Courts’ relief to Punjab insurance consumers

Updated: Jul 10, 2011, 13:54 PM IST

Pankaj Sharma/Zee Research Group

The tendency of insurance firms to repudiate the claim of the insured has drawn flak from consumer courts in Punjab with the state witnessing two such cases last month. Both the cases involved Aviva Life Insurance as the insurance provider.

While one case involved a Non Resident Indian (NRI) who alleged his money was invested in the stock market despite his clear verbal instructions against doing so, in the other case a son was denied the claim upon the death of his mother who was insured with the company. In both the cases independent consumer courts in the state ruled in favour of the petitioner.

NRI Narinder Singh of Punjab in his petition alleged that he was misrepresented by an agent of Aviva Life Insurance. The agent of insurer allegedly invested Singh’s Rs 4,38,000 in four different policies linked to the market. One of these policies were also in the name of Singh’s wife Virpal Kaur.

Singh had alleged in his petition that he was illiterate, knew no English and was capable of only signing a document and that the agent had got his signature on some blank papers on the pretext that they (insurer) would transfer the single premium amount for investment from his account. He upon realizing that his money had been allegedly transferred to plans linked to the market asked the company for return of the invested money.

But after insurer allegedly refused to refund the amount invested Singh moved the district consumer forum in Shaheed Bhagat Singh Nagar of Punjab. The insurer however claimed in its defence in the court that Singh’s complaint was false, malicious and not maintainable.

The consumer court, however, offered relief to Singh. In its ruling consumer forum bench headed by its president LN Sharma said, “It had been proved that the entire amount of Singh had been wrongly withdrawn and invested in the so called Aviva Life Insurance policies illegally.”

After going through all the facts and evidences produced by both parties the forum noted that the insurer had not placed the copy of the policies issued in favour of Kaur (Singh’s wife) which meant the entire record had been created wrongly in order to misappropriate the deposit amount.

While allowing the complaint the forum also directed Aviva Life Insurance to refund the entire invested amount to Singh along with six per cent interest from the date of withdrawal of the amount till the date of payment was made. A compensation of Rs 20,000 for harassment was also awarded by forum.

In another case filed against Aviva Life Insurance in the state, the complainant was not allegedly allowed to get the claim of policy of his mother after she died. Three years after availing the ‘Life saver plus unit policy’ of Aviva Life Insurance, Sunita Gangwani died after suffering from ‘cervical cancer’.

After her death, being a nominee in the policy, her son Sumit Gangawani applied for claim. However, the insurer repudiated the claim on the ground that despite being a housewife her mother had wrongly mentioned in the proposal form that she was working as a manager in a company.

Aggrieved with the insurance company, Sumit filed complaint in district consumer forum in Ludhiana of Punjab. The forum bench headed by president TN Vaidya said, “In the present case the policy so obtained by the insured was not mediclaim policy and was a life saver policy which duly attracts the provisions of Section 45 of the Insurance Act, vide which the insurance company couldn’t call in question the policy on the ground of any misrepresentation in the proposal form after the expiry of two years from the date of policy.”

While declaring the insurance company as illegally having repudiated the claim, the forum directed the insurance company to set right the claim of the complainant under terms and conditions of the policy after taking in account the amount already paid. The forum also directed the insurance company to pay a compensation of Rs 5000 to the nominee.

Aviva Life Insurance in its official statement said, “We are yet to receive the certified and authentic order from the court. Once we receive the same, we will be in a better position to react and plan the way forward.” At Aviva mis-selling was viewed with all due seriousness and strict action was taken against any agent where this was proven, the statement claimed.

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