Page 47 - Insurance Times July 2019

Vehicle Insurance

'Dead man' bought life insurance policy Willful non-disclosure of medical history
Did a dead man walk into an insurance office to obtain a
is fraud: SC
life insurance policy? Or did his widow project the dead
In a recent judgment, the Supreme Court said that failure
man as alive to get the policy? The issue arose before a
on the part of a person to reveal his past history of disease
consumer court, which has rejected the insurance claim of
is valid ground for repudiation of his insurance policy ben-
the widow, but asked her to approach a civil court.
efits. A bench of Justices DY Chandrachud and Hemant
According to case details, Munna Gopichand Gaekwad Gupta in Life Insurance Corporation of India vs Manish
obtained a Rs 15 lakh insurance policy from Aviva Life In- Gupta said that a contract of insurance involves "utmost
surance Co India Ltd on September 5, 2011. Two years later, good faith", and the failure of the insured to disclose his
his widow, Anita Gaekwad claimed the insurance amount past history of cardiovascular disease is valid ground for
intimating the company that her husband had died on July repudiation.
12, 2013.
The LIC policy was taken by Manish Gupta in June 2008
The insurance company denied the claim saying that its under the category of non-medical general (NMG) insur-
investigation revealed that Gaekwad had died much before ance for a sum of Rs 1.6 lakh. Under the NMG policy, no
the policy was issued. He had died on April 14, 2011, at a medical exam is done and the policy is subject to self-dis-
private hospital and the policy was issued in September closure by the person taking the insurance of the presence
2011. The widow approached the Consumer Dispute or absence of a disease. In the insurance form, Gupta de-
Redressal Forum, Ahmedabad (City) and asked if her hus- nied having any pre-existing heart disease. The next year,
band had been dead before the policy was issued, who he submitted a claim after undergoing a mitral valve re-
signed the policy proposal form. placement (MVR). The claim was denied by the Life Insur-
Did the company not verify details, she asked. The company ance Corporation of India (LIC) on the ground that he was
suffering from a pre-existing illness.
told the consumer court that Gaekwad was known as
Chandan Gopichand Gaekwad. Local police records show 6/ When this decision was challenged before the District Con-
21/2019 that he had a criminal record. He was alcoholic and sumer Disputes Redressal Forum, Ambala, it passed an or-
died in April 2011 due to a heart attack. Anita's election card der in Gupta's favour and directed the LIC to pay him Rs
also reflected her husband's name as Chandan. It was as- 2.21 lakh with interest. This order was upheld first by the
serted Chandan and Munna were the same person. State Consumer Disputes Redressal Commission and later,
After hearing the case, the consumer court said that to the National Consumer Disputes Redressal Commission
(NCDRC). The LIC subsequently moved the apex court.
decide whether Anita had obtained the policy by using
forged documents, a summary trial was needed which the The Supreme Court bench said that the treatment record
consumer court cannot undertake. The consumer court indicated that Gupta was operated on for rheumatic heart
also noticed that there was another policy claim for disease. The bench further noted that in Satwant Kaur
Gaekwad's death, but a day before the judgment, Anita Sandhu vs New India Assurance Company Ltd, the Court
withdrew her complaint. This raised doubts on her claim had held, "Thus, it needs little emphasis that when infor-
and hence her complaint was rejected. mation on a specific aspect is asked for in the proposal

The Insurance Times, July 2019 47