Insurance Company Held Liable Despite Non-Disclosure Claim; Consumer Commission Upholds Concurrent Findings.


14 October 2024 Consumer Law >> Civil & Consumer Law  

In a recent consumer dispute of Branch Manager, Tata Aig Life Insurance Co. Ltd., West Bengal & Another v/s Suvankar Sen, the National Consumer Disputes Redressal Commission (NCDRC) dismissed a revision petition filed by TATA AIG Life Insurance Co. Ltd., upholding the concurrent findings of the District Consumer Disputes Redressal Forum, Bankura, and the State Consumer Disputes Redressal Commission, West Bengal. The case centered on the repudiation of a life insurance claim based on alleged non-disclosure of pre-existing medical conditions.

The complainant, Suvankar Sen, filed a complaint after the insurance company denied the death claim of his mother, Mrs. Arati Dey Sen, who had a life insurance policy with a sum assured of Rs. 1,50,000. The insurance company argued that Mrs. Sen had failed to disclose her pre-existing medical conditions, including hypothyroidism and a history of nosebleeds, at the time of policy application. They cited a hospital consultation ten days prior to the policy application as evidence.


 

 

However, the consumer forums found that the proposal form was filled by the insurance company’s agent, not the deceased. They also noted that the hospitalization cited by the insurer occurred after the policy application. The State Commission further emphasized the insurance company’s vicarious liability for the actions of its authorized agent, stating that the agent should have ensured accurate information was provided.

The NCDRC, in its ruling, acknowledged the limited scope of its revisional jurisdiction, emphasizing that it should only interfere with concurrent findings in cases of patent illegality, material irregularity, or jurisdictional error. The commission cited several Supreme Court judgments, including Rajiv Shukla v. Gold Rush Sales & Services Ltd. and Mrs. Rubi (Chandra) Dutta Vs. M/s United India Insurance Co. Ltd., which reinforce the principle of judicial restraint in revisional matters.

In this case, the NCDRC found no such errors warranting interference. The commission considered the unique circumstances, including the fact that the proposal form was filled by the agent and that the primary medical condition cited for repudiation was not clearly established as a fundamental breach.

Consequently, the NCDRC dismissed the revision petition, upholding the District Forum’s order with a modification regarding the interest rate. The insurance company was directed to pay the sum assured with 9% interest per annum from one month after the repudiation letter (dated August 6, 2013) until realization, within eight weeks. Failure to comply would result in an increased interest rate of 12% per annum.

This ruling underscores the importance of agent accountability and the limited scope of revisional jurisdiction in consumer disputes. It also reinforces the principle that insurance companies cannot avoid liability for the actions of their authorized agents and that minor non-disclosures may not always warrant claim repudiation.