Mumbai: Observing that a pre-term baby was also a newborn, the Bombay high court on Wednesday directed an insurance company to pay Rs 11 lakh along with 9 per cent interest towards medical expenses incurred by a Jogeshwari resident for the treatment of her premature twins in 2018.
A division bench of Justices Gautam Patel and Neela Gokhale has also directed the New India Assurance Company (NIAC) to pay an additional sum of Rs 5 lakh to the woman as costs of litigation for its “defiance in obeying the directives of its regulator”. The entire amount has to be paid within four weeks.
“The respondent (NIAC) cannot be permitted to play fast and loose with the faith reposed by the insured, and that too, supported by regular renewals and payments of premium, by attempting to interpret clauses initspoliciescontrary to their true spirit and only with a view to avoid honouring claims,” observed the bench.
The HC allowed a petition by Rita Joshi and quashed a communication issued by the NIAC rejecting her claim.
Joshi had delivered twins in Sep 2018 after undergoing an emergency Caesarean section
Joshi had two policies worth Rs 20 lakh since 2007, which she had been renewing periodically. In September 2018, she delivered twin boys at 30 weeks’ gestation, after undergoing an emergency Caesarean section.The babies were admitted to the NICU for life-saving treatment.
The coverage for the newborns “for any illness or injury” was introduced in the same year they were born and offered without additional premium. However, the insurance company repudiated her claim of Rs 11 lakh, saying the policy did not cover premature babies.
Joshi then approached the HC. Her advocate Ashok Shetty argued that the regulations of the Insurance Regulatory and Development Authority of India (IRDAI) were binding on the insurer. These have defined ‘newborn baby’ to mean a baby born during the policy period and up to 90 days in age. The IRDAI’s October 12, 2022 circular clearly states that all insurance products covering newborn/ unborn must comply with the provisions, without any deviation.
The insurer contended that three doctors had opined that the twins had complications due to their premature birth and these complications would not usually occur in a full-term baby.
Bench rejected NIAC's arguments
The bench rejected its arguments that there was a distinction between expenses related to illness or injury of a newborn and expenses relating to premature babies. “The further distinction between a ‘newborn’ and a ‘premature baby’ or a baby born ‘pre-term’ is also baseless, as a newborn baby can be one that is born ‘full-term’ or ‘pre-term’. A fullterm baby does not become ‘more newer’ any more than a ‘pre-term’ baby becomes an ‘earlier born’ or, to make it even more pointed, ‘old born’,” read the order penned by Justice Gokhale.
The judges also termed the NIAC’s approach as “unreasonable, unjust and contrary” to the fundamental utmost good-faith ethic of an insurance provider. “These submissions are the sheerest casuistry. They cannot be allowed to succeed,” the judges said, in a detailed 26-page order.
The young mother and professional had a “roller-coaster litigation” process to bring the matter to its logical end, notes the bench. It said: “The petitioner mother had not even had the time to revel in the birth of her twin babies and nurse them to health, when she faced the rude shock of rejection of her legitimate claim/s by the insurance company.”
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