order dated 14-07-2009<br /> <br /> O R D E R<br /> <br /> K.S. PRASAD, MEMBER<br /> <br /> The case of the complainant is as follows;<br /> <br /> 1. That the husband of the complainant Sri. Joseph had availed a loan from ICICI Prudential, Kushalnagar branch in March 2006 for construction of his residential house at Kushalnagar. At that time at the instance of the opposite party, he also availed a home assurance policy bearing No.02618704 from ICICI Lombard at Kushalnagar on 27-1-2006 for a sum of Rs.2,41,231/- with a annual premium of Rs.10,750/- for a period of four years.<br /> <br /> 2. That the husband of the complainant died on 12-1-2007 at his house. The complainant had approached the opposite party for the insurance claim. The opposite party repudiated the claim stating that the policy holder was under treatment for cordial in June 2004, which was not disclosed by him at the time of obtaining the policy. The same was intimated through its letter dated 27-3-2007 which was received by the complainant on first week of April 2007.<br /> <br /> 3. That by repudiating the claim of the complainant, the opposite party committed deficiency in service and thereby causing great financial loss and also mental agony and hence the complainant approached this Forum praying for a direction to the opposite party to honour the claim of the complainant along with other reliefs.<br /> <br /> 4. Upon admitting the complaint notice was ordered to be sent to the opposite party and on receipt of the notice opposite party appeared through their advocate and has filed the version and affidavit evidence in lieu of examination in chief and has taken the following contentions;<br /> <br /> 1. That the ICICI Prudential Life Insurance Company Ltd., is a Life Insurance Company registered under section 3 of the Insurance Act 1938, having its registered office at Mumbai.<br /> <br /> 2. That as a life insurer opposite party offers insurance coverage to individuals through individual assurance and to group of individuals through group life insurance schemes. In the group schemes, on acceptance of the risk under the proposal, a master policy is issued to the proposer, the group administrator covering all the eligible members of the group and the proposer group administrator becomes the policy holder of the master policy. The ICICI prudential company has a group scheme known as “Home Assure” plan of insurance for borrowers of housing loans of different financial institutions and are granted insurance coverage for an amount equal to the outstanding loan as on the date of the death of the borrower.<br /> <br /> 3. That the contract of insurance is a contract of utmost goodfaith, the life assured is bound to disclose all the material facts relating to his health and to reply truthfully, honestly and correctly to all questions in the proposal form and any suppression of those details rendered the contract of insurance illegal, invalid, void ob-ini and unenforceable.<br /> <br /> 4. That the policy no.02618704 had run for a very short period of 9 ½ months, before death claim dated 24-2-2007 was lodged by the complainant intimating the opposite party about the sad demise of the life assured, cause of death of life assured being natural death/ heart attack.<br /> <br /> 5. That it is the duty of the insured to disclose all material information at the time of proposing for the policy and as per the provisions of section 45 of the Insurance Act, 1938, the insurer can call a policy in question on the ground of non-disclosure and / or false statements in the proposal form. Since the life assured admittedly failed to disclose the fact that he was diagnosed to be suffering from Ischemic cardimyopathy and two vessel coronary artery disease with left ventricular dysfunction in June 2004 as also the fact that he used to consume alcohol and cigarette, the claim was rightly repudiated by the opposite party.<br /> <br /> 6. That the complainant in her complaint has no where denied that fact that the life assured had concealed the materials information pertaining to his health status prior to the proposal stage neither has she denied the fact of his health status at the time of proposing for the policy and the life assured obtained the policy by concealment of material facts.