Punjab

Ludhiana

CC/21/322

Amandeep Kaur - Complainant(s)

Versus

Future Generali India Life Insurance Co.Ltd - Opp.Party(s)

M.S.Sethi

01 Feb 2024

ORDER

DISTRICT CONSUMER DISPUTES REDRESSAL COMMISSION, LUDHIANA.

                                                Complaint No:322 dated 05.07.2021.                                                         Date of decision: 01.02.2024.

 

Amandeep Kaur W/o. Late Okar Singh, R/o. H. No.209, Village Basti, Dharamkot, Moga, Punjab-142042.                                                                                                                                                    ..…Complainant

                                                Versus

1. Future Generali India Life Insurance Co. Ltd., Indiabulls Finance Centre, Tower-3, 6^th Floor, Senapati Bapat Marg, Elphinstone (W), Mumbai-400013 through authorized signatory.
2. Future Generali India Life Insurance Co. Ltd., 2^nd Floor, Sandhu Towers, Ferozepur Road, Ludhiana, Punjab-141001 through authorized signatory.
3. Babita Gupta, Insurance Advisor code 8016146 c/o. Future Generali India Life Insurance Co. Ltd., 2^nd Floor, Sandhu Towers, Ferozepur Road, Ludhiana, Punjab-141001.                                                                                                                                                 …..Opposite parties 

Complaint Under section 35 of the Consumer Protection Act, 2019.

QUORUM:

SH. SANJEEV BATRA, PRESIDENT

SH. JASWINDER SINGH, MEMBER

MS. MONIKA BHAGAT, MEMBER

 

COUNSEL FOR THE PARTIES:

For complainant             :         None.

For OP1 and OP2          :         Sh. V.S. Mand, Advocate.

For OP3                         :         Exparte.

 

 

 

ORDER

PER SANJEEV BATRA, PRESIDENT

1.                In brief, the facts of the case are that the husband of the complainant Sh. Okar Singh (hereinafter called as DLA) purchased a Future Generali Heart and Health Insurance Plan policy No.01475318 for death benefit for a sum of Rs.5,92,560/- plus rider sum assured of Rs.2,00,000/- (consisting under critical illness cover with return of premium and saving & death coverage) w.e.f. 09.11.2018 towards yearly gross premium of Rs.32,518/- for 20 years. Representative of the OPs collected all the details from Okar Singh but no documents were alleged to be signed from him. The complainant stated that during 1^st year of policy, a claim dated 13.09.2018 for Rs.45,000/- was lodged with the OPs but during the second year of insurance coverage, Okar Singh died on 14.11.2019 and which fact was confirmed by the doctors. The complainant further stated that claim was lodged with the OPs along with some other policies taken from the OPs and also submitted claim documents but the OPs failed to communicate any written decision regarding death claim till date. The Ops denied the claims vide letter dated 27.12.2019 on the ground that medical document is fake as well as date of diagnosis of the life assured has not been established. Even the OPs wrote letter dated 17.12.2019 in the name of DLA for clarifying some issues related to two other policies No.01512978 and 01476687. According to the complainant she visited OP2 and submitted available documents to official Mandeep Sharma as claimed vide letter dated 17.12.2019 in two other policies. Then the OPs vide letter dated 10.01.2020 addressed to Okar Singh DLA, repudiated the claim on the grounds reproduced as under:-

“Thanks you for showing interest for Life Insurance Policy in Future Generali Life Insurance Company. With reference to your application number D00217644 and D00143914 dated 31/03/2019 and 16/11 / 2018 , we would like to share the following facts

Based on application D00217644 & D00143914, we have recently known that you have already covered for significantly high sum assured with multiple insurers and few of those proposals were rejected by other Insurer which was not disclosed to us in the above proposal.

A notice to this effect was issued to you by the Company on 17th December 2019 seeking explanation and you were given a timeline of seven working days for revert. The notice was received at your end on 26th December 2019 however you haven't come back to us on the same.

Considering the non-disclosed information regarding insurance details received now, we are unable to continue the cover under your policies that were issued basis information received in the proposals than. These policies will be made null and void and Company will not be on any risk on the said policies.

