Bombay HC Ruling: Premium Taken Means Claims Must Be Honoured

The Bombay High Court has issued an important clarification on health insurance portability. It ruled that once a new insurer accepts a portability request and collects the premium, it cannot later reject claims on grounds like non-disclosure or internal system failures.

This decision reinforces that portability is not just a facility offered by insurers. It is a statutory right, and insurers must follow proper processes before accepting a migrated policy. 

What Does Health Insurance Portability Mean?

Health insurance portability allows a policyholder to shift their existing health policy from one insurer to another. People usually do this for better customer service, improved coverage, or more affordable premiums.

Portability also helps policyholders retain benefits such as waiting period credits, which are important for conditions like pre-existing illnesses.

What Did The Bombay High Court Clarify?

The High Court made it clear that insurers cannot accept a portability proposal, collect the premium, and then later deny claims by stating that the policyholder did not disclose information properly or that the insurer’s internal systems failed.

In simple terms, if the insurer had the chance to verify everything before issuing the policy, it cannot use those reasons to reject a claim later.

Insurers Must Do Checks Before Taking Premium

The ruling shifts responsibility onto the new insurer. It places a clear duty on the insurer to complete underwriting and verification before accepting the premium.

This includes checking:

• Medical disclosures
• Previous policy details
• Claim history
• Risk factors and documentation

If an insurer is unsure about the completeness of information, it must raise concerns before accepting the portability request.

Why This Matters For Policyholders

Many people hesitate to port their health insurance because they fear claim rejection later. This ruling offers stronger reassurance that once portability is accepted, claim protection becomes more secure.

It also pushes insurers to improve coordination, data-sharing, and decision-making timelines so that underwriting is completed upfront.

Read more: EPFO Hails Income Tax Rationalisation for Private PF Schemes.

Conclusion

The Bombay High Court’s ruling strengthens consumer rights in health insurance portability. It confirms that once an insurer accepts a ported policy and collects premium, it cannot deny claims later due to internal lapses or issues it should have checked earlier. For policyholders, this improves trust and makes switching insurers a safer decision.

Disclaimer: This blog has been written exclusively for educational purposes. The securities mentioned are only examples and not recommendations. This does not constitute a personal recommendation/investment advice. It does not aim to influence any individual or entity to make investment decisions. Recipients should conduct their own research and assessments to form an independent opinion about investment decisions.