Insurance firm asked to pay Rs 2.5 lakh and interest for refusing claim on ground of ailment non-disclosure

The New Delhi district consumer forum has asked Max New York Life Insurance to pay Rs 2.5 lakh along with interest and compensation to a policy holder's nominee for repudiating claim on the grounds of non-disclosure of ailments.

The firm has been asked to pay half of the repudiated claim Rs 2.5 lakh, half of the repudiated claim amount, along with 9 per cent interest and a compensation of Rs 15,000 towards "harassment, mental agony and pain" caused to the claimant.

The New Delhi Consumer Disputes Redressal Commission termed the repudiation unjust and said the policy was issued after conducting proper medical examination and therefore the company cannot absolve itself of its liabilities by shifting onus on the insured person.

Kamla Devi had taken a policy with Max New York Life Insurance in 2010.

After her death, her nominee was denied the benefits of the claim, alleging that the policy holder was suffering from cardiomyopathy, but did not disclose it to the company while taking the insurance.

The commission said it would be unjust to allow the insurance company to shirk its responsibility to record about ailment of the insured.

It also said that the insurance company in its discretion could have rejected the application, but it opted and issued the policy.

"In the instant case, since the insured died and the policy was issued to her after medical examination, shifting the entire onus on the insured (now died) would tantamount to shifting of responsibility by the OP (opposite party) and does not absolve the OP of its liabilities.

"In our considered view, repudiation of claim in such circumstances is unjust," the commission said.