A 57-year-old man from Mumbai was hospitalised for seven nights in early 2021 with COVID-19 and pneumonia. He had held a health insurance policy for over six years — ported from one insurer to another — and had paid his premiums without interruption. His family had been responsible, long-term policyholders.
The hospitalisation claim was for approximately ₹1.82 lakh. It should have been straightforward. It was not.
Several months after the hospitalisation, the insurer sent a deficiency notice requesting three things: the COVID-positive investigation report, a passport photograph, and a cancelled cheque or NEFT form. Standard documentation. The family compiled everything and submitted it.
The insurer did not respond. Then, in 2023 — two years later — the family filed a formal grievance. The insurer suddenly acknowledged receipt of the documents but raised a new objection: there was a "name mismatch" on the cancelled cheque.
The name mismatch, it emerged, was minor. A name written slightly differently across two documents. It had not been flagged in the original deficiency notice. It was raised only after the grievance was filed.
The claim remained unpaid.
The family escalated to INGRAM — the Insurance Regulatory and Development Authority's Grievance Management portal. In the course of that process, a deeply troubling allegation emerged: family members alleged that the insurer's claims staff had demanded a bribe to process the claim. The specific amount mentioned was ₹30,000.
Whether or not this allegation is provable, it fits a pattern that consumer advocates recognise: genuine claims being stalled indefinitely through document cycling, with claimants pressured into "facilitating" settlement.
A consumer complaint was ultimately filed at the District Consumer Commission. A legal notice was also drafted. The case entered the formal dispute resolution process.
Upload your rejection letter and get a personalised recovery plan in minutes.
This case illustrates a textbook example of procedural bad faith:
Step 1 — The insurer imposes a waiting game. No response for months after submission. IRDAI requires insurers to settle claims within 30 days of receiving all documents. This deadline was missed by years.
Step 2 — The deficiency notice is selective. The original deficiency notice listed three items. The policyholder submitted all three. The insurer then raised a new objection (name mismatch) that was not in the original notice. This is the "document cycling" pattern — each time you respond, a new barrier appears.
Step 3 — Escalation triggers sudden responsiveness. Only when a formal grievance was filed did the insurer acknowledge receipt — and only to find a new reason to deny. The grievance mechanism is meant to resolve disputes, but some insurers use the acknowledgment step merely to reset the paperwork clock.
Step 4 — The underlying claim was never medically disputed. At no point did the insurer argue that the COVID-19 hospitalisation wasn't covered, that it was a pre-existing condition, or that it fell under an exclusion. The rejection was entirely procedural.
Under IRDAI's regulations and the Protection of Policyholders' Interests Regulations:
The consumer forum has the power to award not just the original claim amount but also interest from the date of rejection, compensation for mental agony and harassment, and litigation costs.
Document everything. Every submission, every email, every phone call — keep a dated record. When the insurer claims you didn't submit something, your email log is your evidence.
Send via email, not just courier. A courier receipt proves you sent a package. An email with read receipt proves what was in it and when the insurer received it.
Name mismatches are often minor and correctable. Ask the insurer in writing to specify exactly which documents are affected and what form of correction they will accept. Don't let vague objections become indefinite delays.
A procedural rejection can be contested as forcefully as a medical rejection. Courts and ombudsmen take document cycling seriously. The insurer's obligation to pay a valid claim is not dischargeable through paperwork delays.
Escalate without hesitation. Internal grievance, then INGRAM, then the Ombudsman, then the Consumer Forum. Each step creates a record and increases the pressure on the insurer to resolve.
Case details have been anonymised. This article is based on documents reviewed as part of FairClaims' 2026 case intake. It is for informational purposes only and does not constitute legal advice.
Was your claim rejected or cut short? Our experts analyse your case free.
Analyze My Claim — FreeChat on WhatsApp