Order Name: Bharti Axa Life Insurance Co. Ltd. & Anr Vs. Madhu Mishra & 3 Ors.
Case No.: F.A. No. 291/2022
The National Consumer Disputes Redressal Commission, led by Mr. Subhash Chandra and Dr. Sadhna Shanker, recently ruled that insurance companies cannot reject a claim without valid documentary evidence to support their decision.
Summary of the Case:
The complainant’s late husband had taken a home loan from Punjab National Bank (PNB) Housing Finance and secured it with insurance policies from Bharti AXA Life, including an accidental death benefit rider. When applying for these policies, he stated that he had no history of medical conditions like hypertension or heart disease. The insurance lasted for 84 months, and a premium of Rs 1,29,288.75 was paid. Unfortunately, he passed away, and the insurer denied the claim, citing undisclosed medical history of serious ailments, including heart disease and hypertension. The complainant took the issue to the State Commission in Uttar Pradesh, which ruled in her favor, ordering the insurer to settle the loan through the insurance policy within two months. The insurer then appealed to the National Commission.
Insurer’s Argument:
The insurer argued that the deceased had hidden pre-existing conditions, violating the principle of utmost good faith, rendering the policy void. They claimed that medical records did not connect his hospital treatment to the conditions mentioned in the claim denial, and insisted that the cause of death was linked to these undisclosed diseases.
National Commission’s Observations:
The National Commission noted that the insurance policy was taken to cover a home loan. The deceased did not report any pre-existing conditions when filling out the insurance application. The insurer’s investigation revealed documents from Metro Heart Institute, suggesting undisclosed heart ailments. However, the complainant countered that these documents were not admissible without proper affidavits. Both the State and National Commissions found no evidence of misrepresentation or suppression of material facts by the deceased. Moreover, the cause of death was not related to the alleged heart ailments, as the death certificate indicated esophageal cancer led to cardiorespiratory failure. The Commission referenced the case of Satwant Kaur Sandhu Vs. New India Assurance Co. Ltd., highlighting that the insurer failed to prove any deliberate concealment of information.
In conclusion, the appeal by the insurer was dismissed, and the State Commission’s decision was upheld.
Takeaway:
This judgment underscores the importance of insurers providing solid evidence when rejecting claims, rather than relying on assumptions or incomplete information. It also highlights the need for transparency and honesty from policyholders when disclosing medical history.
