1. Life insurance claim repudiated for non-disclosure of pre-existing health conditions, including atypical LRTI, hypertension, diabetes, and rheumatoid arthritis. (Para 3 , 4 , 10 , 11 , 12 , 13 , 14 , 15 )
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2026 Supreme(Online)(SCDRC) 1563
STATE CONSUMER DISPUTES REDRESSAL COMMISSION
G. Radha Rani, President, Meena Ramanathan, Member
Bharti AXA Life Insurance Company Limited – Appellant
Versus
Ankam Yadagiri – Respondent
F.A.No. 455 OF 2023
Advocates:
For the Appellants/Petitioners: Manav Gecil Thomas
For the Respondents: K. Srinivas
For the Appellants/Petitioners: Manav Gecil Thomas
For the Respondents: K. Srinivas
Insurance is a contract of 'Uberrimae fides'; suppression of material health facts in the proposal form entitles the insurer to repudiate the claim. Signing the proposal form adopts the answers provided, regardless of whether an agent assisted in filling it.
Headnote:(A) Consumer Protection Act, 2019 - Section 2(8) - Insurance Act, 1938 - Section 45 - Contract Act, 1872 - Repudiation of insurance claim - Suppression of material facts - Principle of Uberrimae Fides - The insurance contract is one of utmost good faith; the insured is under a solemn obligation to make full disclosure of all material facts to the insurer. Non-disclosure of pre-existing medical conditions (Atypical LRTI, hypertension, diabetes, and Rheumatoid Arthritis) in the proposal form constitutes suppression of material facts, rendering the contract voidable at the option of the insurer. (Paras 16, 18)
(B) Proposal Form - Responsibility of the insured - A person who signs a proposal form containing untrue statements cannot escape the consequences by pleading that the agent filled the form or that they did not read it. The agent becomes an amanuensis of the insured, and the act of signing adopts the answers as those of the insured. (Para 19)
(C) Nexus - Existing auto-immune diseases and respiratory infections - In cases of Covid-19, pre-existing conditions like Atypical LRTI and Rheumatoid Arthritis can compromise immunity and increase susceptibility to severe respiratory infections, establishing a direct bearing on the underwriting risk. (Para 17)
Facts of the case:
The complainant's wife had taken a life insurance policy. After her death due to Covid-19, the claim was repudiated by the insurer on the grounds of non-disclosure of material health information. The District Commission allowed the complaint in part, directing payment of the sum assured. The insurer appealed, stating that the deceased had suppressed her prior history of hypertension, diabetes, and Rheumatoid Arthritis.
Findings of Court:
The medical records from Aditya Hospital confirmed a diagnosis of Atypical LRTI, hypertension, and Rheumatoid Arthritis prior to the policy issuance. The life assured had answered the health-related questions in the proposal form in the negative, which was a false declaration.
Issues: Whether the repudiation of the claim was justified due to the suppression of material health facts and whether the agent's role in filling the proposal form absolves the insured.
Ratio Decidendi: The court held that insurance contracts are governed by the principle of "Uberrima fides". Since the insured suppressed material facts that would have affected the underwriting risk, the repudiation was valid. The signatures on the proposal form bind the insured to the accuracy of the answers, regardless of whether an agent assisted in filling the form.
Result: Appeal allowed.
Legal Category Hierarchy
Table of Contents
2. Insurer contends suppression of material facts justifies repudiation; complainant disputes the suppression and alleges deficiency in service. (Para 3 , 4 , 7 , 12 , 13 )
3. Court found medical records proved pre-existing illnesses were concealed; no evidence the agent was informed; suppression was material and there was nexus with death. (Para 10 , 11 , 12 , 13 , 14 , 15 , 16 , 17 , 18 , 19 )
4. An insurance contract is uberrimae fidei; non-disclosure of material health facts renders the contract voidable, entitling insurer to repudiate. (Para 16 , 18 , 19 )
5. Appeal allowed; order of District Commission set aside; insurer permitted to withdraw deposited amount with accrued interest. (Para 1 , 21 )
6. Does non-disclosure of material health information in an insurance proposal form justify repudiation of the policy?
Yes. The contract of insurance is uberrimae fidei, requiring the insured to disclose all material facts. Suppression of pre-existing health conditions, even if unrelated to death, makes the contract voidable at the insurer's option. (Para 16 , 18 , 19 )
7. What is the legal effect of signing a proposal form with negative answers when the insured claims the agent filled it without explanation?