<br /> <br /> 7. That Mr. Joseph K.M., the life assured submitted the proposal form for insurance on his life on March 27,2006 as per the details given below;<br /> <br /> Application No. H100043624<br /> Proposal signed date March 27,2006<br /> Proposal received by respondent March 28,2006<br /> Age at entry 56 years <br /> Profession/occupation of the life assured Salaried<br /> Plan name Home assure <br /> Details of First Premium deposit paid Cheque No.824363 dated March 24,2006 drawn on ICICI Bank Ltd for Rs.10750 (Rupees ten thousand seven hundred and fifty only)<br /> Base sum assured Rs.241231/-<br /> Premium installment Rs.9,755/-<br /> <br /> 8. That it is clearly mentioned in the proposal form that the insurance is a contract of utmost good faith requiring of the life to be assured not only to disclose all material facts but also not to suppress any material facts in response to the questions in the personal declaration form. <br /> <br /> 9. That as per the declaration and authorization in the proposal form duly submitted by the life assured he has to declare that the answers given to questions to the proposal form and the information given to the medical examiner of the company as to the state of health and habits are true and complete in every respect and not withheld any material information or suppress any fact and any changes in the state of health of the life assured or as to his occupation subsequent to the signing the proposal and before the acceptance of risk by the company. <br /> <br /> 10. That the life assured had not disclosed any adversities regarding his health in the proposal form and the same is evidenced by the fact that he had replied in negative to question Nos:E(d) to E (m) in the proposal form.<br /> <br /> 11. That believing the information given by the life assured in the proposal form to be true and correct as per the under writing norms of the company the said proposal was accepted by the opposite party at ordinary rates of premium under the non-medical category without subjecting the life assured to an medical examination and the policy being No.02618704 was issued on March 31,2006.<br /> <br /> 12. That in accordance to clause 6(2) of the Insurance Regulatory and Development Authority (Protection of Policy holders interests) Regulations 2002, every policy document sent by it is accompanied by a forward letter which clearly mentions that in case policy holder is not satisfied with the terms and conditions of the policy he can withdraw / return the policy within 15 days i.e. under the ‘Free Look Period’ provision. But the life assured retained the policy document and did not return the same to the opposite party for cancellation of the policy during the free look period thereby implying that he had agreed to all the policy terms and conditions mentioned therein.<br /> <br /> 13. That the life assured deliberately misled the opposite party by concealing material information and furnishing false replies while filling up the proposal form. It is submitted that the life assured had not disclosed the full, complete and correct facts regarding his health and medical history. The proposal for insurance signed by the life assured on 27-3-2006 which was received by the O.P on 28-3-2006 the relevant questions in the proposal form were answered as follows;-<br /> <br /> Q.No. Question Answer <br /> E(e) Have you ever consulted/ been hospitalized for general check-up observation, treatment or surgery? No<br /> E(f) Did you have any ailment/ injury requiring treatment/ medication for more than a week? No<br /> E(g) Have you ever availed leave on medical grounds in the last two years? No<br /> E(h) Have you ever suffered or are suffering from any of the following:(i) Ailments/ symptoms relating to the Heart, Digestive system, Kidney, Brain or Nervous system, Mental/ Psychiatric ailment. No<br /> <br /> 14. The opposite party had sent two reminders to the complainant on 27th February 2007 and 14th March 2007 requesting to submit the documents of previous medical records, certificate from usual/ family doctors etc. in order to process the claim. But the complainant did not submitted the documents required to assess the claim and during the claims processing, the following records were obtained.