Insurer’s Attempt to Repudiate Claim on Ported Policy Rejected; Court Emphasizes Diligence in Policy Portability
In a significant judgment delivered by the Bombay High Court on January 23, 2026, Justice Somasekhar Sundaresan upheld the award of the Insurance Ombudsman in favor of Manjula Haresh Joisar, dismissing the petition filed by Care Health Insurance Ltd. The case revolved around the portability of a health insurance policy from Star Health and Allied Insurance Co. Ltd to Care Health Insurance Ltd, and the subsequent repudiation of a claim by Care Health on grounds of non-disclosure of carcinoma by the insured.
The court observed that once an insurer accepts a ported policy, it is presumed to have taken an informed decision after scrutinizing the claim and medical history. The insurer cannot later allege non-disclosure by the insured as a basis for repudiating claims. Justice Sundaresan highlighted that the insurer is expected to exercise due diligence in vetting claim history before accepting a ported policy, as per Regulation 17 of the Insurance Regulatory and Development Authority of India (Health Insurance) Regulations, 2016.
The judgment emphasized that blaming a dysfunctional Insurance Information Bureau (IIB) portal, which Care Health claimed was the reason for its inability to verify the claim history, was not a valid excuse. The court stated that the insurer should have either reached out to Star Health for the requisite information or rejected the porting request if the necessary data was unavailable. Accepting the policy and premium without having complete information was seen as a lack of due diligence on the part of Care Health.
Furthermore, the court noted that the doctrine of utmost good faith does not shift the burden of claim history verification to the insured in the context of porting between insurers. The insurer, having accepted the porting request, is presumed to have acted with due diligence.
The judgment reinforces the regulatory framework designed to ensure a seamless migration of insurance policies without the burden of fresh risk assessment, thereby protecting the rights of the policyholder. It calls for insurers to maintain professionalism and diligence in handling ported policies.
The decision serves as a reminder to insurance companies of their obligations under the IRDA Regulations and underscores the importance of informed decision-making in policy porting processes. The petition was dismissed, and the award by the Insurance Ombudsman was upheld, ensuring justice for the insured party, Manjula Haresh Joisar.
Bottom Line:
Insurance Law - Portability of Health Insurance Policy - Insurer accepting ported policy presumed to have taken an informed decision on the basis of claim and medical history - Insurer cannot later claim non-disclosure by the insured as a ground for repudiation of claims.
Statutory provision(s): Regulation 17 of IRDA Regulations, Insurance Act, 1938, Doctrine of utmost good faith (uberrima fide).
Care Health Insurance Ltd v. Manjula Haresh Joisar, (Bombay) : Law Finder Doc id # 2847667
