How To Get Insurance Claims against Repudiation order passed by Insurance Companies under Section 45 of Insurance Act / Insurance Lawyers Chandigarh
LIC and Section 45 of Insurance Act
Section 45 of Insurance Act This the provides liberty to the Insurance Companies for repudiating insurance claim in view of any concealment of fact by the policy holder. It applies only if concealment and misstatement of fact come of record within two years. insurance lawyer in chandigarh
Life Insurance Corporation Of … vs Jaswinder Kaur on 5 April, 2019 (N.C.D.R.C. Delhi)
That on 04/12/2012 the husband of complainant (hereinafter referred to as deceased) resident Chandigarh took a life insurance Jeevan Anand policy under which the death sum assured was given amounting to Rs.5,00,000/- and under this life insurance policy complainant was appointed as nominee of deceased. The husband of complainant committed suicide on 26.09.2015.
That the complainant applied for the death claim but without any cogent reason death claim has been rejected by Life Insurance Corporation (LIC) by stating that deceased concealed the material fact at the time of buying Insurance policy. LIC rejected the death claim of deceased. That the against repudiation of death claim passed by the Divisional office of LIC the appeal was filed before the Zonal Manager, LIC of India, Zonal Office, Jeevan Bharti, Connaught Circus, New Delhi, but the Zonal Office also uphold the repudiation decision of Divisional Office and therefore, dismissed the appeal vide order/letter dated 09.11.2016. Thereafter the complainant approached before the Consumer Forum Chandigarh and moved her complaint and same was allowed vide order dated 16.10.2017.
That after order of Hon’ble Consumer Forum Chandigarh the complainant filed execution application the notice for the execution was served to the LIC. The LIC filed appeal before the Hon’ble State Commission, Chandigarh which was dismissed vide order dated 28.11.2017. Thereafter LIC filed the appeal before this Hon’ble National Commission at Delhi and it was also dismissed.
That in lastly LIC preferred SLP in Hon’ble Supreme Court and matter came up for hearing but due to settled law again their plea was rejected and SLP was dismissed.
Sole grounds for repudiation of claim was violation of section 45 of Insurance Act. It read as under;-
“45. Policy not to be called in question on ground of mis-statement after two years.—No policy of life insurance effected before the commencement of this Act shall after the expiry of two years from the date of commencement of this Act and no policy of life insurance effected after the coming into force of this Act shall after the expiry of two years from the date on which it was effected, be called in question by an insurer on the ground that a statement made in the proposal for insurance or in any report of a medical officer, or referee, or friend of the insured, or in any other document leading to the issue of the policy, was inaccurate or false, unless the insurer shows that such statement 1[was on a material matter or suppressed facts which it was material to disclose and that it was fraudulently made] by the policy-holder and that the policy‑holder knew at the time of making it that the statement was false 2[or that it suppressed facts which it was material to disclose]: 2[Provided that 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.]
