Consumer Commission Slaps Penalty on SBI General Insurance in Medical Claim Case
The District Consumer Grievances Redressal Commission in Dharwad has delivered a significant ruling against SBI General Insurance Company, ordering substantial penalties and compensation in a medical insurance claim dispute. The case was filed by Mohan Mudgal, an engineer residing in Vidyanagar, Hubballi, highlighting critical issues in health insurance claim settlements.
Background of the Medical Insurance Dispute
According to the detailed complaint, Mohan Mudgal had purchased a comprehensive health insurance policy from SBI General Insurance Company. During the active policy period, he developed severe and debilitating knee pain that required immediate medical attention. Initially, he consulted with orthopaedic surgeon Dr. Vivek Patil for diagnosis and preliminary treatment.
Following medical consultations and family advice, Mudgal decided to seek specialized treatment in Mumbai under the care of renowned specialist Dr. Sharmila Tulpule. The treatment culminated in knee replacement surgery, a medically necessary procedure for his condition. The total medical expenses for this treatment amounted to approximately Rs 3.2 lakh, a significant financial burden for the policyholder.
Insurance Claim Rejection and Legal Action
After his discharge and recovery, Mudgal diligently submitted all required medical records, bills, and documentation to SBI General Insurance, seeking legitimate reimbursement as per his policy terms. However, the insurance company unexpectedly rejected his claim, asserting that the specific treatment he underwent was not covered under the policy's terms and conditions.
Feeling aggrieved by what he perceived as a clear deficiency in service, Mudgal filed a formal complaint before the Dharwad District Consumer Commission on September 26, 2024. He invoked provisions of the Consumer Protection Act, arguing that the insurer had failed to honor its contractual obligations despite valid medical necessity during the policy period.
Commission's Detailed Observations and Ruling
After conducting thorough hearings and examining all evidence, the Commission bench comprising President Eshappa Bhute and Member Vishalakshi A. Bolashetty made several crucial observations. The Commission noted that Mudgal had purchased the health insurance policy specifically for medical security and that his treatment occurred entirely within the valid policy period.
The Commission particularly emphasized that the insurance company failed to produce any substantial evidence to support their denial. Specifically, the insurer could not demonstrate policy exclusions, pre-existing conditions, or lifestyle-related exclusions that would justify rejecting the claim. The Commission also referenced a precedent-setting ruling from the Punjab State Consumer Commission, which established that allopathic treatments are indeed covered under standard health insurance policies.
Substantial Compensation and Penalties Ordered
Based on these findings, the Commission ruled unequivocally in favor of the complainant, declaring him eligible to receive the full insurance claim amount. The Commission issued specific directives to SBI General Insurance Company:
- Payment of Rs 3.2 lakh toward the actual medical expenses incurred by Mudgal
- Additional interest at 10% per annum from the date of filing until full settlement
- Compensation of Rs 50,000 for the mental agony and inconvenience caused to the policyholder
- Litigation expenses of Rs 10,000 to cover the cost of pursuing legal recourse
This ruling serves as an important reminder to insurance companies about their obligations toward policyholders and reinforces consumer rights in healthcare financing disputes. The total financial liability for SBI General Insurance, including principal, interest, compensation, and expenses, exceeds Rs 3.8 lakh, setting a significant precedent for similar cases in the region.
