National Consumer Disputes Redressal Commission (NCDRC): C. Viswanath (Presiding Member) expressed that:
Section 50 of the Insurance Act imposes a statutory obligation on the part of the Insurance Company to issue notice before the expiry of three months from the date on which premium is payable and has not been paid and to give notice to the Policyholder informing him about the options available to him, unless the said conditions are set forth in the Policy.
The instant revision petition was filed under Section 21(1) (b) of the Consumer Protection Act, 1986 against the Order of Punjab State Consumer Disputes Redressal Commission.
Complainant’s son obtained a Personal Life Insurance Policy from petitioner 2 for a sum of Rs 2.70 lakh. On the said policy a quarterly instalment of the premium was fixed which was being paid through an agent. The complainant was the nominee.
Complainant’s son died in a road accident. Later the insurance company appointed a surveyor who demanded a bribe to make a favourable report, which the complainant did not pay.
Petitioner 1informed the complainant that since the premium due was not paid, therefore the claim of the complainant could not be considered.
On being aggrieved with the deficiency in service on the part of the petitioners, respondent filed a complaint before the District Forum.
District Forum concluded that there was no deficiency in service on the part of the petitioners as the Insurance Policy of the deceased had lapsed and the complaint was dismissed.
Though the State Commission while accepting the appeal and setting aside the District Forum’s order observed that:
“Consequently, the Complaint filed by the Appellant/ Complainant is allowed and the Respondents are directed to pay the sum insured of Rs.2.70 lakh under the Policy to the Appellant and Rs.1.00 lakh on account of accidental death of the young and unmarried son of the Appellant. The Respondents are also directed to pay Rs.20,000/- as compensation and Rs.10,000/- as litigation expenses to the Appellant.
The Respondents shall comply the order within 45 days of the receipt of copy of the order.”
Complainant aggrieved with the State Commission’s order filed the present revision petition.
Commission observed that the entire case revolved around Section 50 of the Insurance Act, which states as follows:
“50. Notice of options available to the assured on the lapsing of a policy:
An insurer shall (before the expiry of three months from the date on which the premiums in respect of a policy of life insurance were payable, but not paid), give notice to the policy-holder informing him of the options available to him (unless these are set forth in the policy)”.
Bench observed that the petitioner’s main issue was that the premium was payable on 06-03-2007 and even during the grace period it was not paid. Policy stood lapsed at the end of 31st day from the date of premium fell due.
Further, since the complainant did not apply for reinstatement, no benefits under the policy could be given to them. Petitioners kept notifying the complainant about the policy being lapsed and were also informed about the reinstatement option.
Later on not receiving any information from the insured, the policy lapsed and the same was notified to the complainant.
Hence, the Commission found that the petitioners had acted in accordance with the terms and conditions of the Policy, therefore the complaint deserved to be dismissed.
District Forum’s Order was upheld.[Tata AIG Life Insurance Company Ltd. v. Kishan Lal Arora, Revision Petition No. 4415 of 2013, decided on 01-02-2021]