Observation of Court on 45 of Insurance Act
But this plea was declined by all authorities and Order of Consumer Forum was upheld. In present case deceased has committed suicide after the lapse of 2 year. Even suicide was also covered after one year without any condition. Hence the complaint was accepted and award was passed and it was upheld by the apex court of India (Supreme Court of India). Insurance lawyer in chandigarh
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Related case laws on section 45 of Insurance Act
It was observed in cases titled Jagdeep Kumar v. Life Insurance Corporation of India (R.S.C.D.R.C.) 2007(2) C.P.J. 341 “ Consumer Protection Act, 1986 Section 15 Insurance Act, 1938, Section 45 – Life Insurance – Repudiation of claim alleging suppression of material facts relating to health alleged – District Forum partly allowed the complaint and directed refund of premiums paid – Appeal against – Death after 2 years of taking policy – Contention of O.P. that fact of disease being addicted to alcohol and suffering from jaundice suppressed – Rejected – Proposal form was filled on 28.1.1988 – Insured admitted in hospital for first time on 25.4.1990, with liver problem – No evidence to prove deceased suffered from said diseases at time of filling proposal form – Moreover, suppression of every fact not amounts to suppression of material fact – Non-mentioning of fact that deceased addicted to alcohol, does not amount to suppression of misrepresentation in real sense – O.P. liable to pay entire policy benefits with interest – Appeal allowed. Insurance lawyer in chandigarh
That it has also been discussed that when deceased was not asked to provide such any kind of answers and he was asked just to put his signature on the proposal form and rest all the Column and answers were filled by the insurance agent. All the proposal form was filed in the handwriting of insurance agent; therefore, information filled by the insurance agent the deceased cannot be made responsible for concealing the fact. It has been observed in case titled Life Insurance Corp. of India v. Bina Joshi (USCDRC)(Dehradun) 2008(52) R.C.R. (Civil) 243 “Consumer Protection Act, 1986 Section 15 Life Insurance – Suppression of Material Facts – Insurance claim repudiated – Forum held that all the questions were replied correctly by the insured, but correct information was not filled up by the agent – Medical Certificate produced on record cannot be treated as conclusive evidence, as facts given by doctor were contradictory in itself – LIC and it’s agents played foul with the proposer and the proposals are not scrutinised properly – Where the entries are filled by agents, policy holders should not be blamed for concealing the information – Past history of policy holder cannot be made basis for repudiation of claim, in the absence of affidavit of the certifying doctor – Order of Forum upheld – Appeal of LIC dismissed.
It was further observed in case titled Life Insurance Corporation of India v. Purnima Roy (W.B.S.C.D.R.C.)(Kolkata), 2008(53) R.C.R. (Civil) 564 “Consumer Protection Act, 1986 Section 2(1)(g) Insurance Act, 1938 Section 45 Life insurance – Suppression of information – Earlier policies not disclosed – Claim repudiated – District Forum allowed the complaint – Appeal against – Policy being two years old, should not ordinarily repudiated unless wilful suppression with fraudulent intention by insured proved – Insured not suffering from any disease, died natural death – Proposal form filled by agent – Omission on the part of agent cannot be ruled out – Information suppressed by insured with fraudulent intention, not proved – Appeal dismissed.
It has been observed in umpteen authorities i.e. case titled P.J. Chacko v. Chairman, Life Insurance Corporation of India, (SC) 2008(1) R.C.R. (Civil) 127 “B. Insurance Act, 1938, Section 45 – Policy taken by insured giving incorrect information about his health – Insurance Company can repudiate the Policy within a period of two years – On expiry of 2 years policy was not capable of being called in question, inter alia on the ground that certain facts have been suppressed which were material to disclose or that it was fraudulently been made by the policy holder or that the policy holder knew at the time of making it that the statement was false.
It is further held in case titled L.I.C. of India v. Promila Malhotra (N.C.D.R.C.) 2003 (2) ALT 11 “Consumer Protection Act, 1986 Section 21 Insurance Act, 1938, Section 45 – Life insurance – Repudiation of claim – Suppression of material fact – More than two year s elapsed between date of policy and date of death – Policy cannot be questioned on the ground of misstatement after two years as per Section 45 of Insurance Act – Onus to prove fraudulent suppression not discharged by company – Contention that deceased was suffering from hypertension for the last 14 years remained unproved – Company liable under policy – Appeal dismissed.
