IMPORTANT POINT
A nominee under a policy of insurance is rightful claimant of benefits under the policy—Under Insurance Act, 1945, nominee is recognized as a beneficiary for all benefit which the policy provides subject to various stipulations.

ORDER

This Consumer Complaint under section 21 (a) (i) of the Consumer Protection Act, 1986 (in short, ‘the Act’) alleges deficiency in service in denying a claim under the life insurance policy issued by the Opposite Party in respect of the deceased son of the Complainant, who is the mother and nominee of the Policy Holder.

2. Briefly stated, the facts are that the Deceased Life Assured (DLA), Vijay Kumar S/o. Mr. Babulal Verma, held a Life Insurance Policy No. 52392026 dated 14.10.2015 issued by the Opposite Party for a sum of Rs.1,00,00,000/-. The benefit payable was Rs.1,00,00,000/- or 10 times the annualised premium or 105% of the premium paid as on date of death excluding extra premium, if any, in case of death. The Policy was issued after a medical fitness examination conducted by the Opposite Party. The DLA who was an employee of the Oriental Bank of Commerce met with a road accident on 27.10.2015, while driving a two wheeler, when he was found lying injured on the road in an unconscious state due to head injuries. He was taken to Government Hospital and was provided first aid at Government Hospital, Karnal followed by admission to Arvinda Hospital, Karnal and subsequently, shifted to Medanta Hospital, Gurgaon where he expired on 09.11.2015.

3. The Insurance Company was informed on 15.12.2015 and a claim of insurance was submitted by the Complainant, as the nominee of the DLA. Following investigations, since the claim was filed within the two year period from the date of issue of the policy, opposite party vide letter dated 07.05.2016 informed that the claim could not be considered on the ground that the DLA had not disclosed the fact that he had met with an accident one year prior to obtaining the policy in the proposal form and had suffered a concussion injury to the head and had, therefore, misled the Opposite Party to grant insurance cover in the said policy. The Complaint was repudiated in terms of section 45 of the Insurance Act, 1938.

4. The Complainant has alleged deficiency in service on part of the Opposite Party and submitted that the deceased was also covered by other policies of the Life Insurance Corporation of India (LIC) and his accidental death claim has been settled by the LIC without any objection. It is submitted that since the DLA had paid required premium, the nominee was entitled to receive the benefit of the policy. The Complainant is, therefore, before this Commission with the prayer that the Opposite party pay the complainant as the nominee of the DLA Rs.2,00,00,000/- for his accidental death, Rs.50,000/- for harassment and cost of Rs.51,000/- towards litigation charges along with any other relief deemed fit.

5. The complaint was resisted by way of filing of a Written Statement by the Opposite Party. The grounds contended are that (a) the policy was a contract of insurance based on uberrimae fidei (‘utmost good faith’) on the part of DLA who had withheld disclosure of material facts with regard to an concussion accident suffered by him one year prior to the policy in which he suffered a concussion injury in the head; (b) the claim was preferred within one month and seven days from the commencing of the policy and, therefore, under section 45 of the Insurance Act, 1938, the Opposite Party was mandated to investigate the genuineness of the claim; (c) the DLA’s past medical history of head injury due to road accident one year prior to the policy was a material fact that had not been disclosed in the proposal form and (d) under regulation 2(1)(d) of the Insurance Regulatory and Development Authority (Protection of Policy Holders Interests’) Regulations, 2002, the proposal form for a policy required disclosure of all important, essential and relevant information in the context of underwriting the risk to be covered. It was submitted that the complainant had inflated the claim for accidental death since the policy did not provide for Rs.2 crores in case of accidental death but was only for Rs.1 cror