IMPORTANT POINT
In case of any misstatement or suppression of material information company has right to repudiate claim.

V.K. Jain, Presiding Member—Late Shri Rajeev Jain, son of the complainant/respondent obtained a life insurance policy from the petitioner ICICI Prudential Life Insurance Co. Ltd., for a sum of Rs. 25.00 lacs. Shri Rajeev Jain died on 27.12.2006 during subsistence of the aforesaid policy. Being his nominee, the complainant applied for payment of the insured amount to her. The claim lodged by her however, was repudiated by the petitioner company on the ground that while submitting the proposal form, the insured had concealed the fact that he had applied for several other life insurance policies. It was further stated in the repudiation letter that the aforesaid information, except to the extent of two LIC policies, worth Rs. 2.00 lacs was not disclosed by the insured even when, petitioner company, vide its letter dated September 15, 2006 asked for the details of the previous insurance policies with other companies, along with the terms of acceptance. Being aggrieved from repudiation of the claim, the complainant approached the State Commission by way of a complaint, seeking payment of the policy amounting to Rs.25.00 lacs, along with compensation amounting to Rs.5.00 lacs and cost of litigation amounting to Rs.22,000/-.

2. The complaint was resisted by the petitioner company on the same grounds on which the claim was repudiated. It was pointed out in the reply that as per the terms contained in the proposal form submitted by the insured, the petitioner company had a right to repudiate the claim under the policy in case, any misstatement or suppression of material information was found. It was further submitted in the reply that in the proposal form, the insured had stated by writing NA (Not Applicable) against the relevant column, that he had neither obtained nor applied for any policy, as on the date of proposal i.e. September 4, 2006. Later on, when the claim was verified, it came to be known that in addition, two policies taken form LIC, the deceased had also taken one policy for Rs.25.00 lacs from Reliance Life Insurance Co. Ltd., and five policies from ING Vysya Life Insurance. The insured had thus applied for life insurance covers to the extent of Rs.57.00 lacs. It was also pointed out that the applications to Reliance Life Insurance Co. Ltd., ING Vysya Life Insurance and the petitioner company were submitted within a span of 27 days. It was claimed that the information as regards the other policies taken or applied by the proposer materially impacts the Underwriting decision of the insurance company and as a result of the aforesaid concealment by the insured; the petitioner company was denied an opportunity to evaluate the risk in a true and correct perspective. Thus, according to the petitioner company, the contract of insurance was obtained by the insured on the basis of the mis-representation and suppression of material facts. It was also alleged in the reply that the insured being an educated person was well in a position to read and understand the details given by him in the proposal form, a copy of which was later sent to him, along with policy document. However, he did not approach the petitioner company, claiming any inaccuracy in the information recorded in the proposal.

3. Vide its order dated 26.04.2010, the State Commission allowed the complaint and directed the petitioner company to pay a sum of Rs.25.00 lacs to the complainant, along with interest on that amount @ 6% per annum. The petitioner was also directed to pay Rs.20,000/- as cost of litigation to the complainant. Being aggrieved form the order passed by the State Commission, the insurance company is before this Commission, by way of this appeal.

4. A perusal of the proposal form submitted by the insured on 04.09.2006 would show that he was asked, inter-alia to disclose all the life insurance policies held / applied with the ICICI Prudential Life Insurance Co. Ltd./other companies. The insured wrote NA (Not Applicable) in the space earmarked in the f