Insurance claim can’t be denied for not disclosing existing policies: SC
NEW DELHI : The Supreme Court has held that an insurance claim of a consumer cannot be denied for not disclosing existing insurance policies unless the insurance company proves that information was fraudulently suppressed.
The order, passed on April 10, came in a case from Andhra Pradesh where the court directed insurance firm Future Generali India to pay claims of ₹7.5 lakh and ₹9.6 lakh, along with 7% interest from the date when the complaint was lodged in 2012, to the nominee of an insure policy holder.
The person covered by insurance, Sri Siriveri Venkateswarlu, purchased two policies from the company in 2009 and 2010 for a sum of ₹4.5 lakh and ₹4.8 lakh under an assurance that in the event of death by accident, twice the sum assured would be paid to the nominee, his daughter Mahakali Sujatha.
He disclosed in the form that he had no existing life insurance policies of any other company. When he died in a train accident in February 2011, the company rejected his daughter’s claim in December 2011 on the grounds that he held 15 other life insurance policies. The company said this was
“material” information that was suppressed by him.
The insurance company’s argument was rejected by the district and state consumer bodies but the national consumer dispute redressal commission (NCDRC) differed, and held on July 22, 2019 that the claim was rightly dismissed.
This week, a bench of justices BV Nagarathna and Augustine George Masih set aside the NCDRC decision and held, “The company is directed to make the payment of the insurance claim under both the policies to the appellant, amounting to ₹7,50,000 and ₹9,60,000, with interest at the rate of 7% per annum from the date of filing the complaint, till the actual realisation.”
The court held that NCDRC’S approach was “erroneous” for simply accepting the tabulated list of 15 policies produced by the insurance firm without any evidence supporting it.