Counsels:-
- For the Complainant :- Sri. R.C. Dash, Adv. & Associates
- For the O.P.s :- Sri. S. K. Nanda & Associates
Date of Filing:07.12.2023, Date of Hearing :11.03.2024 Date of Judgement : 13.05.2024
Presented by Sri Sadananda Tripathy, Member.
- The case of the Complainant is that wife of the Complainant was a policy holder of the OPs which is a Unit Linked, Non-participating Individual Life Insurance Plan for Savings and protection. The Complainant availed policy on 31.12.2021 and the date of commencement of risk was also from 31.12.2021. The Basic sum Assured of this policy is Rs. 1,00,00,000/- and a premium payable annually Rs. 1,73,442/-. The wife of the Complainant died due to Heart Attack on dtd. 24.06.2022. After the demise of his wife, the Complainant being the nominee, claimant, beneficiary and legal heir of the deceased put forth his claim to the OPs on dtd. 19.09.2022. After submission of the claim, the OPs demanded some documents which were duly produced and delivered to them by the Complainant, but the OPs did not response to the same and took several months by assigning unnecessary and irrelevant reasons. While the matter stood thus the OPs communicated several letters through email to the Complainant and finally on dtd. 31.05.2023 the OPs by issuing a letter disowned and rejected the claim of the Complainant by assigning a strange reason that “ During the assessment of the insurance claim, it is observed that Late Mrs. Sanju Sharma had multiple insurance policies worth 2.79 Crore before applying this policy with us and the same was not disclosed in the proposal form. Thus this policy was obtained by non-disclosure of the material financial facts at the proposal stage, therefore constrained to reject your claim” and illegally the OPs had refunded less the paid premium amount/consideration amount to the bank account of the Complainant after passing a long time of one year. At the time of the issuance of the policy and acceptance of the same the OPs never demanded any such thing as mentioned by them in their rejection letter. There was also never any non- disclosure of material financial facts by the deceased insured regarding her policy status. On the contrary the agent of the OPs voluntarily submitted all the information on behalf of the deceased and the agent completely kept the deceased insured in darkness at the time of making the proposal. Such an act of the OPs falls within the ambit of unfair trade practices.
- The O.P submitted, company received an intimation of death claim by the Complainant on dtd. 19.09.2022 which just after five months and Twenty four days of signing into the policy. After receiving the death claim intimation the OP duly conducted an inquiry about the cause of death of the LA and during the course of enquiry the OP obtained information from the doctor and issued a certificate in the name of the L.A. The LA was suffering from HTN, Thyroid, Chest Pain and had a past history of COPD and the date of these symptoms were first detected on 16.10.2020 which is much prior to the signing of the policy and it is quite evident from the certificate issued by the said doctor. The LA has purposefully suppressed the material facts about her past history though it was asked in the questionnaire section of the application form and all the answer were given in negative (part VI-B question numbered 5- Health Details). The said Policy was taken by the LA on representation of false financial status regarding the policies already held by her on the date of proposal and the LA is not entitled to avail High Value Policy of Rs. 1.00 Crore and she failed to disclose previous insurance policies. During the assessment of the insurance claim it is observed that the LA had multiple insurance policies worth Rs. 2.79 crore before applying this present policy and the same was not disclosed with the OP company in the proposal form. The LA had not disclosed the facts of being insured with such High Value policies with other insurance companies and hence it is matter of HLV breach case with an intention to get huge monetary benefits from the OP companies in an illegal manner by misrepresentation. The LA was aware of the imminent short span of her life and has taken high value policies from different companies and she is not entitled to such HLV. Hence the policy was treated as null and void since its inception and the premium was refunded. Further as per the amended rules notification dated 30th December 2021 wherein this Hon’ble District Forum shall have the jurisdiction to entertain the complaints where the value of goods or services paid as consideration does not exceed 50 Lakhs Rupees. Here the Insurance is never a service as the instant Policy is to be considered for the value of goods, being a unit linked policy which multiplies on the value of units on the date of its transfer. In the instant case the Complainant has claimed an amount of Rs. 1 Crore which may be construed as “value of goods”. Hence, the Complaint is not maintainable.
