Insurers cannot repudiate a claim without establishing a direct causal link between disclosed ailments and the cause of death.

1. This complaint is filed under S.21(a)(i) of the Consumer Protection Act, 1986 (hereinafter ˜Act) alleging deficiency in service by the opposite party in repudiating the life insurance claim of the complainant in respect of her husband who died in a road accident during the currency of a life insurance policy issued by the opposite party.

2. The facts of the case in brief are that the husband of the complaint, late Shri Amaresh Bevinal had obtained a Life Insurance Policy on 5.6.2008 (No. 1200800579746) under the Plan - Metsmart Premium scheme of the opposite party for a whole life unit linked insurance policy for 59 years for a sum of Rs. 1,50,00,000 (hereinafter, ˜the Policy). Premium of Rs. 1,25,000 was payable quarterly. The complainant was the nominated sole beneficiary. Premiums were paid regularly till December 2009, duly acknowledged by the opposite party. The issuance of the policy was preceded by the deceased life assured (hereinafter, ˜the DLA) by medical tests and examination at a nominated medical laboratory / hospital of the opposite party which indicated that he did not have any pre - existing disease. On 20.1.2010 the DLA met with an accident while crossing the road in Gangavati town and suffered head injuries. He was brought to a local hospital and subsequently shifted to Lifeline Hospital, Hubli for treatment where he succumbed to the injuries on 24.1.2010. The complainant submitted a claim for the insurance amount on 2.3.2010 along with supporting documents. The opposite party vide letter dated 10.5.2010 declined to admit liability on the ground that there had been non - disclosure of material facts making the policy void ab initio and refunded the premium of Rs. 8,89,168 received through a demand draft dated 7.5.2010. It was stated that the DLA suffered from Rheumatic Heart Disease with Mitral Stenosis since 2002 and Diabetes Mellitus since 2007 which had not been disclosed in the proposal form dated 28.3.2008. This was contested by the complainant on the grounds that the policy was approved on the basis of pre - issuance tests and therefore needed to be honoured now. The opposite party, however, on 21.6.2010 conveyed that after reconsideration by the Appellate Authority and on the basis of a medical report from Lifeline Hospital, Hubli dated 23.1.2010 the DLAs pre - existing medical condition did not make him eligible for the policy which had accordingly been cancelled and a refund of premium paid provided. The complainant has approached this Commission with the following prayer:
(i) Direct the respondent / opposite party to release the sum assured under Life Insurance Policy No. 1200800579746 issued by it / opposite party to complainant being Rs. 1,50,00,000 with interest @ 18% p.a. from 2.3.2010 (being the date of claim) till the date of payment;
(ii) Direct the respondent to pay the costs of this complaint; and
(iii) Grant such other and further relief as are just and necessary

3. The complaint has been resisted by the opposite party by way of reply. Complainant filed his rejoinder. Parties filed the short synopsis of their arguments. It is contended by the opposite party that the policy was void ab initio since it was violative of the principle of uberrimae fidei or principle of ˜utmost good faith under which it was signed since the DLA did not disclose pre - existing illnesses / diseases. This was discovered during investigation that is mandated under S.45 of the Insurance Act, 1938 as it was a case of early claim, within 2 years. It has been contended that this Commission lacks jurisdiction in the matter as detailed examination by a Civil Court is required and also because there is no negligence