Page 52 - The Insurance Times April 2025

ered to the intended recipient due to the return of the Case Title: Sushila Singh vs. Birla Sun Life Insur-
envelope with the message "address incomplete." Vishnu ance Co. Ltd. and Anr.
B. Madan Patil, representing the claimants, argued that
proper notification of the policy cancellation was required Summary
and that stringent proof that the insured received such The National Consumer Disputes Redressal Commission
notification was required. (NCDRC) dismissed an appeal against Birla Sun Life Insurance
Co. Ltd., the spouse of Sushila Singh, who had a life insur-
The insured's prior insurance policy came to an expiration
ance policy with the company. The complaint was not eli-
on February 22, 2015. On December 12, 2015, the insured
submitted a cheque for policy renewal. The disaster tran- gible for reimbursement due to the deceased husband's
spired on March 28, 2015. The notice of policy revocation neglect to provide important health information about his
was attempted to be delivered on March 12, 2015; how- health. The insurance company argued that the reinstate-
ever, it was unsuccessful due to an incomplete address. The ment of the policy was justified by the deceased husband's
signed Certificate of Insurability (COI), which declared the
court made reference to the ruling in United India Insur-
ance Co. Ltd. v. Laxmamma and Ors., in which the Supreme absence of any illness or damage.
Court underscored the criticality of the insurer canceling the The NCDRC denied the complaint, stating that the insured's
policy and notifying the insured of this cancellation prior to kidney condition was reported to the advisor but not men-
the occurrence of the disaster in order to absolve the in- tioned in the revival form. The NCDRC received an appeal,
surer of liability. stating that the late husband died due to a medical issue
Furthermore, in reference to Section 64-VB of the Insurance he neglected to disclose during the policy reinstatement
Act, the court emphasized that prior payment of the pre- process. The NCDRC affirmed the State Commission's ruling,
mium is required before assuming any risk. The court made stressing the importance of the insurance contracts' require-
a distinction between the present case and National Insur- ment of the highest good faith and underlining the insur-
ance Co. Ltd. v. Seema Malhotra and Ors., elaborating that ance company's prerogative to reject a claim in the event
the latter case pertained to a third-party claim under ben- that crucial information is withheld.
eficial legislation, and the claimants were passengers in the About the case
vehicle rather than the owners or drivers. As a result, the AVM J. Rajendra, a member, and Subhash Chandra, the
case was not directly pertinent.
presiding member of the National Consumer Disputes
The court reached the determination that the appellant Redressal Commission ("NCDRC") bench, dismissed an ap-
neglected to present evidence that the insured was duly peal against Birla Sun Life Insurance Co. Ltd. submitted by
notified of the policy cancellation prior to the occurrence of the complainant, who was her deceased husband's nomi-
the accident. The court rejected the appeal on the grounds nee. The NCDRC emphasized the value of good faith in in-
that it was without merit, considering the rights of third- surance agreements and determined that the complaint
party claimants as stipulated in the Motor Vehicles Act, was not eligible for a reimbursement since the deceased
which is a statute of benefits. The court drew upon the rul- husband neglected to provide Birla Sun Life Insurance Co.
ing of the Apex Court in Oriental Insurance Co. Ltd. v. Inderjit with important information about his health. The spouse of
Kaur & Ors., which established that in accordance with the Sushila Singh ("Complainant") had a life insurance policy with
beneficial legislation, the insurance company is obligated to
Birla Sun Life Insurance Co. Ltd. ("Insurance Company"),
provide compensation when the claim is brought by a third insuring him for a death benefit of Rs. 50,00,000. The policy
party. As a result, the court dismissed the appeal, conclud- had an annual premium of Rs. 25,524.
ing that there was insufficient evidence to necessitate in-
terference with the tribunal's findings. The court permitted Due to non-payment of premiums, the policy terminated in
the claimants to withdraw the entire amount, including 2012; nevertheless, it was renewed in 2013 following the
accrued interest, that the appellant had deposited. Complainant's husband's kidney disease diagnosis. During
reinstatement, the insurance advisor neglected to record
The rejection of a claim for coverage can this health information. Regretfully, the complainant's spouse
passed away in 2013, and the insurance company rejected
result from the failure to disclose material the claim.
facts; the NCDRC has dismissed an appeal
Enraged, the Complainant lodged a consumer complaint
against Birla Sun Life Insurance Co. Ltd. with the Bihar State Consumer Disputes Redressal Commis-

The Insurance Times April 2025 47