Page 17 - Insurance Times December 2019

Cover Story

HOW UTMOST IS

UTMOST

GOODFAITH IN

INSURANCE

CONTRACT?

Abstract 01.04.2019, has made it crystal clear that the duty of
Of late, the Supreme Court of India in a couple of judgments accurate and complete disclosure by the proposer is
has re-affirmed the sublime importance of the principle of unqualified and mere disclosure of the previous policy does
not discharge the burden. It is further clarified that insurer
"utmost goodfaith" and reinforces the viewpoint that
cannot be burdened to enquire with the previous insurer on
amongst all the basic principles of insurance the principle
of utmost goodfaith stands on the highest footing. claims made, if any.
Whereas in Reliance Life Insurance Co Ltd & Anr. V
The underlying philosophy is that it is only the insured who
has exclusive knowledge of this information and if he Rekhaben Nareshbhai Rathod, Civil Appeal No. 4261 of
2019 (Arising out of SLP (C) No 14312 of 2015), delivered
conceals some information or discloses inaccurate or
on 24.04.2019 Court rejected the contention of the insured
incomplete information the insurer interest will be seriously
prejudiced and the risk underwritten would be different that agent filled in the proposal form and he did not read
or understood the proposal form, by holding that in doing
from the risk intended to be covered.
so the agent acted as agent of the insured and not the
The Apex Court in Oriental Insurance Company Limited v/s insurer.
Mahendra Construction, Civil Appeal No.3359 of 2019
These judgments will surely have wide implication and its
(Arising out of SLP(C) No.3381 of 2019) delivered on
tremors will be felt never like before and will radically shift
the claim handling process.
About the author

"All men are equal but some men are more
Ravi Ranjan Kumar Rana
Senior Manager in Claims Department equal than others"
HDFC Ergo General Insurance - George Orwell

The Insurance Times, December 2019 17