Covid-19 Induced Cardiac Arrest Qualifies as Major Medical Illness for Insurance Claim: Madras HC

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Court underscored that as held by the Supreme Court of India, insurance companies should not be too technical and act arbitrarily while considering claim applications. 

The Madras High Court recently allowed a writ petition challenging the repudiation of an insurance claim for the death of the petitioner's husband, who died due to cardiac arrest during the second wave of COVID-19.

The bench of Justice GK Ilanthiraiyan refuted ICICI Lombard Insurance Company's  contention that there was no major medical illness or covered procedures under the policy. The company further claimed that insufficient investigations and lack of postmortem made the cause of death uncertain.

The bench noted that the petitioner's husband died due to cardiac arrest. "It is nothing but a heart attack," the bench held.

It highlighted that it was only due to COVID-19, there was no postmortem, and the deceased was not tested. "He died during Covid-19 pandemic situations and he suffered from severe cardiac arrest. It comes under the category of major medical illness," the bench ruled.

It underscored that as held by the Supreme Court of India, insurance companies should not be too technical and act arbitrarily while considering claim applications. 

"There is no doubt over the insurance policy, which was taken by the petitioner's husband. After issuance of insurance policy, they have received premium amount and therefore, the claim cannot be rejected on technical ground," the bench held. 

On the issue, Justice Ilanthiraiyan said that even though the law seems to be clear constituting a balance between the insuring party and the insured, in reality, there is no equality between the two as the insurer is the richest corporation and the individual is an ordinary individual.

In fact, in many cases, the individual has no legal knowledge about the ambiguous language used in the company's policy with an intention to waive them from the liability to pay the injured on happening of an agreed event, he pointed out. 

He emphasised that many times the companies willfully neglect reimbursing the insured, who instead of getting their amount from the company have to pay the courts for getting their rights enforced.

"The case on hand is the classic example of the same," the judge said. 

He stressed that even no one could say that such a cardiac arrest which causes death is not a "major medical illness".

The judge also dismissed the Insurance Company's argument that the petitioner could seek the remedy of Grievance Redressal procedure before the Insurance Ombudsman. Therefore, the writ petition was not maintainable. It was contended by the petitioner's counsel that though there was a remedy before the Ombudsman, the repudiation of the claim made by the petitioner was arbitrary and against the law. Therefore, the writ petition was very much maintainable before the high court under Article 226 of the Constitution of India.

Accordingly, court quashed that order passed by the Authorized Officer, the ICICI Lombard General Insurance Company Ltd rejecting the petitioner's claim. 

Court directed the company to allow the claim of the petitioner and disburse the insured amount.

The petitioner namely N.Lakshmi's husband obtained two loans from the DCB Bank to the tune of Rs.40,00,000 and Rs.31,00,000 respectively. Both the loans mandate the loan borrower life to be insured. Therefore, Lakshmi's husband insured his life to the tune of Rs.71,00,000 for the loan amount with ICICI Lombard General Insurance Company. However, he died on May 10, 2021 due to sudden cardiac arrest. Though no postmortem was done, the doctors at the Tiruverkadu Municipality assessed the cause of death "cardiac arrest”. 

Case Title: N.Lakshmi v. The Insurance Regulatory and Development Authority of India and Others