- The Complainant filed the following documents:
- Policy approval letter dated 10.02.2022 along with proposal form and medical report.
- First premium receipt dated 09.02.2022 for Rs. 1,73,442/-
- Unit Statement dated 31.01.2022.
- Rejection letter dated 31.05.2023.
- Mail dated 05.12.2023 of the O.Ps.
The O.Ps filed the following documents:
- Policy information documents.
- Death claim intimation form
- Copy of the certificate issued by the doctor dated 07.12.2022.
- Copy of e-mail and policy details from HDFC life, SBI life, ICI prudential and LIC.
- Repudiation letter dated 31.05.2023.
- Guidelines on HLV.
After perusal of the submission and documents the following issues are framed.
ISSUES
- Whether the Complainant is not a consumer of the O.Ps and this Commission has no jurisdiction to entertain the complaint?
- Whether the Complainant was having pre-existing disease and suppressed material facts?
- Whether the repudiation of the claim by the O.Ps is proper?
- What relief the Complainant is entitled to get?
Issue No. 1 Whether the Complainant is not a consumer of the O.Ps and this Commission has no jurisdiction to entertain the complaint?
The wife of the Complainant was a policy holder of the Ops and paid premium of Rs. 1,73,442/- to the O.Ps. As a nominee claimant, beneficiary and legal heir of deceased assured the Complainant is entitled to file the complaint.
The sum assured of the policy in question is Rs. 1.00 crore whereas the deceased assured deposited Rs. 1,73,442/- to-wards premium. As consideration paid is below Rs. 50.00 lakhs this Commission has pecuniary jurisdiction to entertain the complaint.
The issue is answered accordingly.
Issue No. 2 Whether the Complainant was having pre-existing disease and suppressed material facts?
From the proposal form and medical examination report it reveals that at the time of submission of proposal the assured has given the details of the policies asked by agent and given her answer to Dr. Sameekshya Baghel. Basing on the Statement the O.Ps accepted the proposal by receiving Rs. 1,73,442/- from the assured.
It is the admission of the insured that on 19.09.2022 the death claim was received wherein it was stated that the cause of death is heart attack on 24.06.2022 which is just after 5 month and 4 days of acceptance of proposal.
The insurer conducted an enquiry and obtained information from attending doctor Amiya Kanta Patel and the doctor issued a certificate on 24.06.2022 stating that the LA was suffering from HTN, THYROID, CHEST PAIN and had a past history of COPD(Chronic obstructive Pulmonary Disease) which was detected on 16.10.2020 prior to signing of the policy. The O.Ps alleged that this facts has been suppressed by the L.A. The LA due to the existing symptoms of COPD died of Heart attack. The L.A. was first consulted on 16.10.2020 at her house.
Basing on the certificate of Dr. Amiya Kanta Patel, MBBS the O.Ps repudiated the claim.
Here question arises whether the certificate issued by Dr. A.K. Patel is acceptable? The O.Ps have not filed any documentary evidence or medical record of the deceased to prove that she was first tested on 16.10.2020 by Dr. A.K. Patel. Secondly, the insurer has not examined Dr. A.K. Patel as witness to substantiate the statement. Accordingly, the Statement submitted by Dr. A.K. Pate; is not acceptable and discarded. It was the duty of insurer at the time of acceptance of the proposal policy physically examine the Life assured. In the instant case Dr. Sameksha Baghel Regd. No. 5229/2021 submitted the Telephonic Medical Examination Report of the LA and basing on the report the O.Ps accepted the proposal. It was the duty of O.Ps to ascertain the medical history of the assured before acceptance of proposal but failed to do. In Bhumikaben Patel & others Vs L.I.C. of India, 2024 live Law 365 the hon’ble apex Court held that once that first premium is accepted by the insurer than it is bound to pay the claim.
