Page 94 - BFSI CHRONICLE 10 th Issue (2nd Annual Issue ) .indd

BFSI Chronicle, 2 Annual Issue, 10 Edition July 2022
th
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the policy, i.e., from the date of issuance of the and communicate his acceptance to the
policy or the date of commencement of risk or person making offer. Similarly, the mere
the date of revival of the policy or the date of receipt and retention of premium until
the rider to the policy, whichever is later.” after the death of the applicant or mere
preparation of the policy document is
 Hon’ble Supreme Court in their judgment not acceptance and doesn’t give rise to
dated 10/07/2009 in the case of Satwant contract-acceptance must be signified
Kaur Sandhu Vs. New India Assurance by some act or acts agreed on by the
Co. Ltd. (civil appeal no. 2776 of 2002) parties or from which the law rises a
observed: ”Nonetheless, it is a contract of presumption of acceptance”
insurance falling in the category of contract

uberrimae fidei, meaning a contract of utmost From the above, it is evident that the person
good faith on the part of the assured. Thus, seeking insurance cover should give true and
it needs little emphasis that when an accurate answers to the questions in a proposal

information on a specific aspect is asked for insurance. It will be in the interest of the
for in the proposal form, an assured is person seeking insurance to not to suppress
under a solemn obligation to make a true any material information in the proposal form
and full disclosure of the information which may entitle an insurance company to
on the subject which is within his rescind the contract at a later date when the
knowledge. It is not for the proposer insurance company can establish suppression
to determine whether the information of material facts by the proposer for insurance.
sought for is material for the purpose of
the policy or not.”
Note: Any views or opinions represented in this
 Hon’ble Supreme Court in appeal no.2197
of 1970 – LIC of India vs. Rajavasi Reddy, article are in the author’s personal capacity and
has observed “A contract concludes only do not represent those of people, institutions or
when the party to whom an offer has organisations that the author is associated with.
been made accepts it unconditionally

The Institute Of Cost Accountants Of India

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