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DEBANGSU BASAK
Life Insurance Corporation of India – Appellant
Versus
Insurance Ombudsman – Respondent
Certainly. Based on the provided legal document, here are the key points:
An insurance company cannot challenge an award issued by the Insurance Ombudsman under the Redressal of Public Grievances Rules, 1998. Such awards are final and binding, and the Rules do not provide for an appeal or challenge by the insurer (!) .
The duty of disclosure of material facts by the insured is not breached when the information is available to the insurer, even if not explicitly disclosed by the insured in the proposal form. The insurer is deemed to have knowledge of such material facts if they are accessible through its agents or records (!) (!) (!) .
The concept of "material facts" is broadly understood to include any information that would influence an insurer’s decision to accept or reject a risk or to determine the premium. The failure to disclose such facts, especially when they are known or available to the insurer, can lead to repudiation of the insurance contract (!) (!) .
The legal requirement for the insured to fill out proposal forms truthfully and completely is emphasized. Non-disclosure of existing policies or relevant information, when such information is accessible to the insurer, may not be considered suppression or misconduct if the insurer is deemed to already possess that information (!) (!) .
The Rules of 1998 and the associated circulars of the regulatory authority strongly advocate for insurers to honor the awards of the Insurance Ombudsman within specified timeframes, and they do not recognize a challenge to such awards by the insurer as permissible under the rules (!) (!) (!) (!) .
The court’s decision underscores that the insurer’s challenge to the Ombudsman’s award is not maintainable, and the insurer is directed to settle the claim in favor of the nominee, emphasizing the importance of adhering to the dispute resolution mechanism established under the Rules of 1998 (!) (!) (!) .
The case highlights that the insurer’s failure to act in good faith or to disclose material facts, especially when such facts are known or accessible, can invalidate the repudiation of policies and lead to the insurer being directed to settle claims promptly (!) (!) .
Please let me know if you need a more detailed analysis or specific legal advice related to this case.
1. An insurance company assails an award of the Insurance Ombudsman passed on October 23, 2015.
2. Learned Senior Advocate for the petitioners contends that, the insured is guilty of suppressing material facts while applying for life insurance policies. He refers to the nine policies of the insured. He submits that, material portions of the five policies were not filled up with appropriate facts. The insured not having acted in utmost good faith at the time of applying for the policies, the insurance company is within its rights to repudiate the contract of insurance. In support of such contention he relies upon Section 45 of the Insurance Act, 1938 and 2008 Volume 1 Supreme Court Cases page 321 (P.C. Chacko & Anr. v. Chairman, Life Insurance Corporation of India & Ors.) as well as 2009 Volume 8 Supreme Court Cases page 316 (Satwant Kaur Sandhu v. New India Assurance Company Limited).
3. Referring to the point of maintainability of a writ petition by an insurance company against an order passed by the Insurance Ombudsman, learned Senior Advocate for the petitioners relies upon an unreported decision of the Andhra Pradesh High Court rendered in W.P. No. 21044 of 2005 (Birla
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