The nominee in an insurance policy can claim as a consumer even without direct contract; full disclosure of material facts is crucial in insurance underwriting.

JUDGMENT

AVM JONNALAGADDA RAJENDRA, AVSM VSM (Retd.), MEMBER

1. The present Consumer Complaint has been filed under Section 21 of the Consumer Protection Act, 1986 (for short “the Act”) against the Opposite Parties with the following prayer:

“a) To hold and declare the opposite parties to be guilty of deficiency in service and unfair trade practice as per the provisions of the Consumer Protection Act,1986

b)To direct the opposite parties to pay Rs. 78,47,595 lacs out of 90 lakhs sum assured (Rs. 11,52,405/- being already paid) of the policy namely ICICI Pru Elite Wealth-II, Unit Link Insurance Plan through its Policy No. 19620019 IPRU to the complainant along with interest @ 18% p.a till its realization

c) To direct the opposite parties to the complainant a sum of Rs. 15,00,000/- towards compensation for the inconvenience and harassment experienced by the family members of the complainant due to the deficiency in service.

d) To direct the Opposite Parties to pay the complainant sum of Rs. 10,00,000/- towards the legal and incidental expenses incurred by the complainants.

e) For such other and further reliefs as this Hon’ble Commission may deem fit and proper in the nature and circumstances of the above numbered complaint.”

2. Brief facts, as per the complaint, are that Complainant‟s husband, Late Dhananjay Bhanudas Deshmukh, had purchased an ICICI PRU Elite Wealth–II (Unit Linked) Policy No. 19620019 IPRU, on 02.12.2015 for a term of 10 years, with a sum assured of Rs. 90,00,000. The first premium of Rs. 9,00,000 was paid and acknowledged vide Receipt No. F1707374 dated 02.12.2015. The policy was positioned as a wealth- cum-life cover plan, intended to provide long-term wealth creation along with full risk coverage.

3. The life assured unfortunately passed away on 15.08.2016 at Lilavati Hospital, and the death certificate was issued on 19.08.2016. The Complainant thereafter collected all requisite documents, including hospital papers, medical records, employer certificate, and policy documents, and submitted the claim in March 2018. To her shock, a letter dated 30.03.2018 was issued by OP-2 repudiating the death claim on the alleged ground of non-disclosure of past medical history by the Deceased Life Assured (DLA). It is the case of the complainant that the repudiation was unjustified, as the OP insurer attempted to apply to its case, the standards meant for Health Insurance policies, whereas the present product was a Wealth policy, for which entirely different insurance underwriting norms are to be applied. It is further her case that her husband was medically stable at the time of taking the policy and he was actively employed and, in any case, her husband had no intention to suppress any information with respect to his health. Even if any omission occurred, it was entirely inadvertent and not material to the claim in any manner. Despite receiving a detailed legal notice dated 23.04.2018, the OP insurer failed to reconsider its decision and, instead unilaterally deposited Rs.11,52,405.05 on 06.04.2018 in the account of the Complainant, describing it as surrender value, which the Complainant submits is entirely without legal foundation and violative of the terms of contract entered into between the parties. The Complainant contended that the policy in question carried risk coverage of her husband right from inception, the death was natural, and no exclusion clause was attracted. The insurer failed to conduct any fair inquiry or provide the Complainant an opportunity to b