Case laws or Judgements

Case laws or Judgements

IRDA - Case laws or Judgements
Here are some typical cases where policyholders made complaints to Ombudsman and the judgements in those cases. The reasons for the complaints, the findings of the cases and the basis for the judgements all throw light on the various aspects of such cases and underline the importance of documentation and declaration of material facts on the part of the policyholder.

S.No. Ombudsman Reference Case No. Brief facts of the case Findings of the case Decision
1. Bhubaneswar 21-002-0217 Insurer alleging suppression of material fact concerning health and pre-existing illnesses by the Life Assured Insurer could not prove beyond doubt that the Life assured suffered from serious illnesses before taking the policy. Insurer was directed to settle the claim within one month from the receipt of the consent letter.
2. Ahmedabad 21-001-0314 While taking the policy the life assured had informed in great detail the state of his health and habits due to which several Special Reports were called for and the proposal was accepted with extra premium. The life assured died within ten months from the date of proposal. The claim was repudiated on the grounds of suppression of material facts on the basis of certificate of treatment, prescription, letters of doctors and hospital. It was observed that all the diagnosis/treatment commenced after 7 days from the date of acceptance of risk. All the documents proved that the deceased was not aware of his ailment at the time of taking the proposal. The respondent (the insurer) was directed to pay the full claim amount.
3. Bhopal L.I-1025-21/09-07/IND The deceased life assured had produced voter I.D Card as age proof and the agent filled up the proposal form. It was an early claim. Date of Birth mentioned was 1-1-1950. His actual Date of Birth was 1-8-1943 and was working as postman in postal department. Had he declared his correct age, the proposal would not have been accepted. He had deliberately understated his age. The deceased was a government servant and deliberately understated his age to defraud the respondent (Insurer), in order to accept the proposal and there by misled the respondent in taking proper underwriting decision. The decision taken by the respondent (Insurer) in repudiating the claim is just and fair and hence does not require any interference. Therefore the complaint is dismissed without any relief.
4. Chandigarh HDFC/397/Mumbai/Hissar/21/07 Insurer alleged that it was a case of suicide as per complaint of the father of the diseased to police; hence suicide clause applies and nothing is payable. The claim was repudiated. The father was not present at the scene of the death. No suicide note was found. Chemical analysis did not find any poison in the body. Post Mortem report also did not find any poison in the body. The report of Panel of doctors did not confirm that death was due to consumption of poison. Held that the sum assured of Rs. 5 lakhs along with accrued bonus if any be paid to the nominee/complainant.
5. Chennai IO(CHN)/21.003.2264 The insurer alleging non disclosure of material fact of suffering from Acute Lymphoblastic Leukaemia (ALL) with relapse with refractory disease in the proposal form and hence the claim is repudiated. The deceased had been undergoing treatment for ALL since 2000 and he underwent Orchidectomy for relapse in 2003. Did not disclose this in proposal form submitted in Dec 2005 There is clear medical evidence to show that the deceased was suffering from Leukaemia well before signing the application for insurance. Hence the complaint is dismissed and the decision of the insurer was upheld.
6. Chennai IO(CHN)/21.006.2420 The deceased life assured had not disclosed that he had suffered from pulmonary TB with Haemoptysis in his proposal form. The claim was repudiated by the insurer on the grounds of non-disclosure of material facts. The life assured had suffered from TB and did not mention the same in the proposal form since he thought that TB is curable. The discharge record of K.T.V.Medical foundations clearly mentioned that the policyholder was a case of Cirrhosis of liver, old pulmonary TB with Haemoptysis. The complaint was dismissed and the decision of the insurer in repudiating the claim was upheld.
7. Chennai IO(CHN)/21.05.2544 The life assured (lady) lapsed her policy and it was revived with Declaration of Good Health (DGH) on 9.1.2005. The actual date of maturation was 7.12.2004 where as it was mentioned in DGH as 29.12.2004. The revival of policy was done on 10.1.2005 and the life assured died on 19.5.2005. Insurer repudiated the claim on the basis of suppression of material fact in DGH. The life assured died within 4 months from the date of revival. Did not disclose that she had Caesarian operation in 2000. She had miscarriage during 2nd and 3rd month of second pregnancy. At the time of death she was pregnant. Had she declared the date of last menstruation as 7.12.2004, the insurer would have postponed the revival of the policy. She died of pregnancy related complications. The complaint was dismissed since there was wrong information about her date of last menstruation and insurer was deprived of the opportunity of assessing the risk properly. Had it been declared correctly, the insurer would have postponed the revival.
8. Chennai IO(CHN)/21.03.2616 A man his wife and her brother were travelling in a two- wheeler from Kinathu Kadavu to Pollachi at night. Three people were travelling in a two-wheeler and they met with an accident. The Wife and her brother died in the accident. The insurer refused to pay the accident benefit sum assured since the accident was caused due to breach of law. The FIR and PIR had concluded that it was breach of law since 3 people were travelling in a 2-wheeler in which only 2 are allowed to travel. Though the life assured was only pillion rider, she was travelling as one of the passengers on the Motor Cycle (as per the MV Act only two persons are permitted), which amounts to breach of law. The complaint was dismissed on the ground that the accident happened and death occurred due to breach of law and insurer is correct in repudiating the Accident Benefit SA.
9. Chennai IO(CHN)/21.02.2648 The life assured submitted proposal on 30.3.2005. Policy commenced from 28.3.2005. The life assured died of road accident on 13.5.2005. The insurer refused to pay accident sum assured since the life assured was under the influence of alcohol at the time of accident. The claimant argued that the life assured was not driving the vehicle and hence the double accident benefit claim cannot be rejected. The insurer contended that as per Medico-Legal-Manual if the alcohol content is 100 to 300 MG % the person would have some mental confusion, emotional instability, loss of critical judgment, impaired memory, sleeplessness, slowed reaction time, loss of muscular coordination etc. As the policy conditions of DAB, if death of the life assured is caused by intentional self injury, attempted suicide, insanity or immorality or when the life assured is under the influence of intoxicated liquor, drug or narcotic, the insurer is not liable to pay the additional sum assured. The complaint was dismissed since the forum did not wish to interfere with the policy conditions.
10. Hyderabad L-21-009-0438-2006-07 Death claim under ULIP policy. The insurer produced the evidence, which proved that the life assured was under the treatment of High BP prior to the issue of the policy. Due to non disclosure of the material fact the SA claim was repudiated. The life assured is suffering from Hypertension. Did not disclose in the proposal form. Life assure died within 9 months from the date of commencement of the policy. The sum assured under the claim was repudiated. The decision of the insurer was upheld since there was suppression of material facts. Since the policy has the provision for savings, the insurer was ordered to pay the investment portion (Fund Value).

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