Case Title: Jaswinder Kaur vs DHFL Pramerica Life Insurance Co. Ltd.
Summary
The District Consumer Disputes Redressal Commission-I, led by Pawanjit Singh, found DHFL Pramerica Life Insurance Co. Ltd. liable for deficiency in service. The insurance company falsely denied the insurance claim, claiming the insured died of a heart attack, which was not covered by the policy. The District Commission found that the insurance company did not present sufficient evidence to contradict the fact that the insured died of a heart attack. The insurance company was ordered to reimburse the Complainant for both the insurance claim and Rs. 20,000/- as compensation, in addition to Rs. 10,000/- for litigation expenses. The Complainant’s complaint against the insurance company and the bank was dismissed by the District Commission. The insurance company argued that the cancellation of the existing disease was inconsistent with the insurance policy, and the bank denied liability for insurance claim resolution. The District Commission imposed liability on the insurance company for a service deficiency and directed the company to pay the Complainant Rs. 2,66,986/- with interest at 9% per annum from the date of claim repudiation.
About the case
The District Consumer Disputes Redressal Commission-I, Chandigarh bench, which is composed of Pawanjit Singh (President) and Surjeet Kaur (Member), found DHFL Pramerica Life Insurance Co. Ltd. liable for deficiency in service. The company falsely denied the insurance claim, claiming that the insured died of chronic kidney disease, which was not covered by the policy. The insurance company did not present sufficient evidence to contradict the fact that the insured died of a heart attack, as noted by the tribunal. The insurance company was ordered by the bench to reimburse the Complainant for both the insurance claim of Rs. 2,66,986/- and Rs. 20,000/- as compensation, in addition to Rs. 10,000/- for litigation expenses.
The spouse of Mrs. Jaswinder Kaur (“Complainant”) acquired a tractor for a living, which was financed by a loan of Rs. 2,82,573/- from IndusInd Bank (“Bank”). Her spouse applied for insurance from DHFL Pramerica Life Insurance Co. Ltd. (“Insurance Company”) in order to secure the loan, paying a premium of Rs. 1760.54/-. The coverage sum assured was Rs. 2,82,573/-, and the loan period was from 26.8.2019 to 25.8.2021. Tragically, her spouse passed away on 1.2.2020 as a result of a sudden heart attack. The insurance company did not process the insurance claim, despite the bank informing the Complainant that they have pursued the mortality claim. Despite the fact that her spouse had paid Rs. 87,486/- in EMIs, the bank demanded payment of the outstanding loan amount of Rs. 2,66,000/- from the Complainant one year after his death. The bank informed the Complainant that the loan contract had been terminated. The Complainant was notified by the bank that the insurance claim they submitted had been rejected. The insurance company failed to notify the Complainant of the repudiation of the insurance claim. The insurance company and the bank failed to respond satisfactorily to the Complainant’s numerous communications. Subsequently, the Complainant submitted a consumer complaint against the insurance company and the bank to the District Consumer Disputes Redressal Commission-I, U.T. Chandigarh (“District Commission”).
The insurance company acknowledged the facts of the case in response, but it justified its decision to deny the claim. It was alleged that the Complainant’s spouse failed to disclose his chronic kidney disease, hypertension, and diabetic mellitus type-2 at the time of policy issuance. The insurance company maintained that the cancellation of the existing disease was inconsistent with the insurance policy. Consequently, it argued that the claim was legitimately repudiated and, as a result, requested the dismissal of the complaint.
Conversely, the bank denied liability for insurance claim resolution, claiming that it exclusively offers financial support. It contended that the Complainant received satisfactory service during the loan procedure and repayments. It maintained that there was no deficiency on its part.
The District Commission observed that the coverage in force was payable to the claimant if an insured member perished during the policy’s coverage period, as per Plan A, subclause (a). The District Commission observed that the Complainant’s death was caused by a heart attack, not a chronic kidney disease. Additionally, the District Commission stated that the insurance company was responsible for demonstrating that the chronic disease was the primary cause of the heart attack, a task that the insurance company failed to fulfill in this instance.
Consequently, the District Commission imposed liability on the insurance company for a service deficiency. As a result, the District Commission directed the insurance company to pay the Complainant Rs. 2,66,986/- with interest at 9% per annum from the date of claim repudiation (29.6.2020). Additionally, it was mandated to reimburse the Complainant for Rs. 10,000/- in litigation costs and Rs. 20,000/- in compensation for mental anguish. The complaint against the bank was dismissed by the District Commission.
