Skip to main content

Insurance - Filling of claims within 7 days


Five years after losing her husband in an accident, Manisha Devi, the widow of a CRPF jawan, will finally get insurance after a district consumer forum in Delhi ruled in her favour.

Noting that the insurance company's action was "unjustified", District Consumer Disputes Redressal Forum (East) has asked Oriental Insurance Company to pay Rs 4.5 lakh as insurance to the widow and an additional Rs 1 lakh as compensation for "harassment, mental pain and agony".

The forum also directed the company to deduct the compensation from the salary of the branch manager who rejected Manisha's claim. "We direct that this amount of Rs 1 lakh shall be recovered by the insurance company from the salary of the branch manager who rejected the claim of the complainant... The amount of compensation is the result of an unjustified action of the insurance company authorities who rejected the bona fide claim of the complainant," the order passed by N A Zaidi, president of the forum, and T Vijayan, a member, said. The bench also remarked that "we have been observing in case of insurance companies that they are interested in prolonging the insurance and their main object is to deny the claim on one ground or the other, whether that ground is available or not".

Manisha had filed a complaint with the district forum in the capital in 2010, alleging the insurance company repudiated her claim. Vijay Kumar had two insurance policies amounting to Rs 4,50,500, in which Manisha was a nominee. Before approaching the east Delhi forum, Manisha had filed a complaint with Narnaul's district forum and the Haryana state consumer disputes redressal commission. The Narnaul district forum had dismissed the claim on the grounds of "lack of territorial jurisdiction" .

Manisha had sought Rs 1 lakh by way of compensation and Rs 50,000 as litigation expense along with the sum she was entitled to. The company said the "claim filed by the complainant was against the terms and conditions" stipulating that a claim made later than seven days from the date of loss will not be entertained. "The intimation of loss was received on June 11, 2007, whereas the accident had taken place on June 1, 2007," the insurance company argued.

But the forum said that in such cases the families are always in shock; so it takes some time before they can lay hands on the documents and think about filing the claim.

Most companies seem to be interested in prolonging the insurance and their object is to deny the claim, the bench said.

It is actions like these which put the insurance companies in such bad light. This mess when IRDA has clearly mentioned back in Sept, 2011, that "insurance companies not to mechanically reject claims on technical grounds, like delay in filing claim documents. 

IRDA has issued these directives following complaints that claims are being rejected on grounds of delay in intimation and submission of documents to insurers. 

"Rejection of claims on purely technical grounds in a mechanical fashion will result in policy holders losing confidence in the insurance industry, giving rise to excessive litigation," the regulator said in a communication to life and non-life insurance companies. 

Although the policyholders are required to file claims within a prescribed time frame, the IRDA said, "this condition should not prevent settlement of genuine claims, particularly when there is delay in intimation or in submission of documents due to unavoidable circumstances." 
Advising insurers to suitably enunciate their stand to condone delay on merit in policy papers, the regulator said "..such limitation clause (of filing documentation) does not work in isolation and is not absolute". 

It further said insurers should develop a mechanism to handle such claims with "utmost care and caution". 

Insurers, it said, must not repudiate claims unless the reasons of delay are specifically ascertained and recorded.

Besides, the insurers should satisfy themselves that the delayed claims would have otherwise been rejected even if reported in time."

In view of such unequivocal statement, the unyielding attitude of the insurance companies is unfortunate.

Comments

Post a Comment

Most viewed this month

The recovery of vehicles by the financier not an offence - SC

Special Leave Petition (Crl.) No. 8907  of 2009 Anup Sarmah (Petitioner) Vs Bhola Nath Sharma & Ors.(Respondents) The petitioner submitted that  respondents-financer had forcibly taken away the vehicle financed by them and  illegally deprived the petitioner from its lawful possession  and  thus,  committed  a crime. The complaint filed by the petitioner had been  entertained  by  the Judicial Magistrate (Ist Class), Gauhati (Assam) in Complaint Case  No.  608 of 2009, even directing the interim custody of the vehicle (Maruti  Zen)  be given to the petitioner vide order dated  17.3.2009.  The respondent on approaching the Guwahati High  Court against this order, the hon'ble court squashed the criminal  proceedings  pending   before  the  learned Magistrate. After hearing both sides, the Hon'ble Supreme Court decided on 30th...
7 comments
Read more

When debt is bona fide disputed and the defence is a substantial one, the court will not wind up the company

In SHITAL FIBERS LTD.  vs  INDIAN ACRYLICS LIMITED, as per the respondent, appellant had made a payment of Rs.61,83,218/­. However, there was an outstanding balance of Rs.8,92,723/­ as on 28.7.2008. Since despite repeated requests, balance amount was not paid, the respondent issued a statutory notice to the appellant. The same was duly responded to. As the payment was not made despite notice being duly served on the appellant, the respondent filed the aforesaid Company Petition seeking winding up of the present appellant for its inability to pay admitted debts. The learned Company Judge vide order dated 28.9.2015 admitted the Company Petition. However, while doing so, the learned Company Judge observed, that since the appellant was an on­going concern, an opportunity should be granted to it to settle the accounts with the respondent by 31.12.2015. Only in case of failure of the settlement, the citation was directed to be published. On appeal, the Division Bench of the High Cou...
Post a Comment
Read more

Abusing in-laws a ground for divorce: SC

Abusing in-laws and not allowing them to reside in the matrimonial home by a woman amounts to cruelty to her spouse, ground enough for grant of divorce, the Supreme Court has ruled while allowing an NRI's plea for legal separation from his wife. A bench of Justices Vikaramajit Sen and A M Sapre said such incidents could not be termed as "wear and tear" of family life as held by Madras High Court which had said that a couple must be prepared to face such situations in matrimonial relationship. The NRI had filed a divorce petition alleging that his wife was abusive to his family members and did not allow his parents and siblings to stay in his house when they visited the US. Referring to an incident, the husband told the court that his wife had once locked him and his sister out of the house and abused them saying they belonged to a 'prostitute family'. She refused to allow her sister-in-law to enter the house and even lodged a police complaint against her hu...
4 comments
Read more