The National Consumer Disputes Redressal Commission (NCDRC) has directed IRDA to look into the role of an agent selling life insurance policies. Further, it may revise the proposal forms with the issuance of fresh instructions to bring to the notice of the customers that non-disclosure of medical conditions will result in rejection of the insurance claim.
On the appeal of HDFC Standard Life Insurance Company Limited, a bench of Dr. SM Kantikar and Member Binoy Kumar in its judgment observed that this would go a long way in saving the life assured from unnecessary mental agony and expenses. In this appeal, the order of the Jaipur-based State Consumer Disputes Redressal Commission was challenged, in which the decision was given in favor of the consumer. The Apex Consumer Commission said that in this case, suppression of facts in the proposal form has vitiated the case of the complainant.
Complainant's Appeal
The complainant in his allegation said that the agent of the insurance company completely misled him while filling up his proposal form. Along with this, he had got him signed in the blank space without filling the complete form by taking him into confidence.
Insurance company argument
The insurance company had contended that the person concerned (deceased) obtained the life insurance policy by hiding information about his ailments. He was suffering from ailments since 2008.
The counsel for the respondent/complainant said the insurance company failed to prove that the diseases played a role in the death of the insured. Therefore, there was no ground for rejecting the claim.
Advice to issue new instructions on agent's responsibilities
The NCDRC set aside the order of the State Consumer Disputes Redressal Commission, allowing the appeal. It also advised the Insurance Regulatory and Development Authority of India (IRDA) to issue new guidelines on the conduct and responsibilities of agents while making life insurance policies.
It should be mentioned in the instructions that the agent should ask the customer to disclose all the diseases while filling out the proposal form. State what will be the consequences in case of non-disclosure of diseases? The proposal form can also be modified suitably.
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