You will appreciate that all the information sought by the Company through the proposal form is material in nature and needs to be answered correctly. Please note as per Section 45 of the Insurance Act, the insurance company has right to call the policy in question if in its opinion the proposed/insured has misrepresented/concealed or represented incorrect facts to the Company.

Thus, based on the aforesaid information and non revert to the notice issued to you, the Company has a reason to believe that you have not revealed the facts and information which was material for the assessment of risk by the Company.

We, therefore, through this letter inform you that your above policy contracts are terminated and no benefits shall be payable. Premiums paid will be refunded back to you shortly.”

The complainant further stated that the said repudiation letter does not relate to policy No.01475318. Then she visited OP2 where OP2 replied that in their record, no repudiation of claim record available but told that decision was made in other policies No.01512978 and 01476687.

                   The complainant further averred that the OPs had not applied their mind properly and efficiently while issuing letter dated 27.12.2019 and others as the same were issued in name of the DLA rather same were required to be addressed to her being nominee. Even the repudiation letter dated 27.12.2019 was wrongly issued on the ground that medical document is fake. The complainant further stated that the DLA never concealed the fact having other policies and he gave the particulars of policies at the time of filling the proposal form. But it was the advisor of the OPs who filled the proposal form etc. who has not filled all the information in presence of DLA.  No information was ever concealed by DLA. Further the OPs were competent to refuse to issue the policy but they issued the policy in question in favour of the DLA. Now the Ops are liable to pay the claim amount of Rs.5,92,560/- being death benefits with other benefits. In the end, the complainant has prayed for setting aside the repudiation letter dated 27.12.2019 as well letter dated 10.01.2020 to be illegal, Arbitrary and also for issuing direction to the opposite parties to settle and pay the claim of Rs.45,000/- rejected vide letter dated 27.12.2019. The complainant further prayed for issuing directions to the OPs to pay compensation of Rs.2,00,000/- and litigation expenses of Rs.22,000/-.

2.                Upon notice, none appeared on behalf of OP3 despite service and as such, OP3 was proceeded against exparte vide order dated 11.10.2021.

3.                However, OP1 and OP2 appeared and filed joint written statement and by taking preliminary objections, assailed the complaint on the ground of maintainability of the complaint, suppression of material facts by the complainant; lack of jurisdiction and cause of action etc. OP1 and OP2 stated that Sh. Okar Singh committed a breach of principle of UTMOST GOOD FAITH by suppressing the material facts that he had huge life insurance cover prior to taking policy in question. The OPs stated that the DLA was holding a health insurance policy No.01475318. During his life time, DLA raised a health claim for his hospitalization on 13.09.2019 but during investigation the documents submitted were found to be fabricated and fake. As such, on account of submission of fake documents, the claim was rejected on 27.12.2019 and the policy was terminated. Further the DLA was having two other policies with OP1 and OP2 bearing No.01476687 and 01512978, which were declined at underwriting stage due to non-disclosure of other policies held from other insurance companies before approaching them and the paid premiums were refunded.

                   Under the column Brief Facts of the case, OP1 and OP2 stated that they received a duly filled and signed proposal form No.H0007861 by the DLA for Future Generali Heart and Health Insurance Plan for annual premium of Rs.32,519/- , on the basis of which policy No.01475318 commencing from 09-11-2019 was issued, the detail of which is reproduced as under:-

Application No.	H00007861
Policy Number	01475318
Policy Plan	Future Generali Heart and Health Insurance Plan
Life Assured	Mr. Okar Singh
Owner/proposer	Mr. Okar Singh
Premium	Rs.32,519/-
Premium Frequency	Annual
Proposal Date	05-November-2018
Proposal Received Date	05-November-2018
Risk Commencement Date	09-November-2018
Policy Issue Date	09-November-2018
Total Premium Paid	Rs.32,519/-
Paid to Date	09-November-2019
Policy Dispatch Date	26-November-2018 through India Post
Policy received details	30-November-2018
Airway Bill Number	RM677558021IN

 The policy documents were sent at the address of the DLA. The DLA during his life time raised hospitalization claim on 13.09.2019. On receipt of the hospitalization papers, it was found during investigation that the documents submitted were fabricated and fake and were found not genuine, due to which the claim was rejected on 27.12.2019 and on the fact that that the DLA had not disclosed about his other policies to the tune of Rs.7 Crore sum assured. OP1 and OP2 further stated that the DLA knowingly and intentionally had not disclosed bout his previous insurance policies with other companies and as such, on the basis of findings of general industry check, a show cause notice dated 17.12.2019 was issued to DLA for explaining the reason of non disclosure within 7 days which the DLA did not respond.

