What was the Kerala HC case against LIC about?

Dr. A.M. Muraleedharan filed health insurance claims for his wife's treatment, which LIC unfairly denied. The Kerala High Court ordered LIC to pay the claims, citing consumer rights and constitutional protections.

What is Section 45 of the Insurance Act?

Section 45 states that after 3 years of continuous coverage, insurers cannot deny claims based on misstatement or pre-existing conditions.

Why is this judgment important?

It reinforces consumer rights, interprets insurance contracts in favor of policyholders, and ties health insurance directly to the Right to Life under Article 21 of the Indian Constitution.

Kerala HC vs LIC: A Landmark Judgment on Insurance Rights

On 8 September 2025, the Kerala High Court delivered a powerful judgment against Life Insurance Corporation of India (LIC), setting a precedent in health insurance law. The case involved Dr. A.M. Muraleedharan, a 58-year-old from Kannur, who fought LIC’s arbitrary rejection of his wife’s medical claims—and won.

The Background

Dr. Muraleedharan had been paying premiums under LIC’s Health Plus Plan since 2008. In April 2016, his wife was hospitalized with vesicovaginal fistula, a serious condition requiring 10 days of treatment. He filed a claim for ?60,093.

Instead of processing it, LIC delayed for months, demanding repeated documents. Eventually, they paid just ?5,600. Later, when his wife required further treatment costing ?1.8 lakh, LIC rejected the claim outright—citing a hernia surgery in 2006, 10 years before the policy began.

Kerala HC’s Observations

Justice P.M. Manoj tore down LIC’s arguments point by point:

Section 45, Insurance Act (1938, amended 2015): After 3 years, insurers cannot deny claims based on pre-existing conditions.
Medical Relevance Doctrine: Only illnesses related to the claim matter. Hernia ? Vesicovaginal fistula.
Contra Proferentem Rule: Ambiguous clauses must favor the insured. (Reference: General Assurance Society v. Chandmull Jain, 1966).
Right to Life (Article 21): Denial of insurance = denial of treatment, violating fundamental rights.

The Judgment

The court ordered LIC to immediately settle the claims. Justice Manoj criticized public sector insurers for exploiting fear, collecting premiums for years, then repudiating claims on flimsy grounds. He emphasized that insurance must build trust, not erode it.

Why This Matters

This ruling strengthens policyholders’ rights and sets a precedent:

Section 45 protects consumers from old pre-existing condition traps.
Health insurance claims are tied directly to the Right to Life.
Courts will not tolerate insurers exploiting ambiguities against policyholders.

Precedent Value

The judgment aligns with earlier cases:

LIC of India v. Asha Goel (2001) – contracts must be read in favor of the insured.
Skandia Insurance v. Kokilaben Chandravadan (1987) – exclusion clauses cannot be used unfairly.

Conclusion

This landmark case proves that insurance is about protection, not exploitation. For policyholders, it is a reminder to fight unjust denials. For insurers, it’s a warning: technical evasions won’t stand in court.