Court cannot adopt welfare approach in insurance cases, have to go strictly by terms of insurance policy: NCDRC

In cases concerning insurance claims, courts cannot adopt a beneficial or a welfare approach and must strictly go by the words used in the insurance policy, the National Consumer Disputes Redressal Commission (NCDRC) recently held [Manager, LIC v Dolly Jose].Presiding Member Sudip Ahluwalia explained further that consumer forums cannot go beyond the specified terms and conditions specified in the insurance policy under the guise of a social welfare interpretation. ."It is also settled law that in the matter of insurance claims, the courts cannot adopt a beneficial/welfare approach, and have to go strictly by the words used in the concerned Insurance Policy ... In view of the decision of the Apex Court in “Export Credit Corporation Limited (Supra)” there can be no doubt that the Forum which decides on an insurance claim cannot go beyond the specified terms and conditions specified within words used in the policy or the relevant scheme, and cannot under the guise of a Social Welfare Interpretation extend the meaning of those words artificially," the order stated..The Commission recounted that the Supreme Court, in Export Credit Guarantee Corporation of India Limited v. Garg Sons International, had earlier deprecated the liberal attitude adopted by NCDRC in awarding insurance claims in favour of the complainants, by extending the interpretation of the terms of the insurance policy beyond the words specified in the insurance document itself..The NCDRC made these observations while allowing a revision plea filed by the Life Insurance Corporation (LIC) against orders to pay an additional amount of ₹10 lakh to a claimant under a Double-Accident Benefit insurance policy. .In this case, the husband of the complainant held a ₹ 10lakh LIC policy. Further, this was a Double Accident Benefit policy, which meant that double the payment of the sum assured would be paid under the policy, if the insured dies due to an accident during the tenure of the policy.The husband of the claimant died on March 23, 2011 after falling from a train. After his wife submitted the claim before the LIC, she only received a sum of ₹10 lakh. She filed a complaint before the district consumer forum, where she argued that she was entitled to ₹20 lakh since the policy was a Double Benefit policy. Since her husband died in an accident, she must be given double the amount assured, the commission was told..Both the Kerala district consumer forum and the State commission passed order in favour of the complainant, prompting LIC challenge to these orders before the NCDRC..The LIC relied on a clause in the insurance policy which provided that the insurer would not be liable to pay any additional sum if the disability or death of the insured was caused by, “intentional self injury, attempted suicide, insanity or immorality, or whilst the Life Assured is under the influence of intoxicating liquor, drug, narcotic..."Pertinently, LIC claimed that the insured was under the influence of alcohol when the accident occurred. Hence, the complainant was not entitled to the double-benefit amount, the Commission was told. .The NCDRC agreed with the said position, noting that the said clause clearly excluded the payment of the Double Accident Claim if the insured was under the influence of intoxicating liquor, drug, narcotic, etc. While so, it was noted that the ethyl alcohol found in the blood sample of the deceased (135.08 mg/100ml) was 4 ½ times over the permissible limit in India."Consequently, there is no scope for this Commission to come to any other conclusion as there remains no room to take any sympathetic view when the specific condition regarding the deceased to have not been under the intoxication or under the influence of alcohol, is found to have been violated," it was held..Hence, the revision plea was filed by LIC challenging a 2016 Kerala State Consumer Dispute Redressal Commission order was allowed. .[Read Order]

Court cannot adopt welfare approach in insurance cases, have to go strictly by terms of insurance policy: NCDRC

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