Page 48 - Insurance Times June 2019

Vehicle Insurance

Insurer can't change surveyor at its whim then approached Reliance with a claim. Reliance stated that
her husband had not disclosed that he had another policy,
An insurance company cannot appoint one surveyor after
which was against the principle of utmost good faith in
another till it gets a report favorable to it, the Supreme
insurance law.
Court asserted in its judgment last week in the case, New
India Assurance vs. Luxra Enterprises. The court accepted the argument. It also rejected her ex-
cuse that the policy was filled up by the insurer's agent and
An insurer can reject a survey report, but it must give co-
her spouse had only signed it. The court stated that when
gent reasons for doing so, pointing out inherent defects in
the form is filled up, the agent was not acting on behalf of
it or it was arbitrary or excessive. In this case, there was a
the insurer but as that of the insured. The court, however,
fire in the garment factory. It claimed Rs. 55 lakh under the
allowed the woman to keep Rs. 5 lakh paid by the insurer
insurance policy.
according to its interim order.
New India appointed a surveyor who allowed the full claim
than the insurer appointed another firms as a surveyor Ex gratia not part of compensation
which reduced the claim to Rs. 25 lakh. Still dissatisfied with
While computing the compensation in a road accident
the report, New India appointed a third surveyor who rec-
death, the ex gratia given to the kin of the deceased from
ommended repudiation of the whole claim.
his employer should not be deducted from the total in-
Aggrieved by the total rejection, the garment factory moved come. However, if the amount is received under a govern-
the National Consumer Commission. It allowed the full ment rule, it can be deducted. This was stated by the Su-
claim but without interest. Both sides moved the Supreme preme Court in the case, National Insurance Company vs.
Court. Mannat Johal.

It dismissed the appeal of New India observing that "the It rejected the appeal of the insurance company, which
appointment of surveyors was to repudiate the claim on argued that the Rs. 48-lakh compensation granted by the
one pretext or the other". It also granted 6 per cent inter- Punjab and Haryana High Court, was too high. In this case,
est on the amount to the garment firm which was over- a 38-year-old executive died when an oil tanker hit his car
looked by the National Commission. while returning from Kaziranga with his wife and two chil-
dren.
SC upholds insurance claim rejections As the young man is with five dependents, the motor acci-
Life insurance companies won three cases in the Supreme dent compensation tribunal granted awarded Rs. 38 lakh.
Court last week as it upheld the rejection of claims on vari- On appeal, the high court raised it but reduced the inter-
ous grounds. In its judgment in one of these three cases, est from 12 per cent to 7.5 per cent. Both the insurer and
Reliance Life Insurance Co vs. Rekhabai, the court set aside the dependents appealed to the Supreme Court.
the order of the National Consumer Commission which
Both appeals were dismissed as the court held that the
allowed the claim.
compensation was fair and just. The reduction in the in-
The deceased had taken life policies from both Reliance and terest rate was also justified stating that it was the normal
Max New York. The wife collected money from Max and rate in such cases.

48 The Insurance Times, June 2019