The National Consumer Dispute Redressal Commission (NCDRC) has held the Life Insurance Corporation of India (LIC) liable for deficiency in service. The issue arose when a policyholder was not provided with a policy document, and their claims were not settled in a timely manner. The policyholder filed a complaint with the NCDRC, alleging that LIC had failed to provide a policy document, which was a mandatory requirement under the Insurance Act, 1938. The policyholder also claimed that LIC had not fulfilled its obligation to settle their claim in a reasonable time frame, as required by the Third Schedule to the Code of Civil Procedure, 1908.
The NCDRC considered the policy document as a vital component of the insurance contract, and its non-provision was a serious deficiency in service. The commission also held that the failure to settle the claim in a reasonable time frame was also a deficiency in service. The NCDRC directed LIC to pay a compensation of Rs. 1,50,000 to the policyholder, with 12% interest from the date of the complaint. The judgment emphasizes the importance of insurance companies providing policy documents to policyholders and settling their claims in a timely manner.