<br /> <br /> Sl.No Name of the Document Particulars from the document<br /> 1 Discharge summary from Vikram Hospital & Heart Centre, Mysore dated July 01, 2004 duly signed by Dr.Arun Srinivas, MD. DM Cardiologist. Name:Mr.K.M. Joseph.Date of Admission:24-6-04Diagnosis: Ischemic Cardiomyopathy. Two Vessel coronary artery disease with LV dysfunction.History:a) History of breathlessness since 15 days present even at rest associated with cough, PND and decreased urine output.b) Known case of CAD-two vessel disease with LV dysfunction.c) Ex-smoker and alcoholic quit 4 months back.2D Echoa) Ischaemic Heart Disease.b) Akinetic septum, Inferoposterior wall. Hypokinetic anterior wall.c) Severe left ventricular dysfunction. EF-23%d) Severe Mitral Regurgitation.Course in the Hospital:a) Patient was admitted in CCU on 24-6-2004 with the above complaints. He was treated with IV inotropes, diuretics, Lanoxin, nebulisation.b) 2D Echo done showed Ischaemic Heart Disease. Akinetic Septum, Inferoposterior wall.c) Patient was haemodynamically stable and shifted to ward.<br /> <br /> 15. That Ischemic Cardiomyopathy is a heart and muscle related disease coronary artery disease (CAD) is also called coronary heart disease, CAD can weakers the heart muscle and lead to heart failure and is most common type of heart disease. Left ventricular dysfunction usually leads to heart failure.<br /> <br /> 16. These information about the health status of the life assured was material for the O.P to evaluate the proposal made by him and also incumbent upon the life assured to declare true and correct facts about his own medical state at the time of proposing, the OP would have declined the proposed and would not have issued the policy.<br /> <br /> 17. That life assured was suffering from ischemic Cardiomyopathy and two vessel coronary artery disease with left ventricular dysfunction prior to the issuance of the policy and it is evident that non-disclosure is directly related to the cause of death. It is the obligation of the life assured to make full disclosure of material facts which may be relevant for the insurer to take in to account while deciding whether the proposal should be accepted.<br /> <br /> 18. That the claim is paid by any insurance company out of the common funds belonging to all policy holders of the company and insurance Company has to check the genuineness of a claim before honouring it and cannot do injustice to genuine policy holders by allowing false claims. The claim of the complainant was repudiated bonafide and due to suppression of material facts at the time of seeking the proposal for insurance and hence the complainant is not entitled for any compensation or relief from the opposite party and prays for the dismissal of the complaint.<br /> <br /> 5. Heard the advocate for both side and perused the documents and the written arguments filed by the O.P. The points arisen for consideration are;<br /> <br /> <br /> 1. Whether the O.P has committed deficiency in service by not honouring the claim of the complainant?<br /> <br /> 2. To what order?<br /> <br /> <br /> R E A S O N S<br /> <br /> 6. It is the case of the complainant that he never suppressed any facts at the time of sending the proposal for obtaining insurance, as it was not within his knowledge and illness suffered and there is no nexus between the illness suffered and the cause of death. <br /> <br /> 7. It is submitted by complainant’s advocate that the complainant’s husband died of natural death and not with any disease, therefore, the opposite party has illegally repudiated the claim of the complainant being the wife of the insured.<br /> <br /> 8. It is also argued that the opposite party has not placed any medical records to show that during 2004 the complainant’s husband took treatment for ischemic cardio myopathy, though the burden was on the opposite party to establish that the complainant’s husband knew the disease with which he was suffering at the time of sending the proposal.<br /> <br /> 9. As against the above submission the advocate for O.P has submitted written arguments and also orally argued the matter.<br /> <br /> 10. It is the case of the opposite party that the complainant has suppressed the facts regarding the health of her husband wherein the policy was obtained by concealing the fact and the documents produced by them are sufficient to prove that the complainant has failed to establish his right. <br /> <br /> 11. It is further submitted that the life assured is reported to have died on January 10th, 2007 within 9 ½ months from issuance of the subject policy and the opposite party though had sent two reminders to the complainant requesting her to submit the relevant documents such as copies of previous medical records, certificate from family doctors, in order to process the claim, but the complainant chose not to submit the documents require to assess the claim. <br /> <br /> 12. It is also submitted that from the documents on record is clearly evident that the life assured was diagnosed of ischemic cardiomyopathy and two vessel coronary artery disease with left ventricular dysfunction in 2004 which is prior to submission of proposal for insurance on Mary 27, 2006 and had the complainant’s husband had disclosed medical history properly the company would not have issued the policy and therefore, the complainants husband has committed breach of contract and on this ground the contract has become void and no right is accrued and therefore the complainant being the wife of Sri. K.M. Joseph is not entitled for any relief prayed for in her complaint.