaj Allianz argued that the employee had uncontrolled diabetes mellitus before travelling abroad and that his complications were directly linked to a pre-existing condition.

The insurer relied heavily on HbA1c readings of 13.9 to contend that he had persistently high blood sugar levels for months prior to travelling. It maintained that the overseas travel insurance policy expressly excluded coverage for pre-existing diseases and related complications.

The insurer further argued that since PwC had already paid the treatment expenses, the complainant himself had suffered no financial loss and therefore could not seek reimbursement under an indemnity contract. Bajaj Allianz also contended that the dispute involved complex factual questions that should be decided by a civil court rather than consumer proceedings.

Commission rejects defence

• The NCDRC, however, found no merit in the insurer’s arguments.
• The bench noted that Bajaj Allianz failed to place on record any prior prescription, diagnostic report, hospitalisation record or evidence showing that the employee had ever been diagnosed or treated for diabetes before the policy came into force.
• On the contrary, medical reports from Baylor University Medical Centre and even documents obtained by the insurer itself recorded that there was “no previous history of diabetes”.
• Mere elevated HbA1c level of 13.9, without “any antecedent medical evidence”, cannot conclusively establish pre-existing disease, the commission held.
• The bench also rejected the allegation that the employee had suppressed material facts while taking insurance, saying suppression presupposes prior knowledge of the disease – something the insurer failed to establish.
• The commission found that Bajaj Allianz arbitrarily denied the overseas travel insurance claim by alleging that the employee was already suffering from uncontrolled diabetes before travelling abroad, even though medical records did not establish any prior diagnosis or treatment history.
• The insurer’s refusal to extend cashless treatment support during the medical emergency forced PwC to arrange funds running into crores of rupees for treatment in the US.

‘Employer’s intervention does not end liability’

• The commission strongly criticised the insurer’s attempt to avoid insurance liability merely because PwC stepped in to rescue its employee during the emergency.
• According to the bench, the employer, PwC had intervened only because the insurer failed to honour its contractual obligations and refused to provide cashless support during a grave medical crisis abroad.
• Just because the employer intervened to ameliorate the employee’s hapless situation in a foreign country does not extinguish the complainant’s rights under the policy, the commission observed.
• The commission further held that the employee qualified as a “consumer” under the Consumer Protection Act because a separate insurance schedule had specifically been issued in his name for the overseas assignment.

Final order

Allowing the complaint partly, the NCDRC directed Bajaj Allianz to pay the rupee equivalent of USD 328,188 to PwC along with 7 per cent simple interest from January 15, 2018 till the date of payment.

At 2018 exchange rates, the amount translates to over Rs 2 crore. With accumulated interest for more than eight years, the total payout is expected to rise significantly higher.

The commission also awarded Rs 50,000 towards litigation costs and warned that if the payment is delayed beyond 30 days, the insurer would be liable to pay interest at 10 per cent for the delayed period.