'Non-disclosure of other policies not fraudulent concealment'

Non-disclosure of other insurance policies cannot be considered as fraudulent concealment, the apex consumer commission said while asking an insurance firm to pay Rs 15 lakh to kin of a man whose claim was rejected.
The National Consumer Disputes Redressal Commission (NCDRC) asked the Aviva Life Insurance Company Ltd to pay the claim to Gujarat resident Rekhaben Ramjibhai Parmar, wife of the insured, late Ramjibhai Parashotambhai Parmar.
"In our opinion, the non-disclosure of other insurance policies does not fall within the ambit of ... The Insurance Act, as the concealment was neither wilful nor fraudulent," the commission bench headed by its president justice D K Jain said.

The apex commission, while upholding state commission's order allowing the plea of Rekhaben against the district forum's verdict, said the agent himself had admitted that it is the normal practice that in non-mediclaim policies, the question regarding existence of other insurance policies is not asked.
"By no stretch of imagination it can be held to be a material fact fraudulently suppressed, entitling the Insurance Company to repudiate the claim on the stated ground," the apex consumer bench said.
According to the complaint filed by Rekhaben, her husband had taken an insurance policy with the firm for Rs 15 lakh for the period of March 31, 2008 to September 30, 2009.

He was admitted to a hospital due to breathing trouble on April 13, 2008 which turned out to be pneumonia and he expired the next day itself, the complaint said.

The claim was repudiated on the ground that the insured had not disclosed information regarding other policies of more than Rs 20 lakh which he had taken from other companies.
The insurance firm contended that had it been declared, the Company would have got an opportunity to decide whether the policy was to be issued or not. Hence, they claimed that there is no deficiency of service on their behalf for repudiating the claim.

The district forum dismissed the claim of Rekhaben against which she approached the state commission which asked the firm to pay the claim and othe benefits payable under the insurance claim.
The company's revision petition was dismissed by the apex consumer commission.