Page 50 - Insurance Times June 2021

the LIC to circulate this order to all its branches situated in
Tamil Nadu and collect details of similar cases and produce
them before the court on June 28, the next date of hearing
by way of counter.
LEGAL Insurance company fined for deficiency

in service
Not paying the maturity amount of a policy in accordance
Vehicle Insurance with the minimum amount guaranteed is deficiency in
service. Stating this, the District Consumer Disputes
Wife not entitled to insurance money if Redressal Commission, UT, not only directed an insurance
firm to pay the balance amount of Rs59,095 to a consumer,
not contributed by deceased husband: but also directed it to pay a compensation of Rs25,000 for

Madras High Court deficiency in service and unfair trade practice.
The wife will not be entitled to any legal share in the Rajesh Garg, a resident of Sector 21, approached the
insured money, if her deceased husband did not contribute commission after the company failed to give him the
any premium, the Madras High Court has ruled. Justice S promised amount after the maturity of the policy.
Vaidyanathan gave the ruling while passing interim orders In the complaint, Garg said he took a single premium policy
on a petition from G Asha, wife of Ganesh Raja of from Bajaj Allianz Life Insurance Company Limited for Rs1
Veppampattu in Tiruvallur district, recently. lakh on April 2, 2010. The policy was to mature on March
The judge said he wants to know as to who had paid the 28, 2020. On maturity, the complainant was entitled to at
premium in its entirety till the demise of Ganesh Raja, least 170 per cent of the unit price payable on March 28,
either her father-in-law or her deceased husband himself. 2020. However, there was neither any response or credit
of the amount by the due date.
Till time the fact as to who had paid the premium to the
insurance company and whether any single pie had been The company claimed that the maturity amount was
contributed by the deceased or not, is known, this court calculated as per the stipulations in the policy and a cheque
cannot decide the issue relating to the entitlement of the dated March 31, 2020, for Rs1,55,460 was prepared, but
petitioner to claim a share in the maturity amount, the it could not be delivered to the complainant due to the
judge said. In case the deceased husband had not made any lockdown. A fresh cheque was dispatched to the
contribution towards premium, there is no justification on complainant, which was received by him on August 13,
the wife's part to seek her share, he said. "It is no doubt 2020. The firm denied any deficiency of service.
true that wife, mother and children are class-I heirs of a The complainant said the maturity amount had not been
male deceased and not the father. calculated appropriately and the payment of Rs1,55,460
But the heirship will not be taken into account for this type was in contravention of the terms of the policy. According
of contingency, in case the entire contribution is not made to him, a total of 9865.6675 units were allocated to him
on March 31, 2010, and the maturity amount had been
by the deceased and the same has been paid only by the
father of the deceased." "In such circumstances, it is for calculated by the company as per the number of units at
the father of the deceased to decide to give the money in the time of maturity i.e. 7148.3561.
its entirety or in proportionate to any person, including After hearing the arguments, the commission noted that
class-I heirs," the judge added. It is needless to state here the firm had not given any justification or basis for
that if a deceased has already declared the nominee and if reduction of the number of units from 9865.6675 at the
that person falls under the category of class-I heir other time of allocation till the time of maturity. In view of the
than father, then there may not be any problem in facts, the complainant is held entitled to receive Rs2,14,555.
disbursement of the maturity amount. Since the complainant has already received Rs1,55,460, the
In the present case, in case the woman's father-in-law is company is liable to pay him the balance amount of
able to establish that only he paid the entire premium by Rs59,095.
way of NEFT/RTGS /Transfer, other than remittance by cash The commission said the act of the firm in not paying the
in the name of his son, then there is no justification on the maturity amount in accordance with the minimum amount
part of the petitioner to seek for her share in the amount guaranteed at the time of inception of the policy amounts
and she has no case at all, the judge said. He then directed to unfair trade practice and deficiency in service. T

50 The Insurance Times, June 2021