IMPORTANT POINTS
(1) The Principle of Uberrima Fides (Utmost Good Faith) – The Commission reiterated that the relationship between an insurer and the insured is founded on mutual trust. The insured is under a “solemn obligation” to make a full and true disclosure of all material facts. A “material fact” is defined as any information that would influence the mind of a prudent insurer in deciding whether to accept the risk and at what premium.
(2) Materiality of Pre-existing Conditions – The Commission found that the insured’s previous hospitalization for Percutaneous Transluminal Coronary Angioplasty (PTCA) and chronic hypertension were undeniably material. By specifically answering “No” to questions regarding heart disease and past hospitalizations in the Member Consent Form, the insured prevented the insurer from accurately assessing the risk on his life.

ORDER :

Dr. Sudhir Kumar Jain, J.—Briefly stated relevant facts as per the complaint are that Late Jagdish Patel (hereinafter referred to as “the insured”) who was husband of the appellant no.1/the complainant no.1/Rajkumari Patel and father of the appellants no 2 to 5/the complainants no 2 to 5 (hereinafter referred to as “the appellants”) took a loan of Rs.30,00,000/- from the respondent no. 2/the opposite party no. 2/Chola Mandalam Investment & Finance Company Limited (hereinafter referred to as “the respondent no 2”) during his lifetime vide loan account number HE01DHT00000030231. The insured to secure the said loan procured insurance policy bearing policy number 61249366 with coverage period from 03.09.2022 to 03.09.2025 from the respondent no.1/opposite party no.1/ICICI Prudential Life Insurance Company Limited (hereinafter referred to as “the respondent no 1”) through the respondent no. 2. The insured paid single premium amounting to Rs.54,757/- with ICICI Pru Policy No D-6690809. The insured during the subsistence of the policy passed away on 17.02.2023 due to brain haemorrhage. The outstanding loan amount was to be paid by the respondent no 1 to the respondent no 2 as per terms and conditions of the insurance policy. The appellant no 1 after demise of the insured submitted insurance claim to the respondent no 1 for payment of the balance loan amount to the respondent no. 2. The respondent no. 1 vide letter dated 30.06.2023 repudiated the claim of the appellant no. 1 without valid justification. The respondent no. 2 did not take any appropriate action against the respondent no. 1 for wrongful repudiation of the claim which constituted gross negligence as the insurance policy was arranged through the respondent no. 2 from the respondent no. 1. The respondent no. 2 even after the death of the insured collected two monthly instalments from the appellants and the outstanding loan amount as on 10.08.2023 was Rs.31,10,054/-. The respondent no 2 sent a legal notice dated 10.07.2023 to the appellants on 07.11.2023 for recovery of outstanding loan amount which amounts to deficiency in service on the part of the respondents. The appellants being aggrieved filed the present consumer complaint bearing no CC/23/64 titled as Rajkumari & others V ICICI Prudential Life Insurance Company Limited & another before the District Consumer Disputes Redressal Commission, Dhamtari (hereinafter referred to as “the District Forum”) wherein prayed that the outstanding loan amount be paid besides payment of compensation and litigation expenses.

2. The respondent no. 1 filed reply before the District Forum wherein denied averments as stated in the complaint. The respondent no 1 stated that the respondent no 1 received Member Consent Form dated 30.09.2022 from the insured in respect of the Group Insurance Policy known as ICICI Pru Super Protect Credit for a single premium of Rs.54,757. The respondent no 1 based on information provided in the Member Consent Form issued a Group Policy bearing Member ID number D6690809 on 14.10.2022 in favour of insured and the respondent no 2 was policy holder. The appellant no 1 was named as nominee. The respondent no 1 received Claimant Statement Forum on 25.04.2023 whereby it was informed that the insured had expired on 17.02.2023 due to brain haemorrhage. The insured has died within 04 months from date of issuance of policy and as such subject policy had fallen in the category of an Early Claim. The respondent no 1 due to this reason has conducted claim investigation to verify the genuineness of the claim. It was revealed during investigation that the insured was admitted in NHMMI Narayana Multispecialty Hospital on 25.03.2019 and had undergone percutaneous transluminal coronary angioplasty (PTCA) to left anterior descending artery. The insured was also a known case of hypertension. The respondent no 1 was constrained to repudiate claim of the appellants due to misrepresentation of material information which was co