                   The opposite parties also submitted the details of the policies purchased by the insured before the policy in question, which is reproduced as under:-

Company Name	Policy Number	Sum Assured	Risk Commencement date
Bajaj Allianz	330580012	3500000	28-Oct-16
HDFC	18900131	3500000	05-Nov-16
Exide Life	3434963	2600000	05-Nov-16
Edelweiss Tokio	000077490E	6500000	05-Jan-17
ICICI Prudential	22157581	5400000	04-Apr-18
Aviva India	10380696	1500000	18-Jul-18
SBI	2F358600308	3500000	21-Jul-18
Aegon	180814827070	3500000	21-Aug-18
Canara HSBC	1500763011	3500000	24-Aug-18
Aviva India	10386099	5000000	08-Oct-18
Max Life	521251751	544000	29-Oct-18
Max Life	564589976	3000000	02-Nov-18

 

The OPs further submitted the details of the total policies taken by the DLA, which are reproduced as under:-

Company Name	Policy Number	Sum Assured	Risk Commencement date
Bajaj Allianz	330580012	3500000	28-Oct-16
HDFC	18900131	3500000	05-Nov-16
Exide Life	3434963	2600000	05-Nov-16
Edelweiss Tokio	000077490E	6500000	05-Jan-17
ICICI	22157581	5400000	04-Apr-18
FGI	1512978	1950000	12-Apr-18
Aviva India	10380696	1500000	18-Jul-18
SBI	2F358600308	3500000	21-Jul-18
Aegon	180814827070	3500000	21-Aug-18
Canara HSBC	1500763011	3500000	24-Aug-18
Aviva India	10386099	5000000	08-Oct-18
Max Life	521251751	544000	29-Oct-18
Max Life	564589976	3000000	02-Nov-18
FGI	1475318	2000000	09-Nov-18
FGI	1476687	200000	16-Nov-18
Exide Life	3434963	5000000	17-Nov-18
RNLIC	53344614	164729	17-Nov-18
Canara HSBC	9100416375	3000000	19-Nov-18
Canara HSBC	9100416376	3000000	19-Nov-18
Star Union Dai-ichi	1263055	3000000	19-Nov-18
Edelweiss Tokio	000077505E	2500000	26-Nov-18
Canara HSBC	9100416378	3500000	27-Nov-18
RNLIC	53348356	3500000	30-Nov-18
Aegon	180815000000	1000000	04-Dec-18
Bajaj Allianz	352623201	1000000	04-Dec-18
Star Union Dai-ichi	1268922	3000000	13-Dec-18
Edelweiss Tokio	000035824E	2500000	06-Feb-19
Canara HSBC	9100416374	1950000	23-Mar-19
	Total	Rs.7,93,08,729.00

OP1 and OP2 further stated that the complainant had induced and mislead them to issue the policy in question by suppressing the material facts. Thus the DLA had committed breach of doctrine of UTMOST GOOD FAITH by giving false details regarding previous insurance policy/proposal.

                   On merits, OP1 and OP2 reiterated the crux mentioned in the preliminary objections and brief facts of the case. OP1 and OP2 have denied that there is any deficiency of service and have also prayed for dismissal of the complaint.

3.                In support of her claim, the complainant tendered her affidavit Ex. CA in which she reiterated the allegations and the claim of compensation as stated in the complaint. The complainant also tendered documents Ex. C1 is the copy of the policy schedule, Ex. C2 is the copy of proposal form, Ex. C3 is the copy of discharge card issued by Deepanjali Multispecialty hospital, Gohana, Rohtak, Ex. C4 is the copy of indoor bill dated 09.08.2019 issued by Deepanjali Hospital, Ex. C5 is the copy of receipt of lab test, Ex. C6 is the copy of death certificate of Okar Singh, Ex. C7 is the copy of repudiation letter dated 27.12.2019, Ex. C8 is the copy of certificate issued by Harbans Nursing Home, Dharamkot, Kot Isse Khan, Moga, Ex. C9 is the copy of certificate issued by Jasvir Kaur W/o. Sukhvir Singh, M.C. Nagar Council, Dharamkot, Moga, Ex. C10 is the copy of letter dated 10.01.2020, Ex. C11 is the copy of Aadhar Card of the complainant and closed the evidence.

