A city consumer commission in Chennai has ordered an insurance company, ICICI Prudential Life Insurance Co. Ltd, and its broker, Gennext Insurance Brokers Pvt Ltd, to pay over Rs 98 lakh in compensation to a woman, Swedha Pothiraj. Swedha’s husband, Sreyas RV, had purchased a Rs 1 crore term life insurance policy in April 2020 and paid the required premiums. However, when Sreyas died from acute-on-chronic liver failure in 2023, the insurance company rejected the claim, citing “non-disclosure” of medical history.
The insurer claimed that Sreyas had not disclosed a 2019 lab report, which they believed indicated a pre-existing medical condition. However, Swedha argued that the lab report was from a routine medical test required for her husband’s job-related international travel and not indicative of any prior illness or treatment. She stated that her husband had truthfully answered “no” to questions about significant tests, treatments, or hospitalizations during the online application process.
The Chennai North District Consumer Disputes Redressal Commission ruled in Swedha’s favor, directing the insurers to pay the sum assured of Rs 98.28 lakh, after deducting the refunded premium of Rs 1.71 lakh. The commission also awarded Rs 25,000 as compensation for deficiency in service, mental agony, pain, and suffering, and Rs 5,000 towards litigation costs. The commission’s decision was based on the fact that Sreyas had not withheld any information about his medical history, and the insurance company’s rejection of the claim constituted a deficiency in service.
The case highlights the importance of transparency and disclosure in insurance applications. The commission’s ruling emphasizes that insurance companies must have a valid reason for rejecting claims, and that policyholders must be protected from unfair rejection of claims. In this case, the commission found that the insurance company had failed to provide sufficient evidence to support their claim of non-disclosure, and therefore, the claim rejection was unjustified.