One Sri P.Narsing Rao, working as Telephonic Mechanic in the Department of Telecommunication, took the above insurance policies from Hyderabad City Branch Nos. 11 and 12 under Hyderabad Division. The Life Assured expired on 16.09.2001. His wife Smt. P.Vimala Bai, who is the nominee under the policies, lodged a claim with the LIC. The claims were repudiated by the LIC on the ground that i) both the above policies were in lapsed condition due to non payment of premia due April & May 2002 and (ii) to consider the claims under Ex-gratia payment it was observed that the deceased suppressed the fact that before taking the policies, he suffered from Hypertension, CAD, Effort Angina which confirmed positive for TMT and took treatment in Medwin Hospital, Hyderabad. Smt. P.Vimala Bai, the complainant, represented to Zonal Office Claims Review Committee, Hyderabad for review. The ZO Claims Review Committee upheld the decision taken by LIC of India, Hyderabad Division. Aggrieved with the rejection of the claim, the complainant represented to this office. A personal hearing was arranged on 14.08.2003 at Hyderabad. Smt. P.Vimala Bai, wife and nominee of the deceased life assured attended the hearing. Sri B.V.S.Prasad, Manager (Claims) LIC, Hyderabad Division represented the LIC.
Observations of Ombudsman: -
I have carefully perused the papers placed before me and heard the arguments presented by both the sides.
a) Section 45 of Insurance Act 1938 is applicable under both the claims. The implication is that the LIC has to prove both materiality of the facts suppressed and fraudulent intent on the part of the life assured before repudiating the claim.
b) The LIC obtained discharge summary no 9701199 from Medwin Hospitals, Hyderabad. According to the discharge summary, it was observed that the life assured was treated in the hospital during the period from 07.02.1997 to 09.02.1997 as inipatient for 3 days and the life assured was diagnosed as “Hypertension, coronary ART DISEASE - EFFORT ANGINA, STRONGLY POSITIVE TMT”. It was also reported that the life assured was admitted with complaints of hypertension, chest pain since 15 days. The life assured was also reportedly advised a coronary angiography but preferred to have that done at a later date. Thus it is established beyond doubt that the life assured suppressed vital material information relating to his health and took the insurance policy knowing fully about his earlier treatment.
c) However, subsequent to this treatment for chest pain in Medwin Hospital at Hyderabad, the insurer did not submit any other case history or any treatment particulars for the chest pain or coronary artery disease. It is a fact that the life assured suffered chest pain and diagnosed as a patient of coronary artery in February 1997. Subsequently he took two insurance policies in the month of March 1999 i.e. after a clear gap of 2 years from the first episode of chest pain in the year 1997. The life assured survived up to 16.09.2001. This means that the life assured survived a total period of 4½ years from the date of first and only episode about which the insurer submitted the evidence. Thus I find that there was no malafide intention on the part of the Iife assured.
d) Since all the ingredients required under Sec.45 of the Insurance Act 1938 have not been fulfilled by the insurer for repudiating the claim, I feel that the action of the insurer in rejecting the claims in full is not justified.
e) In view of the above, I am of the view that ends of justice would be adequately met if the insurer accepts the claims for a sum of Rs.50,000 under each of the above policies under Ex-gratia.
f) I, therefore, direct the insurer to settle the claims for Rs.50,000 each under the above policies under Ex-gratia, invoking rule 18 of the Notification Governing the Scheme of Insurance Ombudsman.
The complaint is admitted as Ex-gratia for Rs.50,000 under each of the above policies.
Hyderabad Ombudsman Centre Case No. L/2024/02-03
Smt. Madamma Vs.
Life Insurance Corporation of India Aw ard Dated 8.10.2003
The life assured took an insurance policy for Rs.50,000 on 16.09.1999. The life assured died on 15.10.2000 due to Pulmonary Oedema-chronic Renal failure with End Stage Renal Disease- Hypertension. His mother Smt. Madamma, who is the nominee under the policy, lodged a claim for payment of the sum insured under the policy with the LIC. The claim was repudiated by LIC on the ground that the life assured before taking the policy was treated in Sri Satya Sai Institute of Higher Medical Sciences, Puttaparthi on 19.11.1998. The life assured diagnosed to be suffering from GUTB.RT. Calcified Non- functioning Kidney. LT HUDN & poorly functioning kidney with CRF, HTN. This being a vital material information, which was suppressed by the life assured while taking the policy, the LIC repudiated the claim. Smt. Madamma, the complainant and nominee represented to the Zonal Office Claims Review Committee, Hyderabad for review. ZO: CRC Hyderabad also upheld the repudiation action of the insurer. The claimant preferred a complaint to this office.
Observations of Ombudsman :-
I have carefully perused the papers placed before me and heard the arguments presented by both the sides.
a) Section 45 of Insurance Act 1938 is applicable under the claim. The implication is that the LIC has to prove both materiality of the facts suppressed and fraudulent intent on the part of the life assured before repudiating the claim.
b) The LIC obtained discharge summary no. 16819/98 from Sri Sathya Sai Institute of Higher Medical Sciences, Prashanti Gram, Anantapur Dt, Andhra Pradesh. According to the discharge summary, it was observed that the life assured was treated in the hospital during the period from 19.11.1998 to 02.01.1999 as inpatient and the life assured was diagnosed as “GUTB, RI, Calcified Non Functioning Kidney, LT HDUN and poorly functioning Kidney with CRF, HTN”. It was also reported that the life assured was admitted with complaints of increased frequency, Nocturia since 10 years, Hamaturia with clots on and off since 3 years. The life assured was also reported to have had Rt. Nephrore- terectomy and Rt.Utreteroureterostomy and DJ stenting. Thus it is established beyond doubt that the life assured suppressed vital material information relating to his health and took the insurance policy knowing fully about his earlier treatments.
c) The life assured was admitted in BKF- Chande Nephro urology centre, Bangalore vide Hos. No.15754 and died there on 15.10.2000. The cause of death was pulmonary oedema, CRF with ESRD- HTN- Respiratory failure. Incidentally, this has nexus to the material facts suppressed by the insured. d) Had the life assured disclosed the material facts, which he had suppressed,
according to the underwriting norms of LIC, the Zonal Medical Referee opined that the proposal for insurance would have been postponed for one year. In other words his proposal for insurance would not have been considered immediately;
e) By suppressing the material facts, which were well within his knowledge, the life assured induced the insurer for accepting the policy in question.
f) Since all the ingredients required under Sec.45 of the Insurance Act 1938 have been fulfilled by the insurer for repudiating the claim, I do not find any reason to interfere with the decision of the insurer.
The complaint is dismissed.
Hyderabad Ombudsman Centre Case No. L/1098/2003-04
Smt. B. Lakshmi Vs.
Life Insurance Corporation of India Aw ard Dated 8.10.2003
Sri B.Lingaiah, aged 48 years, Clerk working in Singareni Collieries Ltd., took the above policy, details of which are mentioned below: -
Policy No. : 682457478
Date of Proposal : 26.06.1998 Date of Acceptance/FPR : 28.06.1998
Sum Assured : 50,000
Plan & Term : 123-12 Date of commencement
of risk : 28.06.1998
Date of Death : 10.11.2000 Date of Repudiation : 08.04.2002 Cause of death : Tuberculosis
Section 45 of Insurance Act 1938 is applicable under the claim