4.                On the other hand, counsel for OP1 and OP2 tendered affidavit Ex. RA of Ms. Reena Kamath, Manager – Legal, Future Generali India Life
Insurance Company Limited, having its registered office at Unit 801 and 802, 8^th Floor, Tower C, Embassy 247 Park, B.S. Marg, Vikhroli (W), Mumbai along with documents Ex. R1 is the copy of proposal form, Ex. R2 is the copy of insurance policy/documents, Ex. R3 is the copy of repudiation letter dated 27.12.2019, Ex. R4 is the copy of request for critical illness form, Ex. R5 is the copy of letter of Dr. Deepak Kumar on the letter pad of Aastha Hospital, Sirsa, Haryana, Ex. R6 is the copy of letter dated 17.12.2019, Ex. R7 is the copy of Email dated 24.06.2021 and closed the evidence.

5.                During the course of proceedings of the complaint, on 11.01.2024, Sh. M.S. Sethi, Advocate counsel for the complainant suffered statement having no instructions from the complainant to contest the case further and withdrew his power of attorney filed on behalf of the complainant. Accordingly, a fresh notice was issued to the complainant but neither the complainant nor anyone on her behalf turned up today.

6.                We have heard the arguments of the counsel for OP1 and OP2 and also gone through the complaint, affidavit and annexed documents and written reply along with affidavit and documents produced on record by both the parties. We proceed to decide the case on merits.

7.                The complainant, being wife and nominee of DLA Okar Singh, has raised a grievance with regard to repudiation letter dated 27.12.2019 Ex. C7 = Ex. R3 regarding hospitalization claim of LA Okar Singh. Admittedly, DLA was a holder of Future Generali Heart and Health Insurance Plan policy No.01475318 Ex. C1 = Ex. R2, for death benefit for a sum of Rs.5,92,560/- plus rider sum assured of Rs.2,00,000/- (consisting under critical illness cover with return of premium and saving & death coverage) w.e.f. 09.11.2018 towards yearly gross premium of Rs.32,518/- for 20 years. LA had obtained this policy by submitting proposal form Ex. C2= Ex. R1 wherein he has answered the relevant questions with regarding to holding of earlier insurance policies and income as under:-

1.23  Is any of the following condition true about your existing insurance proposals/policies?

a) You have a pending proposal for life or health insurance with some other insurer.   b) You have existing life or health policy which is in force or paid up or lapsed.   c) Any of your previous life health insurance policy was declined or postponed or rated up or accepted at sub-standard terms.

No.

He also submitted the following declaration with regard to information furnished by him in the said form:-

“1. General declaration: I/We hereby declare that we have fully understood the product. We have read and understood the sales literature and illustration. We hereby declare, on my behalf and on behalf of all persons proposed to be insured, that the above statements, answers and/or particulars given by me are true and complete in all respects to the best of my knowledge and that I/We am/are authorized to propose on behalf of these other persons. I understand that the information provided by me will form the basis of the insurance policy, is subject to the Board approved underwriting policy of FUTURE GENERALI INDIA LIFE INSURANCE COMPANY LIMITED (the "Company") and that the policy will come into force only aftar full receipt of the premium chargeable. We declare and consent to the company seeking medical information from any doctor or from a hospital who at any time has attended on the life to be insured/proposer or from any past or present employer concerning anything which affects the physical or mental health of the life to be assured/proposer and seeking information from any insurance company to which an application for insurance on the life to be assured/proposer has been made for the purpose of underwriting the proposal and/or claim settlement. We authorize the company to share Information pertaining to my proposal (including medical records, annexures/questionnaires attached thereto) for the purpose of underwriting and/or claims settlement and with the Statutory Authorities in accordance with the existing statutory laws or in accordance to the instructions issued by the Statutory Authority. We agree that if after the date of submission of proposal but before the issue of the First Premium Receipt or before communication of the risk acceptance by the company (1) any change in my occupation or any adverse circumstances connected with my financial position or my general health occurs or (1) if a proposal for insurance or an application for revival of a policy on my life is made to the company or any insurer of any such proposal for insurance or application for revival is withdrawn or dropped, deferred, declined or accepted at an increased premium or subject to a lean or on terms other than as proposed, We shall forthwith intimate the same to the company in writing.”

