Case Note & Summary
The petitioner, Tata AIG General Insurance Co. Ltd., challenged an award dated 4 March 2024 passed by the Insurance Ombudsman for Mumbai. The respondent insured had purchased an Overseas Travel Insurance Policy (Travel Guard Policy Silver without Sub Limits) effective from 17 January 2023 to 16 May 2023. During a trip to Europe, the insured experienced vertigo symptoms and consulted a doctor in Rome on 8 May 2023. He aborted his trip and returned to India on 10 May 2023, where he was admitted to Reliance Hospital from 15 to 22 May 2023 and diagnosed with subacute infarct in the right posterolateral medulla. The insured claimed medical expenses incurred in India via email on 10 June 2023. The insurer denied the claim on 20 June 2023 citing policy terms and conditions. The insured then complained to the Insurance Ombudsman, who directed the insurer to process the entire claim within 30 days. The insurer filed a writ petition challenging the award. The High Court examined the Ombudsman's powers under the Ombudsman Rules 2017, particularly Rule 13 (duties and functions) and Rule 17 (award). The court noted that the Ombudsman's award did not determine the amount of compensation as required by Rule 17, but merely directed processing of the claim. The court also found that the Ombudsman's conclusion that the insurer's readiness to pay overseas medical expenses amounted to permission for treatment in India as continuation was erroneous, as there was no evidence that the treatment in India was for the same ailment. The court held that the Ombudsman ignored the policy terms and that an admission must be unequivocal. Consequently, the court set aside the award and remanded the proceedings back to the Ombudsman for fresh adjudication in accordance with law.
Headnote
A) Insurance Law - Insurance Ombudsman - Award - Rule 17 of Ombudsman Rules 2017 - The Ombudsman must determine the amount of compensation when the award is in favour of the complainant. In this case, the Ombudsman merely directed the insurer to process the entire claim without quantifying the compensation, rendering the award unsustainable (Paras 7-8, 12). B) Insurance Law - Policy Interpretation - Coverage for Medical Expenses in India - The Ombudsman erroneously concluded that the insurer's readiness to pay overseas medical expenses amounted to permission for treatment in India as continuation. There was no evidence that the treatment in India was for the same ailment diagnosed abroad (vertigo vs. subacute infarct). The award ignored the policy terms excluding coverage for expenses incurred in India (Paras 9-11). C) Insurance Law - Admission - Unequivocal Admission Required - The Ombudsman treated the insurer's statement of readiness to pay overseas expenses as an admission of liability for Indian expenses. However, an admission must be unequivocal and not require interpretation. Mere readiness to pay a part of the claim does not constitute admission for the entire claim (Para 10).
Issue of Consideration
Whether the Insurance Ombudsman's award directing the insurer to process the entire claim is sustainable when it failed to determine compensation as per Rule 17 and ignored policy terms excluding coverage for medical expenses incurred in India.
Final Decision
The impugned award of the Insurance Ombudsman dated 4 March 2024 is set aside. The proceedings are relegated back to the Ombudsman for fresh adjudication in accordance with law.
Law Points
- Insurance Ombudsman must determine compensation amount under Rule 17 of Ombudsman Rules 2017
- Ombudsman cannot base award on mere readiness to pay overseas expenses
- Treatment in India must be continuation of treatment abroad for coverage
- Admission must be unequivocal to base award on it
