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Insurance company to pay widow Rs 5 lakh for falsely denying claim

An insurance company was held guilty of deficiency of service for falsely denying the claim of a widow on the grounds that her husband had defaulted on the policy premium. LIC of India has been directed to pay Komal Kewalramani Rs 5.05 lakh with 8% interest and an additional Rs 10,000 as costs.

The insurance company had filed an appeal in the Maharashtra State Consumer Disputes Redressal Commission in 2009, after a district forum passed an order against it.

Komal's husband, Ashok, had procured the policy in March 2004, and paid a quarterly premium of Rs 9,500. Ashok died on December 10, 2004, following which his wife filed the claim. But in February 2006, the claim was rejected on the grounds that Ashok had not paid the premium due in September 2004. Komal contended that when Ashok had gone to pay the premium, the company officers had told him that as per the status report, the premium was already credited. Aggrieved with the rejection, Komal filed a complaint in the Thane district forum in 2007. The forum ruled in her favour.

In its appeal in the state commission, the insurance company iterated its stand. It said that though the record showed that the premium was paid, it was a mistake made by the agent. The insurance company also alleged that Ashok was dishonest considering the fact that if he was aware that he had not actually paid the premium and he could have approached the branch manager and deposited the amount.

The commission, however, observed that Komal's version was more credible than that of the insurance company.

"The district forum after going through the facts of the case has passed an order and we do not find any infirmity or illegality in the order," the commission said, while dismissing the insurance company's appeal.

Article referred: http://articles.timesofindia.indiatimes.com/2013-10-22/mumbai/43286677_1_district-forum-premium-widow-rs

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