8.                Acting upon the information so received by OP1 and OP2, the insurance policy was issued and the policy documents Ex. C1 = Ex. R2  issued to the DLA. However, OP1 and OP2 conducted post verification of the life assured Okar Singh and observed that the life assured had not disclosed details of his other life insurance proposals/policies that he had applied for or declined by the other insurance companies in the Future Generali Heart and Health Insurance Plan proposal form and thus obtained the insurance cover from OP1 and OP2 by suppressing material facts.  In the proposal form, the DLA mentioned his annual income to be Rs.4,50,000/- but he obtained the insurance policies worth Rs.7 Crore. On 27.12.2019, the insurance company repudiated the hospitalization claim vide letter Ex. C7 on the ground that the submitted medical documents were found to be ‘Fake’ and also the date of diagnosis of the life assured has not been established. The operative part of the repudiation letter is reproduced as under:-

“In view of the fact that the Medical document submitted by you has been found to be ‘Fake’, Also the date of diagnosis of the life assured has not been established and as such no claim event under the captioned policy has been established to have occurred.

This is a clear attempt to defraud the Company for insurance monies. It may, therefore, be noted that while repudiating its liability under the policy in accordance with the provisions of the policy, the Company reserves the right to intimate the same to the appropriate Authorities for any action as they may deem fit.

The contract of insurance is based on the principle of utmost good faith and the Company relies on the information provided by the life to be insured in the application for insurance. Hence, despite making every attempt to consider the claim favorably, the facts regrettably demonstrate that this is not a valid claim. We therefore regret that we are unable to honor your claim and are repudiating our liability under the policy.” 

9.                Further perusal of record shows that DLA stated to have been died on account of “natural death” on 14.11.2019 i.e. after about 12 months from the issuance of the policy. Death certificate of DLA is Ex. C6. It is pertinent to mention that DLA was born on 01.01.1978 and at the time of obtaining the policy he was aged about 40 years and at the time of death, he was about 41 years of age. The complainant did not elaborate any facts and circumstances leading to natural death of DLA in a comparatively younger age nor any affidavit of herself or of any attendant was produced in whose presence DLA breathed his last. Even no medical document was brought on record to show that DLA was taken to some hospital before he was declared dead or brought dead. The complainant was required to dispel suspicion with regard to “natural death” of DLA.

10.              It is strange that the complainant did not file formal death claim with the opposite parties. Even in the complaint, she has maintained stoic silence qua lodging of death claim. OP1 and OP2 in their written statement specifically provided the details of the previous multiple insurance policies held by the DLA and have specifically pleaded the execution of well planned external fraud by the complainant or DLA but the complainant did not opt to file any rejoinder to the contents of the written statement. Even in her affidavit, the facts which were specifically in the knowledge of the complainant were not divulged raising a serious doubt with regard to bonafide of the claim.

11.              It is evident that the repudiation in the present case was within the three year from the commencement of the insurance cover which leads to invoking of Section 45 of the Insurance Act, which reads as under:-

“Section 45

(1) No policy of life insurance shall be called in question on any ground whatsoever after the expiry of three years from the date of the policy, i.e., from the date of issuance of the policy or the date of commencement of risk or the date of revival of the policy or the date of the rider to the policy, whichever is later.

(2) A policy of life insurance may be called in question at any time within three years from the date of issuance of the policy or the date of commencement of risk or the date of revival of the policy or the date of the rider to the policy, whichever is later, on the ground of fraud:
Provided that the insurer shall have to communicate in writing to the insured or the legal representatives or nominees or assignees of the insured the grounds and materials on which such decision is based.

