Koppal: Pulling up an insurance company for what it termed an unfair trade practice, the District Consumer Disputes Redressal Commission observed that insurers often rely on documents submitted while issuing policies but later search for reasons to reject claims when compensation is sought.The commission said that if an applicant furnished false information while purchasing insurance, the company should have rejected the proposal at the outset instead of issuing the policy and subsequently denying the claim on the same grounds.Making these observations in two separate cases, the commission cautioned the insurer against continuing such practices. It also imposed penalties of Rs 30,000 in one case and Rs 15,000 in another, directing the amounts to be deposited in the Consumer Welfare Fund.The commission further ordered the insurer to refund the premiums paid by the deceased policyholders with 9% annual interest, besides paying compensation and litigation costs to the complainants.The orders were passed by commission in-charge president GE Saubhagyalakshmi and member Manjunath M Bammanakatti.In one case, Sharada Pawar sought payment of Rs 1.82 crore under two life insurance policies taken by her late husband. Bajaj Allianz Life Insurance Company rejected the claim, alleging that the policyholder had concealed a pre-existing illness and falsely declared an annual income of Rs 9 lakh despite holding a BPL card.In another case, Lalabi Khajakhan sought Rs 41.5 lakh under a policy taken by her late husband. The insurer denied the claim, contending that he had suppressed details of a pre-existing illness and falsely declared an annual income of Rs 80 lakh while holding an Antyodaya Yojana card.After examining both cases, the commission declined to direct payment of the insured amounts. However, it held that the insurer could not escape liability after issuing the policies and ordered refund of the premiums along with compensation and litigation expenses.In Sharada Pawar’s case, the insurer was directed to refund Rs 5 lakh with 9% annual interest from March 21, 2024. It was also ordered to pay Rs 25,000 as compensation and Rs 5,000 towards litigation costs.In Lalabi Khajakhan’s case, the commission ordered refund of the premium amount of Rs 1,04,506 with 9% annual interest from May 17, 2024. It also awarded Rs 10,000 as compensation and Rs 5,000 towards litigation expenses.Invoking Section 39(1)(g) of the Consumer Protection Act, 2019, the commission directed the insurer to deposit Rs 30,000 in Sharada Pawar’s case and Rs 15,000 in Lalabi Khajakhan’s case in the Consumer Welfare Fund.
