CHENNAI: The North District Consumer Commission has directed Star Health Insurance to pay a total of Rs 66,711 after wrongfully rejecting a mediclaim. The insurer denied a Rs 36,711 claim, citing pre-existing diabetes, despite the waiting period having lapsed. Calling the rejection arbitrary, the commission ordered reimbursement with 9% interest, along with Rs 25,000 compensation for mental agony and Rs 5,000 towards litigation costs, reinforcing that insurers cannot unfairly deny valid claims.The case was filed by a 51-year-old Chennai resident who purchased a comprehensive health insurance policy with a sum insured of Rs 5 lakh on March 21, 2022, after fully disclosing her pre-existing condition of diabetes. She opted for a buy-back clause by paying a higher premium of Rs 21,028, which reduced the waiting period for pre-existing diseases to 12 months. The policy was renewed in subsequent years without any break.Between Jan 7 and 10, 2025, during the third year of the policy, she was hospitalised for urosepsis and acute pyelonephritis, along with hyperglycaemia. The hospital sought cashless approval, but the insurer rejected the claim on Jan 10, 2025, citing exclusion clauses related to pre-existing diseases, forcing her to pay Rs 36,711 out of pocket, noted the order.The commission observed that once the waiting period expired, the insurer could not indefinitely deny claims on the same grounds. It noted that the insurer failed to provide expert medical evidence to prove that the illness fell squarely within the exclusion clause.It also pointed out that the insurance intermediary failed to assist the policyholder and was set ex parte. Holding the rejection as a deficiency in service and unfair trade practice, the commission ruled in favour of the complainant, directing compensation for financial loss and mental distress.
