Hyderabad: The Telangana Consumer Disputes Redressal Commission has ruled that an insurance company cannot arbitrarily cancel a policy without issuing proper notice, even after collecting premiums for two years. The case arose after HDFC Standard Life Insurance Company Limited repudiated a claim, citing the policyholder’s suppression of facts.
The Commission, however, rejected the insurer’s stand and directed the company to pay the assured sum of Rs 50 lakh to the nominee, along with Rs 1 lakh as compensation and Rs 25,000 towards litigation costs.
According to the complaint, Shankar had taken a Rs 50 lakh term policy in 2014. He passed away in September 2015. His wife, E Rajeswari, applied for the claim, but the company denied the benefit, alleging misrepresentation at the time of obtaining the policy. Challenging this, she approached the State Consumer Commission.
A bench comprising Judicial Member K Ranga Rao and Member RS Rajasree conducted the hearing.
Policyholder misrepresented facts, claims HDFC Life, Commission dismisses allegations
HDFC Life claimed that the policyholder had misrepresented facts by not disclosing another policy and by producing false income tax returns showing an annual income of Rs 21,000.
The Commission, however, dismissed these allegations, observing that the insurer failed to produce concrete evidence. It held that unsubstantiated accusations cannot be grounds to deny a genuine claim, particularly when premiums were duly collected.
With this order, the insurer must now release the policy amount and compensation to the nominee.
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