One Year and One Day: Limitation, Moratorium and Forum-Shopping
A family floater health policy with a public sector general insurer, sum insured ₹15 lakh, was issued in March 2019 and renewed without a break. In July 2024 the insured, a resident of Nashik, underwent angioplasty and claimed ₹11.8 lakh. On 14 August 2024 the insurer repudiated the claim, citing non-disclosure of hypothyroidism and the 48-month pre-existing disease waiting period. The insured wrote to the Grievance Redressal Officer, escalated to IGMS on 2 October 2024, and received an IGMS "final response" on 20 November 2024. He filed before the Insurance Ombudsman at Nashik on 12 December 2025, claiming ₹11.8 lakh plus ₹5 lakh compensation and ₹50,000 costs. The Ombudsman registry has queried limitation, the insurer argues the claim is stale, and the insured's lawyer wants to appear at the Ombudsman hearing. The policy was serviced through the insurer's Mumbai divisional office.
1. The insurer treats the non-disclosure of hypothyroidism as a complete defence. Does the health insurance moratorium change the outcome?
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Probably not defensible for the insurer, because the moratorium has run.
Under the IRDAI (Insurance Products) Regulations, 2024 and the Master Circular on Health Insurance Products dated 29 May 2024, a health policy continuously in force for 60 months enters a moratorium period. After that the insurer cannot contest the policy or a claim on the ground of misrepresentation or non-disclosure, except where (i) fraud is established, (ii) a permanent exclusion applies, or (iii) the claim is not payable by law. The moratorium attaches to the policy, so it covers the floater as a whole, although an increased sum insured may be assessed separately for the enhancement.
Applying it: the policy incepted in March 2019 and renewed without break, so the 60-month threshold was crossed in March 2024, before the 14 August 2024 repudiation. The only surviving ground is fraud, which means a deliberate misrepresentation made with intent to deceive - not an omission about a controlled condition such as hypothyroidism. The insurer must show the insured knew of the condition, was asked about it at proposal or at the relevant renewal, and answered falsely with intent. IRDAI's framework expects fraud to be proved, not inferred from the medical file.
The 48-month pre-existing disease waiting period is a different question: if the angioplasty is traceable to a condition diagnosed before inception, the exclusion can be applied on its own terms even inside the moratorium - but the insurer's stated ground is non-disclosure, so it must plead and prove the exclusion instead.
2. Advise on limitation before the Insurance Ombudsman: from which date does the one-year period run, can it be condoned, and what should the complainant do now?
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The complaint appears late, and the Ombudsman cannot save it on his own motion.
The Insurance Ombudsman Rules, 2017 require a complaint to be made within one year of the insurer's rejection of the grievance (or of the insurer's failure to reply within the prescribed period). Rejection was on 14 August 2024, so the window closed on 14 August 2025; the complaint filed on 12 December 2025 is about four months late. The IGMS escalation and the "final response" of 20 November 2024 do not normally create a fresh cause of action - IGMS is an internal escalation channel of the same insurer, not a new adjudication - although a genuinely fresh, independently reasoned rejection could arguably restart the clock. The Ombudsman scheme is not governed by the Limitation Act and the Ombudsman has no power to condone delay; the registry will ordinarily return a time-barred complaint.
Practical advice: (i) request the Ombudsman in writing to treat the 20 November 2024 IGMS response as the operative rejection and let him rule on maintainability - do this immediately and in writing; (ii) in parallel, file before the consumer commission, where limitation is two years, so that no remedy is lost. Do not wait for the Ombudsman's view before protecting the consumer remedy.
3. Is a consumer complaint maintainable, before which commission, and what is the effect of the pending Ombudsman proceedings? Mention the position on appearance by a lawyer before the Ombudsman.
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Maintainable, before the District Commission at Nashik. Insurance is a "service" and a wrongful repudiation is a "deficiency" under the Consumer Protection Act, 2019. Pecuniary jurisdiction is fixed by the consideration paid, not by the amount claimed: the District Commission hears matters where the consideration does not exceed ₹50 lakh, so a ₹15 lakh sum insured claim belongs there - the ₹17.3 lakh claimed as compensation does not push it to the State Commission. Territorial jurisdiction lies where the complainant resides or where the cause of action arose, so Nashik is fine even though the policy was serviced from Mumbai.
Limitation: two years from the cause of action under Section 69; the cause of action is the repudiation of 14 August 2024 (at the latest the IGMS response of 20 November 2024), so a complaint filed now is within time.
Parallel proceedings: the Ombudsman is an alternative remedy and does not bar the consumer commission, but the complainant cannot recover twice for the same loss. Once the consumer complaint is filed, withdraw or let lapse the Ombudsman complaint; if an Ombudsman award is passed and accepted, the insurer must comply within 30 days and the same relief cannot be re-agitated. A consumer commission can award the claim, interest and compensation for mental agony - usually more than an Ombudsman award.
Lawyers: the Ombudsman's procedure is summary and informal, and the Rules contemplate representation by the complainant or an authorised representative rather than a legal practitioner, who may appear only with the Ombudsman's leave. The lawyer should file a written application for permission or, better, let the complainant appear personally with a written submission prepared by counsel.