Insurance Claim Repudiation: Kurnool Consumer Commission Directs ICICI Lombard To Pay ₹50 Lakh
The District Consumer Disputes Redressal Commission, Kurnool, comprising President Karanam Kishore Kumar and Members N. Narayana Reddy and S. Nazima Kausar, has held ICICI Lombard General Insurance Company Limited liable for deficiency in service for repudiating a life insurance claim without establishing a valid and substantiated ground under the policy.
Facts
The complaint was filed by Yellala Jagadeeshawara Reddy, brother and nominee of late Divakar Reddy Yellala, who had obtained a life insurance policy from ICICI Lombard with a sum assured of ₹50 lakh. The policy commenced on December 19, 2024 and was valid until December 18, 2025, upon payment of a premium of ₹4,767.
On April 14, 2025, while the insured was travelling on his motorcycle, an unknown vehicle allegedly hit the motorcycle. He sustained bleeding injuries and died at the spot. The FIR, inquest report and post-mortem report established the occurrence of the accident and resultant death, with the post-mortem report recording the cause of death as “Head Injury.”
The complainant submitted the claim form to the insurer. However, ICICI Lombard rejected the claim, stating that scrutiny and verification had revealed alleged misrepresentation of facts for obtaining the insurance benefit.
The complainant approached the Commission seeking ₹50 lakh towards the sum assured, 24% interest from the date of death, ₹1 lakh compensation for mental agony and litigation costs.
Contentions of the Parties
ICICI Lombard contended that the complainant had failed to furnish documents required for processing the claim despite several communications. The insurer also relied on the non-submission of documents including the Police Final Report and other claim-related records, and maintained that there was no deficiency in service on its part.
Commission's Observations
The Commission noted that ICICI Lombard had not produced any postal receipts, acknowledgements, tracking reports, courier records or email delivery reports to establish that its alleged communications seeking additional documents were actually served on the complainant. Mere mention of the dates of such communications in the rejection letter was insufficient to establish service or that a reasonable opportunity had been given.
The Commission also relied on the insurer's own field investigation report by Dr. Penubakula P. Malleswara Rao, which found the incident genuine and the cause of death to be head injury, describing the case as “pro payable subject to police final report as per policy T/C.” The insurer failed to produce material showing that the accident was fabricated or that subsequent police proceedings disproved the accident, altered the cause of death or otherwise disentitled the complainant from the policy benefit.
Further, the Commission observed that the insurer had neither identified the specific fact allegedly misrepresented by the deceased nor established how such alleged misrepresentation was material to the acceptance of the risk. It also failed to show that the absence of the Police Final Report extinguished or suspended its contractual liability.
Decision
Holding that repudiation/non-settlement of the claim without establishing a valid and substantiated ground under the policy amounted to deficiency in service, the Commission partly allowed the complaint.
ICICI Lombard was directed to pay ₹50,00,000 towards the sum assured, ₹20,000 as compensation for mental agony, and ₹5,000 towards litigation costs.
The Commission directed that if the insurer failed to comply within 45 days from receipt of the order, the ₹50 lakh sum assured would carry 9% per annum interest from October 6, 2025, the date of the complaint, until realization.
Complainant's Counsel: Sri S. Siva Rama Krishna Prasad
Opposite Party's Counsel: Sri P. Ramanjaneyulu