Page 54 - The Insurance Times August 2024

Insurance Caselaws

NCDRC Orders Reliance Life Insurance About the case
Company To Pay Rs 1 Crore And 50k Reliance Life Insurance Company was recently ordered by
the National Consumer Disputes Redressal Commission
Litigation Costs. (NCDRC) bench, which is presided over by Subhash Chandra,
to reimburse the nominee of the deceased life assured (DLA)
Nirmala Devi vs Reliance Life Insurance Com for the sum of Rs. 1 crore, plus Rs. 50,000 for litigation costs.
Summary The insurance company claimed that the deceased
policyholder had omitted important evidence from the
The National Consumer Disputes Redressal Commission
proposal form, but the NCDRC rejected that claim. The
(NCDRC) has ordered Reliance Life Insurance Company to
NCDRC emphasized that hospitalization for a car accident
reimburse the nominee of the deceased life assured (DLA)
for Rs. 1 crore, plus Rs. 50,000 for litigation costs. The that was not disclosed on the application form does not
insurance company claimed that the deceased policyholder imply that a prior illness or disease was hidden.
had omitted important evidence from the proposal form, Nirmala Devi, also known as the "Complainant," was Vijay
but the NCDRC rejected that claim. The NCDRC emphasized Kumar Verma's (dead) candidate. On October 14, 2015, her
that hospitalization for a car accident that was not disclosed son, who works for Oriental Bank of Commerce (OBC),
on the application form does not imply that a prior illness bought a Rs. 1 crore life insurance policy from Reliance Life
or disease was hidden.Nirmala Devi, the complainant, was Insurance Company (the "Insurance Company"). Following
Vijay Kumar Verma's (dead) candidate. She filed an insurance an assessment of medical fitness performed by the insurance
claim for the accidental death benefit with the insurance provider, the policy was issued. Sadly, on October 27, 2015,
company after her son's death, but the claim was denied. the complainant's kid suffered serious head injuries in a car
accident. He was given medical attention, but on November
The insurance company accused the company of providing
inadequate service and that the complainant could not 9, 2015, he passed away. The complaint filed an insurance
qualify as a "consumer" under the customer Protection Act claim for the accidental death benefit with the insurance
since they were not beneficiaries under the insurance company after he passed away, but the claim was denied.
policy.The NCDRC refuted the claim, stating that the The National Consumer Disputes Redressal Commission
nominee under an insurance policy is the legitimate ("NCDRC") received a consumer complaint from the
recipient of the benefits under the policy. The NCDRC also aggrieved party.
noted that the purpose of the complainant's son's medical The insurance firm was accused by the complainant of
examination was to find out about any pre-existing providing inadequate service. She contended that since her
conditions, and that failing to disclose a prior auto accident son, the policyholder who passed away, had paid the required
did not constitute fraudulent concealment. The insurance payment, she should be eligible to get the policy's benefit.
company was ordered to pay the complainant Rs. She further mentioned that her son was insured by various
1,00,00,000, which is equal to ten times the annualized Life Insurance Corporation of India (LIC) policies, and that LIC
premium or 105% of the premium paid as of the date of had settled her son's accidental death claim without raising
death, plus interest at the rate of 9% per year starting from any issues. She demanded Rs. 50,000 for harassment, Rs. 2
the date the claim was submitted. crores for accidental death, and Rs. 51,000 for legal fees.

The Insurance Times August 2024 49