<br /> <br /> 13. The following citations would suggest that burden is on the insurer to establish that there is nexus between the disease and the cause of death and the burden is heavily on the insurer to establish that the insured had the knowledge of the disease and knowingly the insured has failed to disclose the same at the time of sending the proposal. <br /> <br /> “Life Insured died- claim repudiated on the ground of suppression of fact of illness- but there was no nexus between ailment and death” – Dvl.Manager, LIC of India Vs Jeetho Devi 1997(1) CPJ 310.<br /> <br /> “Claim was repudiated on the ground that the insured who died on heat attack suppressed the fact of his suffering from diabetes- the insurance company has failed to prove the nexus between heart attack and diabetes. Repudiation of claim amounts to deficiency in service” – Shantha Ben Ratilal Patel Vs LIC of India 1996(2) CPJ 92.<br /> <br /> “Insurance claim repudiated for concealment of fact of insured suffering from cancer. There was no evidence that the insured had the knowledge . Repudiation held was bad.” LIC of India Vs Sanjeev Mahendra Paul Sha 1998(1) CPJ 45-National Commission.<br /> <br /> “Claim repudiated for suppression of material fact no nexus of cause of death and ailment was proved. Repudiation was held to be arbitrarily” Dvl.Manager, LIC of India Vs T.Venkateshwaralu 1998(1) CPJ 568 AP.<br /> <br /> “The burden to prove of ailment lies on the company. No document was produced in support of contention that the deceased did not disclose that he was suffering from heart ailment. Insurance company failed to discharge his duty and held liable for deficient in service and liable to payment with interest” LIC of India Vs Smt.Asha Singh 2002(1) CPJ 403 UP, LIC of India Vs Charanjit Kour 2001(1) CPJ 53, LIC of India Vs Surjan Singh Saini 2001(1) CPJ 278.<br /> <br /> 14. Keeping the above citation in mind and the materials placed before the Forum it can be said that the O.P has failed to establish that the insured had deliberately and knowingly suppressed the fact of the disease which he was suffering at the time of sending the proposal for obtaining home assurance policy.<br /> <br /> 15. The advocate for the complainant has relied on the following citations to convince the Forum that the burden of proving the suppression of material facts by the insured is heavily on the insurer, if that burden is not discharged by the insurer, repudiation becomes illegal. <br /> 1. III (2005) CPJ 683<br /> 2. I (2005) CPJ 78 <br /> 3. II (2005) CPJ 662<br /> 4. II (2005) CPJ 124<br /> 5. II (2005) CPJ 9 (NC)<br /> 6. II (2005) CPJ 114<br /> <br /> 16. Since the O.P had repudiated the genuine claim made by the complainant it can be said that they have committed deficiency in service and therefore we answer point no.1 positively. <br /> <br /> 17. Having given the findings and the reasons thereto we proceed to pass the following order.<br /> <br /> O R D E R<br /> <br /> The complaint is allowed and the O.P is hereby directed to consider the claim of the complainant positively taking in to consideration of the amount paid towards the house loan and the balance amount due from the complainant’s husband towards house loan as per the claim proposal sent by complainant. For complainant being put to hardship and mental agony the O.P is directed to pay a compensation of Rs.1,000/- and further directed to pay Rs.1,000/- towards the cost of this proceedings to the complainant.<br /> <br /> The above order shall be complied within sixty days from the date of receipt of this order by the opposite parties.<br /> <br /> Communicate the order to the parties.<br /> <br /> Dictated to the Stenographer. Got it transcribed and corrected. Pronounced in the open Forum on this 14th day of July 2009.<br /> <br /> <br /> (M.R. DEVAPPA), (K.S. PRASAD), (A.S. HEMALATHA),<br /> PRESIDENT MEMBER MEMBER<br /> <br />