Signing the proposal form makes the answers one's own; the insured cannot escape liability by claiming the agent wrote the answers without explaining. The agent acts as the insured's agent in filling the form. (Para 19 )
8. Is there a nexus requirement between the suppressed illness and the cause of death for repudiation?
Yes, but here the nexus existed. Pre-existing respiratory and autoimmune conditions were material to underwriting and increased susceptibility to severe Covid-19, which was the cause of death. (Para 17 )
******
Order:
PER HON'BLE SMT. JUSTICE DR.G.RADHA RANI, PRESIDENT
1. The appeal is filed by the opposite party Insurance Company, aggrieved by the order dated 01.05.2023 in CC 454/2022 on the file of District Consumer Disputes Redressal Commission-III, Hyderabad, wherein the complaint filed by the Respondent/complainant was allowed in part, directing the opposite party to pay Rs.15,72,034/- along with interest at 6% p.a. from the date of repudiation letter till the date of realization and to pay costs of Rs.5,000/-.
2. The parties are herein after referred as arrayed before the District Consumer Commission as complainant and the opposite party.
3. (a) The case of the complainant in brief was that the complainant was the husband and nominee of the deceased by name Ankam Nagamani. On 19.06.2019, the deceased Ankam Nagamani had taken Life Insurance policy from opposite party vide policy No.501-9265916. The deceased Nagamani paid 1st premium of Rs.1,54,480/- on 19.06.2019 and 2nd premium of Rs.1,51,318.71ps. on 30.07.2020 (wrongly mentioned as 20.06.2021). The opposite party assured a sum of Rs.15,72,034/- towards death benefit and 40 days hospital cash benefit rider. On 22.10.2020 the deceased Ankam Nagamani suffered with Covid-19, due to which she was admitted in ICU Ward of Continental Hospital, Hyderabad as in-patient. While undergoing treatment in the said hospital, the deceased Nagamani succumbed due to cardiac arrest on 07.11.2020.The complainant spent an amount of Rs.9,77,111.34 ps towards medical treatment of the deceased in the said hospital. After the death of the deceased life assured, Ankam Nagamani, the complainant submitted claim intimation to the opposite party on 15.12.2020 claiming death benefit and hospital treatment expenses of Nagamani. After a gap of 15 days, on 31.12.2020, the opposite party sent claim repudiation letter on the ground of "non-disclosure of material information at the time of making proposal". On 25.02.2021 the complainant sent his complaint to opposite party Grievance Redressal Cell, Mumbai . But the said Grievance Redressal Cell not replied and dodged the matter. Vexed, the complainant approached the office of Insurance Ombudsman, Hyderabad and filed a complaint. However, the Insurance Ombudsman dismissed the complaint on 09.06.2021. As such, the complainant was forced to approach the District Commission for legal remedy against the opposite party.
(b) The complainant further submitted that the proposal form was not signed by deceased life assured Nagamani, the agent of the opposite party did not choose to take the same from her, for the reasons known to him. The opposite party did not refund premium amount paid. As per the policy condition 7, in case of repudiation, on ground of mis-statement and not on fraud, the premium collected on policy shall be paid to the insured or legal representative or nominee or assignees of insured within the period of 90 days from the date of repudiation. The opposite party violated the said condition. The deceased Nagamani was treated as in-patient in ICU ward in Continental Hospital from 22.10.2020 to 07.11.2020. Therefore, the opposite party was liable to pay 17 days of ICU benefit Rs.4,000 x 17 days = Rs.68,000/-, but the said amount was not paid. There was absolute deficiency of service on the part of the opposite party as such, the complainant claimed an amount of Rs.15,72,034/- towards sum assured for death benefit of deceased, Rs.2,00,000/- towards mental agony and Rs.1,59,966/- towards costs of the complaint, in total claimed an amount of Rs.20,00,000/- with interest at 24% per annum from the date of claim intimation i.e. 15.12.2020 till realization.
4. a) The opposite party filed written version raising preliminary objections that the complaint would not fall under "Consumer Dispute" as defined u/s 2 (8) of the Consumer Protection Act, 2019. At the time of issuance of policy, the policy holder after reading the terms of the policy only signs the