Explanation I. -For the purposes of this sub-section, the expression "fraud" means any of the following acts committed by the insured or by his agent, with intent to deceive the insurer or to induce the insurer to issue a life insurance policy: -

(a) the suggestion, as a fact of that which is not true and which the insured does not believe to be true;

(b) the active concealment of a fact by the insured having knowledge or belief of the fact;

(c) any other act fitted to deceive; and

(d) any such act or omission as the law specially declares to be fraudulent.

Explanation II. -Mere silence as to facts likely to affect the assessment of the risk by the insurer is not fraud, unless the circumstances of the case are such that regard being had to them, it is the duty of the insured or his agent keeping silence, to speak, or unless his silence is, in itself, equivalent to speak.

(3) Notwithstanding anything contained in sub-section (2), no insurer shall repudiate a life insurance policy on the ground of fraud if the insured can prove that the misstatement of or suppression of a material fact was true to the best of his knowledge and belief or that there was no deliberate intention to suppress the fact or that such misstatement of or suppression of a material fact are within the knowledge of the insurer:

Provided that in case of fraud, the onus of disproving lies upon the beneficiaries, in case the policyholder is not alive.

Explanation. -A person who solicits and negotiates a contract of insurance shall be deemed for the purpose of the formation of the contract, to be the agent of the insurer.

(4) A policy of life insurance may be called in question at any time within three years from the date of issuance of the policy or the date of commencement of risk or the date of revival of the policy or the date of the rider to the policy, whichever is later, on the ground that any statement of or suppression of a fact material to the expectancy of the life of the insured was incorrectly made in the proposal or other document on the basis of which the policy was issued or revived or rider issued:

Provided that the insurer shall have to communicate in writing to the insured or the legal representatives or nominees or assignees of the insured the grounds and materials on which such decision to repudiate the policy of life insurance is based:

Provided further that in case of repudiation of the policy on the ground of misstatement or suppression of a material fact, and not on the ground of fraud, the premiums collected on the policy till the date of repudiation shall be paid to the insured or the legal representatives or nominees or assignees of the insured within a period of ninety days from the date of such repudiation.

Explanation. -For the purposes of this sub-section, the misstatement of or suppression of fact shall not be considered material unless it has a direct bearing on the risk undertaken by the insurer, the onus is on the insurer to show that had the insurer been aware of the said fact no life insurance policy would have been issued to the insured.

(5) Nothing in this section shall prevent the insurer from calling for proof of age at any time if he is entitled to do so, and no policy shall be deemed to be called in question merely because the terms of the policy are adjusted on subsequent proof that the age of the life insured was incorrectly stated in the proposal.”

 

12.              It is settled proposition of law that the contract of insurance is based upon the principle of  ‘Uberrima Fides’ and both insurer and insured are under legal obligation to provide the correct and authenticated information at the time of the policy. The information regarding holding of earlier prior insurance policies, age, proof of income and medical history are some of the criteria which are to be disclosed truthfully by the proposer. In the present case, the opposite parties had sought intimation from the DLA with respect of previous multiple policies which was not disclosed and suppressed the material facts.

13.              In its judgment Satwant Kaur Sandhu Vs New India Assurance Co. Ltd. Civil Appeal No.2776 of 2002 decided on 10.07.2009, the Hon’ble Supreme Court of India has held that if there was clear suppression of material facts in regard to the health of the insured, the insurer was fully justified in repudiating the insurance contract. The Hon’ble Supreme Court of India has further held in Reliance life Insurance Co. Ltd. and others Vs Rekhaben Nareshbhai Rathod in 2019 (2) R.C.R. (Civil) 909 that two months prior to policy obtained from appellant insured obtained policy from another company and this fact was not disclosed by the insured. Repudiation was made within two years period from commencement of insurance cover. The proposer was aware of contents of form that he was required to fill and disclosure of material for assessment of risk which was being taken by insurer which entitled the insurer to repudiate the claim.    

14.              As a result of above discussion, the complaint fails and the same is hereby dismissed. However, there shall be no order as to costs. Copies of order be supplied to parties free of costs as per rules. File be indexed and consigned to record room.

15.              Due to huge pendency of cases, the complaint could not be decided within statutory period.

 

 

 

(Monika Bhagat)          (Jaswinder Singh)                      (Sanjeev Batra)                       Member                     Member                                       President         

 

Announced in Open Commission.

Dated:01.02.2024.

Gobind Ram.