It is further held in case titled Sunil Kumar v. Life Insurance Corporation of India, (Punjab and Haryana) 2016 (3) PLR 122 “Civil Procedure Code, 1908 Section 100 Insurance Act, 1978, Section 45 – Regular second appeal – Validity of – In instant case, insured furnished wrong information in the proposal form concealing that she availed leave on medical grounds – Held, policy came into force with effect from 24.2.2002 – Insured passed away on 20.1.2005 – There is no material on record to suggest that injury sustained by insured in the year 2000 had in any manner attributed to her death approximately after more than four years – There is no evidence on record that she did not recover from the said injury – There is no material on record that the said injury had any remote much less a close nexus with the death of the insured in January, 2005 – As the claim became due and payable in the year 2005, insurer shall be liable to pay interest @9% per annum from the date, the amount became due till its actual payment – Appeal allowed. Insurance lawyer in chandigarh
It is further held in case titled Life Insurance Corporation of India v. Smt. Asha Goel, (SC) 2001(1) R.C.R. (Civil) 347 “13. Coming to the question of scope of repudiation of claim of the insured or nominee by the Corporation, the provisions of Section 45 of the Insurance Act is of relevance in the matter. The Section provides, inter alia, that no policy of life insurance effected after the coming into force of this Act shall, after the expiry of two years from the date on which it was effected, be called in question by an insurer on the ground that a statement made in the proposal for insurance or in any report of a medical officer, or referee, or friend of the insured, or in any other document leading to the issue of the policy, was inaccurate or false, unless the insurer shows that such statement was on a material matter or suppressed facts which it was material to disclose and that it was fraudulently made by the policy-holder and that the policy- holder knew at the time of making it that the statement was false or that is suppressed facts which it was material to disclose. Insurance lawyer in chandigarh
It is further held in case titled Ram Dulari Devi v. Life Insurance Corporation of India (Jharkhand) 2010 AIR (Jharkhand) 45 “Constitution of India, 1950 Article 226 Insurance Act, 1938, Pre., Section 45 – LIC policy – Death of insured – Repudiation of claim of petitioner based on certificate given by Medical Officer for period on leave which is treated as material mis-statement of fact – Challenged by writ petition – Held, deceased policy holder was under treatment for said period – Neither it was a case of concealment of any serious operation undergone nor – Being on medical leave by itself cannot amount to suppression of material facts – Moreover, policy cannot be called in question on ground of mis-statement after lapse of two years – Impugned order quashed – Petition allowed. Insurance lawyer in chandigarh
It is further held in case titled Manju Devi v. Life Insurance Corporation of India (R.S.C.D.R.C.)(Jaipur) 2009(50) R.C.R. (Civil) 379 “Consumer Protection Act, 1986 Section 2(1)(g) Life Insurance – repudiation of claim on ground of suppression of material facts – Contention raised that deceased chronic alcoholic not disclosed – Deceased ever took treatment from hospital for disease of ALD CLD/admitted in hospital, not proved – Concealment of fact that deceased addicted to alcohol, not amount to fraudulent suppression of material facts – Repudiation of claim not justified – Deficiency in service established – Death took place after 2 years of issuance of policy, complainant entitled to protection under Section 45, Insurance Act – LIC held liable under policy – Appeal allowed. Insurance lawyer in chandigarh
It is further held in case titled Daulat Ram v. Bharat Ins. Co. (Delhi) (DB) 1973AIR (DELHI) 180 “D. Insurance Act, 1938, Section 45 – Avoidance of insurance Policy – Insurance can not be allowed to avoid the liability under the policy on the allegation of concealment of facts which are not material when the policy has been admitted, that is also after more than two years.
It is further held in case titled L.I.C. of India v. Mohinder Kaur (NCDRC, N. Delhi) : 2003(2( C.P.J. 30 “Consumer Protection Act, 1986 Section 21(b) Insurance Act, 1938, Section 45 – Insurance – Repudiation of claim on the ground of concealment of material fact after two years of policy is prohibited – Policy issued on 31.10.1995, with commencement date 28.8.1995 – Repudiation letter issued on 30.9.1997, beyond two years from date of insurance being effective – Fraud/deliberate withholding of information, within the knowledge of insured not proved – Complaint rightly allowed by State Commission – No interference required – Revision dismissed.
Conclusion over Section 45 of Insurance Act Insurance lawyer in chandigarh
After the perusal it is clear that according to Section 45 of Insurance Act no policy of insurance can be repudiated after the expiry of two years by stating that statement of fact was concealed and suppression and it was fraudulent on the part of the policy holder. Further the Insurance Companies cannot Repudiation of claim by reason “Suppression of material fact” after more than two years elapsed between date of policy and date of death – Policy cannot be questioned on the ground of misstatement after two years as per Section 45 of Insurance Act.
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