The District Consumer Disputes Redressal Commission in Shivamogga has ruled in favor of Bhagya and Nagaraj, ordering the Life Insurance Corporation of India (LIC) to compensate them for the denial of an insurance claim related to their late brother’s policies. The complainants had purchased 11 insurance policies with a total sum assured of Rs. 11.5 lakhs, but when Shivu, the policyholder, passed away due to a heart attack, LIC rejected their claim, citing that he had concealed pre-existing medical conditions at the time of purchasing the policies.
The district commission issued notices to LIC and its officials, with some respondents failing to appear, while others attended the proceedings through legal representation. LIC’s legal counsel argued that the complainants had deliberately concealed information about Shivu’s prior health conditions and fraudulently obtained the insurance policies, justifying the rejection of the claim. However, the commission found that LIC had committed a deficiency in service, breaches of regulatory norms, and was liable to pay compensation to the complainants.
The commission’s ruling is a significant development, as it establishes that insurance companies owe a duty of care to policyholders and must conduct thorough investigations before rejecting claims. The decision also highlights the importance of consumers exercising their rights, as reflected in the Consumer Protection Act, and holding insurance companies accountable for their actions. In this case, the commission’s ruling is a strong indication that consumers will not be taken for granted, and that insurance companies must operate with transparency and accountability.