Role of agents soliciting life insurance policies needs to be looked into: NCDRC

The National Consumer Disputes Redressal Commission (NCDRC) recently advised the lnsurance Regulatory and Development Authority of lndia (IRDA) to issue fresh guidelines on the conduct and responsibilities of insurance agents as regards full disclosure and consequences of non-disclosure of medical conditions of customers [HDFC Standard Life lnsurance Co Ltd v Vishan Rathore]..Presiding member Dr. SM Kantikar and member Binoy Kumar reasoned that such clarity would avoid unnecessary mental agony and expenses to the insured."A fresh guideline needs to be issued, if need, by modifying the proposal form wherein it is clearly brought to the notice of the customer that non-disclosure of medical conditions will lead to repudiation." (sic).The Commission also reiterated that should there be suppression of facts in the proposal form, the insurance policy would be voidable by the insurer..The appeal was filed by an insurance company against an order of the State Commission in favour of a complainant who submitted that the insurance company repudiated his claim on the ground of concealing material information. "Hypertension and diabetes are not life-threatening disease. In present they are lifestyle disease," the State Commission had held while allowing the complaint..However, the insurance company argued that it had rightly repudiated the claim of the insurer on the ground of non-disclosure of material facts since he died due to a heart attack and a respiratory disorder, which had direct links with the undisclosed diseases of pancreatitis and diabetes.On the other hand, the respondent claimed that the appellants had failed to prove that the illnesses played a role in the death of the insured and thus, there was no reason to repudiate the claim. .NCDRC, while setting aside the order of the State Commission, noted that it was not legally tenable, and placed reliance on the case of Manmohan Nanda v. United lndia Assurance Co Ltd, where the the insured was directed to be indemnified by the insurance company only on the ground that he had disclosed his disease to the company. .On being informed by the complainant that the agent misled the insured, who signed on the dotted line in good faith, the Commission highlighted the importance of re-examining the role of agents. "In order to dispel all doubts, we are of the opinion that Insurance Regulatory and Development Authority of lndia (IRDA) should take up the matter in the interest of consumers," the order stated. .The appellant was represented by Advocate Joydeep Bhattacharya while respondent was represented by Advocate Hitesh Kumar..[Read Order]