The National Consumer Disputes Redressal Commission (NCDRC) recently issued an order against Bajaj Allianz Insurance Company, directing them to compensate a policyholder for rejecting a claim based on purported missing information in a proposal form. The order, issued by Justice Sudip Ahluwalia, highlights the critical role of comprehensive disclosure in insurance claims and raises questions about the insurer's handling of the case.
Background: Claim Rejection and Consumer Complaint
The case involves a complaint filed by a Ludhiana-based manufacturing unit owner who faced health issues during a business trip to Canada, resulting in substantial medical expenses. The policyholder had obtained travel insurance from Bajaj Allianz, and upon hospitalization, he expected the bills to be covered by the cashless insurance policy. However, he later received a significant bill and, despite approaching the insurer, the payment was not cleared. The insurance company eventually repudiated the claim, citing pre-existing health conditions not disclosed in the proposal form.
Key Issues Raised by the Policyholder
The complainant argued that the insurance company failed to explain the terms and conditions of the policy at the time of issuance and did not provide an opportunity for clarification. Additionally, the policyholder disputed the authenticity of the proposal form, claiming it was not signed by him. The NCDRC, in its order, took note of the insurer's reluctance to produce the original proposal form and drew adverse inferences.
NCDRC Order and Rationale
The NCDRC upheld the State Consumer Disputes Redressal Commission's decision, emphasizing the insurer's responsibility to seek specific information in cases of ambiguous or non-specific questions on the proposal form. The order noted that leaving certain columns blank does not automatically imply suppression or non-disclosure, especially when the insurer accepts the premium and issues the policy without further inquiry.
Implications for the Insurance Industry
This order serves as a reminder to insurers about the importance of clear and specific queries in proposal forms and the need for due diligence before issuing policies. It also underscores the insurer's obligation to inquire further if faced with incomplete or ambiguous responses. The decision aligns with recent judgments emphasizing that insurers must actively seek clarification when faced with unclear or unanswered questions.
Insurers are urged to review their procedures for handling proposal forms, ensuring that any ambiguities are addressed before policy issuance. The case sets a precedent for consumer protection in insurance matters, emphasizing the need for transparency and fair dealing in the industry.
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