SMT. RAVI SUSHA : PRESIDENT
Complainant filed this complaint under Sec.12 of the Consumer Protection Act 1986 .
The nutshell of the complainant’s case is that complainant’s father has insured the policy(a jeevan sampathi) having No. 500-9182345 with OP.2 through an insurance agent at the office of 1st OP at Kannur for an amount of Rs.1,00,000/- the only intention of taking the policy from the 2nd OP is for getting any benefit as offered by the officials of OP during the life span of my father. At the time of taking the policy everything with regard to the health records of my father were revealed to the insurance company. At the time of taking the policy even though the complainant insisted to take medical checkup of father, but the 1st OP said that there is no need to take medical checkup for an amount upto Rs.3 lakhs and they themselves tick the relevant column. The first premium of Rs.10365.55 was paid by the complainant on October 28th 2013, 3rd premium was also paid. It is alleged by the complainant that the grounds mentioned in the repudiation letter of OP in relation to the death claim of her father was unjust and unfair. The family members are eligible to receive 100% of sum assured. Complainant also submitted that the answer for the question 7(1) and 7(3) of the proposed form , father of the complainant has answered in true manner and then from where the treatment history of diabetics and blood pressure was found by the OP in repudiation letter. According to the complainant, after accepting all the details regarding the health of the insured, without having any objection and received the premium afterwards at the time of death claim, Ops cannot repudiate the death claim of the complainant. The repudiation of death claim put forward by the complainant is not sustainable in the eye of law and is amounts to grave deficiency of service. The complainant sent a lawyer notice to the Ops and 2nd OP sent a reply notice stating lame excuses. Complainant submitted that the insured never suppressed the material facts regarding the past medical history. According to complainant the legal heirs of the insured is entitled to get the sum assured Rs.1,00,000/- from the Ops. Hence filed this complaint for getting the sum assured with interest @12% from the date of payment till realization with compensation and cost.
After receiving notice, Opposite parties 1 to 3 are jointly filed their version contended that the insured had made wrong statements in the proposal form in respect of health history and the subject policy was issued by the OP solely based upon the statements made by the life insured in the proposed form for insurance and as such the proposal of the life insured falls within the ambit of sec.45 of Insurance Act. It is submitted by the Ops that the life insured had not obtained the subject policy through any of agents of the OP but for obtaining the policy, the services were availed of from an independent insurance broker “Allegro Insurance Brokers Pvt.Ltd an insurance broker who is an independent and duly licensed by IRDA, who advise their customers on their insurance needs and thereafter arrange insurance policy from any insurance company as per their own judgment and as per the customer’s choice. The insurance companies do not impose any administrative control over the insurance brokers. It is further submitted that the contract of insurance is a contract of utmost good faith. The wrong information or suppression of material facts will frustrate the contract between the insurer and the insured. According to OP there is no deficiency in service on the part of the OP in repudiating the claim of the complainant and the same was intimated to the complainant vide letter on the ground that the lie assured had suppressed the material facts in the proposed form for the insurance policy as regards to his health record at the time of submitting the said proposal form within the OP. At the time of filling the said proposed form, the life insured was explained that the contract of insurance is based on doctrine of utmost good faith and that he should correctly and honestly disclose all the material facts within his knowledge in the said proposal for taking the insurance policy. OP submitted that they issued the policy to the present life insured on the basis of information provided in the said proposal along with customer declaration form and documents
submitted by the life insured believing the same to be true and correct. The life insured had signed the proposal form on his own will and consent declaring that he has fully understood the nature of the questions. It is submitted that while processing the death claim of the complainant and during the investigation, it was found that the life insured had furnished incorrect information and suppressed the material facts in the proposed form submitted by him. In the proposal form, the insured had replied in negative in relation to clause No.7 Health records of life to be insured. OP submit that the life insured deliberately misled the OP by concealing and suppressing the material information that he was suffering from and was a suffering from and was a known case of HTN and uncontrolled DM 2 with vision disability since very long time and was under medical treatment, prior to submission of proposal for the policy. The life insured was on hemodialysis since 2 years, HTN-10 years and was also suffering from disability . It is also submitted that the insured was hospitalized Shreedhareeyam hospital from 12.9.2012 to 1.10.2012 for diabetic Retinopathy. According to OP, from the above investigations, it was apparent that the insured had given false and misleading information to OP and if the insured would have given information in the proposal form that he was known case of HTN and uncontrolled DM-2 with vision disability at the time of proposal , they would never have issued policy infavour of the insured in the present case. They would have upfront rejected the proposal of insurance op submitted that in the light of settled law and the regulatory provisions, the OP rightfully repudiated the claim of the complainant and the same was intimated to the complainant vide its letter dated 23/10/2015. Hence OP prays for the dismissal of the complaint.
The learned counsel appearing for the complainant submitted that the father of the complainant that the insured is not aware of an ailment he was suffering non disclosure there of does not amount to suppression of material facts. The answer for the question 7(1) and 7(3) of the proposal form, insured has answered everything in true manner and at the time of joining in the insurance, OP.1 must have verified whether the information given by the insured is correct or not and after accepting all those details in the proposal form without having any objection and received the premium after wards, at the time of death claim, ops cannot repudiate the death claim put forwarded by the complainant. Complainant further submitted that at the time of taking the policy from OP.1, complainant specifically enquired 1st OP, for the medical checkup, but the concerned authorities and agent told to complainant that there is no need for medical checkup to the policy for an amount of Rs.3,00,000/-, so that without conducting medical checkup at the time of taking policy by the OP, even after the compulsion from complainant, thereafter denying the same on unwarranted grounds is nothing but unfair trade policy. To strengthen the argument, learned counsel has placed on record copies of a number of decisions rendered by the Hon’ble Supreme Court and Hon’ble National Commission.
