In a significant ruling that underscores consumer rights in health insurance, a Mumbai district consumer commission has directed Niva Bupa Health Insurance Company Limited to reimburse Rs 66.50 lakh to a Juhu resident for an overseas cancer claim that was wrongfully denied.
Unjustified Policy Cancellation Exposed
The Mumbai Suburban District Consumer Disputes Redressal Commission found Niva Bupa guilty of deficiency in service and unfair trade practice for cancelling the policy based on alleged non-disclosure of asthma, which had no medical connection to the claimant's colorectal cancer diagnosis. The commission emphasized that the insurance company failed to prove that asthma had any nexus to the cancer treatment or that its disclosure would have affected the decision to provide overseas coverage.
The case dates back to 2017 when complainant Alok Bector purchased the comprehensive "Heartbeat-Family First Platinum Policy" that offered worldwide coverage, including the United States. In August 2018, during the policy's active period, Bector was diagnosed with colo-rectal cancer and sought advanced treatment at the Memorial Sloan Kettering Cancer Research Centre in the United States.
Insurance Company's Flawed Defense
Following Bector's cancer diagnosis, Niva Bupa not only repudiated his claim but also attempted to cancel his policy citing failure to disclose his asthma history. The commission noted that the insurer's arbitrary cancellation of the policy and subsequent refusal to allow cashless pre-authorization forced Bector to incur substantial medical expenses overseas during active cancer treatment, causing both financial loss and mental trauma.
The commission rejected the insurance company's procedural defense that overseas claims for specified illnesses must be processed via cashless facility rather than reimbursement. It observed that the insurer's own wrongful act of cancelling the policy in December 2019—even before Bector could obtain pre-authorization—made the cashless option impossible to pursue.
Legal Precedent and Consumer Protection
Advocates Rohit Lalwani and Sajal Khan, representing the complainant, highlighted the importance of the ruling. "The Commission's order underscores the importance of consistent policy enforcement. Once a cancellation of the policy is declared unjustified, the insurer cannot rely on resulting procedural gaps to deny coverage," they stated.
The commission also addressed jurisdiction concerns, clarifying that under the Consumer Protection Act, jurisdiction is determined by the value of the consideration paid—in this case, the cumulative premium amount of less than Rs 50 lakh, not the claim amount which exceeded Rs 1 crore.
In addition to the Rs 66.50 lakh reimbursement, Niva Bupa was ordered to pay Rs 40,000 as compensation for the hardship caused. The commission noted that the wrongful cancellation had been previously settled by the Ombudsman in March 2020, but the company continued to deny the subsequent claim amounting to over Rs 88 lakh for overseas cancer treatment.