The Second allegation of the insurer is that the LA not disclosed the existing policies. From policy proposal it reveals that the LA has disclosed the existing policies. Relating to existence of policies of other insurance companies it was the duty of agent and insurer to examine the existing policies online prior to acceptance of proposal. The O.Ps intentionally to avoid payment of claim insisted from LIC to collect policies which it should have been done prior to acceptance of the proposal. The LA must have answered the agent about the policies asked as it reveals from proposal form. In order to avail business the insurer, hurriedly accepted the proposal. The policies cited by O.Ps of the year 2011, 2016, 2019 it reflects that LIC has accepted the said proposals taking into consideration the health condition of the L.A. It is no way helpful for the O.Ps.
The O.Ps cited III (2013) CPJ 203 (NC) Ram Lal Agrawal Vs Bajaj Allianz Insurance Co. Ltd. Case and Satwant Kaur Sandhu Vs New Indian Assurance Co. Ltd. (2009) 8SCC 316/2009 (9) SCALE 488. The citations are not applicable in this case as this case is different than the cited cases. The insurance contract is based on utmost good faith. The insurance companies generally take this plea to avoid the liability. When a contract is made it is bilateral. The insured is to disclose all the material facts and it is the duty of insurer to examine whether the statements furnished are true or not. After examination of material facts the acceptance should be made. Non examination of statements in proposal form amounts to deficiency in service. The O.Ps. have failed to perform their part obligation/duty.
Accordingly, the contention of the O.Ps are not acceptable. The issue is answered in favour of the Complainant.
Issue No. 3 :- Whether the repudiation of the claim by the O.Ps is proper?
The life Assured died on 24.06.2022.
The policy accepted on 31.12.2021.
Claim made on 19.09.2022.
Repudiation made on 31.05.2023.
The O.Ps submitted that standard financial Eligibility criteria and income multiple covering maximum insurance coverage. Here question arises whether the insurer examined all these factor before acceptance of the proposal? After acceptance of proposal the O.Ps in order to avoid the claim has taken such plea. While accepting proposal the insurer not examined the financial eligibility of insurer and maximum limit of insurance coverage. To fulfill their target the insurance companies not followed the general principles fixed as pointed out. Insurance business is matter of probability and very less possibility of claim, enriched the insurance sector. Taking the said opportunity the insurer ignore the basic principles thereby causing loss of public money. In the present case the insurer has not examined.
- The pre-existing disease through proper methods and enquiry.
- The existing policies with different insurance companies(Although option on online basis was available).
- The insurance coverage limit.
- Financial eligibility of the insured.
Which amounts to deficiency inservice. The refund of Rs. 1,65,817 as on 29.05.2023 vide NEFT UTR NO. 305298789604 by the O.Ps is unilateral, without application of mind and accordingly the repudiation made on 29.05.2023 is illegal. The insurer to save its skin and suppress the violation of insurance principles repudiated the claim.
The issue is answered accordingly.
Issue No. 4 What relief the Complainant is entitled to get?
From Supra discussion it is clear that the Complainant is entitled for the relief and accordingly it is ordered:
ORDER
The Complainant is allowed on contest against O.Ps. The O.Ps are directed to pay an amount of Rs. 1,00,00,000/- with 6% interest from the date of claim towards Sum Assured after deducting the refund amount. The O.Ps are liable to pay Rs. 1, 00,000/- towards physical strain and mental agony suffered by the Complainant as compensation and Rs. 20,000/- towards cost of the petition to the Complainant within 30 days from the date of order, failing which the amount will carry with 9% interest per annum till realization.
Order pronounced in the open Court today on 13th day of May, 2024.
Free copies of this order to the parties are supplied.