Having given our earnest consideration to the material on record, particularly the questionnaire filled by the insured in the proposal form, it is a well settled proposition of law that a contract of insurance is based on the principle of utmost good faith applicable to both the parties. The rule of non disclosure of material facts vitiating a policy still holds the field. The bargaining position of the parties in a contract of insurance is unequal. The insured knows all the facts,but the insurer is aware of anything which may be material to the risk. Very after, it is the insured who is the sole person who has this knowledge. The insurer may not even have the means to find out facts which would materially affect the risk. The law, therefore, enjoins on the insured an absolute duty to disclose correctly all material facts which are within his personal knowledge or which he ought to have known had he made a reasonable enquiries. A contract of insurance therefore can be repudiated for non disclosure of material facts.’
The question for examination is as to whether in the present case the insured had suppressed “any material fact” which would have been relevant for the insurance company in order to decide whether to issue an insurance policy to the deceased?
The expression “material fact” is not defined in the Insurance Act and therefore an observed by the Hon’ble Supreme Court in Satwant Kaur Sandhu vs New India Assurance Company Ltd (2009) 8 SCC 316, it has to be understood in general terms to mean any fact which would influence the judgment of a prudent insurer in fixing the premium or determining whether he would like to accept the risk. Any fact, which goes to the root of the contract of insurance and has a bearing on the risk involved would be material and if the proposer has knowledge of such fact, he is obliged to disclose it, particularly which answering questions in the proposal form. Any inaccurate answer will entitle the insurer repudiate their liability because there is clear presumption that any information sought for in the proposal form is material for the purpose of entering into a contract of insurance.
The Hon’ble Supreme Court observed that “ when an information on specific aspect is asked for in the proposal form, an assured is under solemn obligation to make a true and full disclosure of the information on the subject which is within his knowledge. It is not for the proposer to determine whether the information sought for is material for the purpose of the policy or not. Of course, obligation to disclose extends only to facts which are known to the applicant and not to what he ought to have known. The obligation to disclose necessarily depends upon the knowledge one possesses”
Further the Apex court noted in many case that “Insurance is a contract of speculation. The special facts upon which the contingent chance is to be computed lie most commonly in the knowledge of the assured only, the underwrite trust to his representation and proceeds upon confidence that he does not keep back any circumstance in his knowledge to mislead the underwriter in to a belief that the circumstances does not exist”. The policy would be equally void against the underwrite if he concealed. Good faith forbids either party, by concealing what he privately knows, to draw the other into a bargain from his ignorance of the fact, and his believing the contrary”.
As stated above, in this case we have looked into the answers given by the insured against the questions Nos. 7(1)(a) and 7(2), 7 (3) (c)(n) ie Health records of life to be insured within the past five years, have you a) consulted any doctor or other health practioner except for common cold , influenza lasting less than four days?(2) Are you taking any medication at present or following a diet prescribed by a doctor(3) Have you or have you ever had or sought advice for the following (c) any other respiratory or lung trouble, e.g asthma,bronchitis, persistent cough, tuberculosis, pneumonia, coughing with blood, shortness of breath, avian flu, et? (n) A test indicating the presence of HIV/AIDS , Hepatitis B or Hepatitis C?”
All above questions were answered in the negative . Moreover it is also observed that the insured had given a good health declaration, wherein he had stated that he was in sound health, did not have any physical defect/ deformity, and that he had never suffered or was suffering or was hospitalized or in critical illness or a condition requiring medical treatment for a critical illness as on date. But in Ext.B1 the doctor’s certificate , admitted by PW1 that the insured was last attend the doctor for pulmonary TB, chronic kidney disease, type(2) diabetic from 19/7/2015 and history reported is known case of chronic kidney disease, on heamo glicylin Type 2 DM ’33 years’, Hypertension 10 years, for which ailments he was an regular medication for over so many years ie 33 years for diabetics and 10 years for hypertension and was chronic kidney disease, it was not possible to even comprehend that the insured would not know that he was suffering from the above diseases that he was suffering from the above diseases as stated by him in answer to the question No.7. Undoubtedly, there were” material facts” and being within the knowledge of the insured only, he was obliged to disclose the same correctly in the questionnaire issued to him for the purpose of obtaining the policy in question. Having suppressed the said facts while answering the questionnaire, we are of the opinion that the insurance company was within its rights to repudiate the claim of the complainant. In that view of the matter, there was no question of any deficiency of service on their part.
In the result, the complainant fails to substantiate the deficiency of service on the part of opposite parties and hence the complaint is dismissed. No order as to cost.
Exts:
A1-policy application
A2-policy document
A3-policy specification
A4-1st premium receipt
A5- claim ack. Letter
A6-claim repudiation letter
A7-notice sent to legal cell by complainant
A8-lawyer notice
A9-Reply notice
A10&A11-Deposit receipt
B1- Doctor’s certificate
Sd/ sd/ sd/
PRESIDENT MEMBER MEMBER
Ravi Susha Molykutty Mathew. Sajeesh K.P
eva
/forwarded by Order/
SENIOR SUPERINTENDENT
