Point of Law : Default in refund of premium amount within a reasonable time will come within definition of 'deficiency' as defined in Rule 13 of Insurance Ombudsman Rules, 2017.

JUDGMENT :

The above writ petition is filed challenging Ext.P4 award passed by the 1st respondent and for a declaration that the 1st respondent has pecuniary jurisdiction to entertain and resolve all complaints relating to insurance policies issued by the insurance companies. The petitioner has also sought other consequential reliefs.

The averments in the writ petition are as follows:-

2. The petitioner's husband died on 11.04.2021 due to Covid. The petitioner's late husband availed a housing loan to the tune of Rs.1,73,00,000/- in November 2018 from the 4th respondent. In order to secure the aforesaid loan from the 4th respondent, the petitioner's late husband had taken two insurance policies apart from the immovable properties owned by him as security for the loan availed of by him. The two policies were taken by the petitioner's husband as insisted by the 4th respondent as a mandatory condition for granting the loan. For the sole purpose of insurance premium funding, the petitioner's late husband opened an account bearing No.637607046 with the 4th respondent. The two insurance policies were subscribed by the petitioner's late husband on 30.11.2018. The Policy bearing No.20910176 has a maturity value of Rs.30 Lakhs and Policy No.20924808 has a maturity value of Rs.1.40 Crores. The premium amount with regard to Policy No.20910176 was also paid on 30.11.2018 by the 4th respondent directly to the 3rd respondent Insurance Company from the loan account No.637607046. The premium amount of Rs.57,931/- was paid on 30.11.2018 by the 4th respondent directly to HDFC Life Insurance Company from loan account No.637607046. It is seen from the transaction history of the aforesaid account with the 4th respondent that the EMI has been collected by the 4th respondent from the account of the petitioner's husband till May 2021. Though the policy as per proposal No.20924808 was taken in November 2018, the Insurance Company for reasons best known to them delayed the issue of a policy against this proposal though the premium was collected. It is the contention that if medical examination was a requirement to be fulfilled for the acceptance of the policy proposal and the issue of the policy, it is beyond comprehension as to the insistence for payment of the premium along with the proposal and the rejection of the same after 2½ years and that too after the death of the assured, and when a claim is made for payment of the amount covered by the policy. The petitioner, on 26.05.2021, went to the office of the 3rd respondent and submitted the claim forms with all proofs for policy No.20910176 and also furnished the details about the second policy in respect of proposal No.20924808. It is only at this juncture that the petitioner was informed that the Insurance Company has not issued the second policy even though the factum of acceptance of the premium amount in 2018 was acknowledged. It is an admitted fact that proposal No.20924808 was for the purpose of covering all the housing loans in case of happening of any unforeseen events. Moreover, it is submitted by the counsel for the petitioner that the Insurance Company did not require the fulfillment of any medical examination with respect to policy No.20910176 and both the policies were proposed on the same date and the premium also was accepted by the Insurance Company on the same date. The policies to which the deceased subscribed were not Health Insurance policies and the death of the assured was due to Covid and not due to any other ailments. On 05.06.2021, as requested by the Insurance Company, all the relevant documents with regard to the above-stated two policies were submitted. On 17.06.2021, the Insurance Company issued an online communication to the petitioner stating that, as per the confirmation received by their team, the application relating to the above proposal No.20924808 was withdrawn, since the requirements were not submitted within the time limit and the Insurance Company offered to initi