Page 50 - Insurance Times February 2022

the claim by citing an existing medical condition, which was no premium was due. So, Ugan questioned now the insurer
disclosed by the insured in the proposal form and which con- could refuse to honour the claim on the pretext that the
dition has led to a particular risk in respect of which the policy had lapsed on March 31, 2015, due to non-payment
claim has been made by the insured," the bench said in a of premium.
judgment.
Bajaj Allianz did not care to contest the case. It did not ap-
The top court was hearing an appeal filed by Manmohan pear for the hearing, despite the Forum issuing several notices.
Nanda against an order of the National Consumer Disputes So, the complaint was decided ex-parte. Te Forum observed
Redressal Commission (NCDRC), rejecting his plea seeking that the requisite premium had been paid, yet the claim had
a claim for medical expenses incurred in the US. Nanda had not been honoured. It indicted Bajaj Allianz for being guilty of
bought an Overseas Mediclaim Business and Holiday Policy deficiency in service, and ordered it to settle the claim by paying
as he intended to travel to the US. On reaching the San the Rs 4 lakh sum assured, together with 10 per cent interest.
Francisco airport, he suffered a heart attack and was ad- Additionally, it ordered the insurer to pay Rs. 15,000 as com-
mitted to a hospital, where angioplasty was performed on pensation for mental harassment, another Rs. 15,000 towards
him and three stents were inserted to remove the block- financial compensation, Rs. 5,000 as litigation expense, and
age from the heart vessels. Rs. 2,000 towards miscellaneous expenses. Forth-five days
Subsequently, the appellant claimed the treatment ex- were given for compliance. In case of delay, the interest rate
penses from the insurer, which was repudiated by the lat- would rise to 12 per cent per annum.
ter stating that the appellant had a history of Bajaj Allianz Life appealed to the Bihar State Commission,
hyperlipidaemia and diabetes, which was not disclosed which concurred with the District Forum's view and dis-
while buying the insurance policy. The NCDRC had concluded missed the appeal with the observation that the repudia-
that since the complainant had been under statin medica- tion was wrong and unjustified.
tion, which was not disclosed while buying the mediclaim Bajaj Allianz Life then filed a revision petition before the
policy, he failed to comply with his duty to make a com- National Commission. It argued that the annual premium
plete disclosure of his health conditions. was received only for two years. The premium for the third
The apex court said the repudiation of the policy by the year, which was due on October 13, 2014, could not be
United India Insurance company was illegal and not in ac- considered to have been paid as the cheque had got
cordance with law. It said the object of buying a policy is to dishonoured due to insufficient funds. The company claimed
seek indemnification in respect of a sudden illness or sick- the insured had not even approached it to revive the policy
ness that is not expected or imminent and that may occur within the grace period. The insurer argued that the policy
overseas. terms had not been properly interpreted. It relied on Clause
5 to justify its stand that the policy would lapse and the
Insurer must pay claim in auto-cover premium paid would stand forfeited without any benefits
payable to the insured.
period
The National Commission disagreed with this contention.
Ramprit Paswan purchased Super Cash Gain Insurance Policy It pointed out that the policy provided for auto cover for
from Bajaj Allianz Life Insurance. The policy was for the two years from the date of unpaid premium. Since the
period October 13, 2012, to October 12, 2028, with a sum
policy was taken on October 13, 2012, and second annual
assured of Rs 4 lakh. The annual premium was Rs 46,176.
premium had been paid on October 12, 2013, it concluded
His son Ugan Paswan was the nominee. that the auto cover would be valid for the next two years
After Ramprit expired on January 22, 2015, due to cardiac till October 12, 2015. As the insured had died on January
arrest, his son lodged a claim. The insurer repudiated the 12, 2015, well within the auto cover period, the Commis-
claim on March 31, 2015, on the ground that the policy had sion held the claim to be payable. The Commission observed
lapsed due to non-payment of premium. that it was because of this clause that the insurer had ini-
tially replied that the policy was valid and that no dues were
Ugan filed a complaint before the District Forum. He stated
that his father had paid the premium annually for three outstanding.
years. However, when his father attempted to pay the pre- Accordingly, by its order of October 7, 2021, delivered by
mium for the fourth year, it was not accepted despite re- C. Viswanath, the National Commission dismissed the revi-
peated attempts. When he demanded a written explana- sion petition and upheld the decisions holding the insurer
tion, the insurer replied that the policy was valid and that liable to settle the claim. T

50 The Insurance Times, February 2022