Life insurance companies won three cases in the Supreme Court last week as it upheld the rejection of claims on various grounds. In its judgment in one of these three cases, Reliance Life Insurance Co vs. Rekhabai, the court set aside the order of the National Consumer Commission which allowed the claim.
The deceased had taken life policies from both Reliance and Max New York. The wife collected money from Max and then approached Reliance with a claim. Reliance stated that her husband had not disclosed that he had another policy, which was against the principle of utmost good faith in insurance law.
The court accepted the argument. It also rejected her excuse that the policy was filled up by the insurer’s agent and her spouse had only signed it. The court stated that when the form is filled up, the agent was not acting on behalf of the insurer but as that of the insured. The court, however, allowed the woman to keep Rs. 5 lakh paid by the insurer according to its interim order.
