Direct Insurers To Make Policy Documents Available In Vernacular Languages: Kerala Consumer Forum Recommends To IRDAI

The District Consumer Disputes Redressal Commission, Ernakulam (Kerala) has made a recommendation to the Insurance Regulatory and Development Authority of India (IRDAI) to issue an advisory to all insurers to make insurance policy documents available in vernacular language of the proposer.The Bench of D.B. Binu (President), V. Ramachandran and Sreevidhia T.N. passed the order while considering a complaint alleging deficiency in service and unfair trade practice by Kotak Mahindra Old Mutual Life Insurance Ltd.The complainant had availed an insurance policy in 2012 by paying the first premium of Rs. 30,000 and renewed the policy next year by paying Rs. 29,551. As per the policy schedule, the policy was to mature in 2022 and the complainant approached the insurer with a written request for refund of the premiums paid. However, the same was rejected stating that the policy was not renewed.Aggrieved, the complainant approached the consumer forum. The insurer was proceeded against as ex parte for refusing to accept notice.The complainant made a case that the insurer did not disclose the fact that continued renewal of policy was a condition requisite to recover the premiums already paid and since he was unable to comprehend the policy written in English, was under the impression that whatever premiums was paid would be returned at maturity. He, thus, claimed compensation from the insurer and refund of the premium.The bench looked at the rejection letter issued by the insurance and noticed that as per the terms of the policy, premium would not be returned unless a minimum of three installments are paid. It had also mentioned that the insurance had lapsed and it was not revived during the revival window though notices were issued.The forum came to the conclusion that mere inability to read English or omission to read the document would not render the insurance contract void when the terms clearly stipulate that premium would be returned only upon payment of at least three premiums.It found that since the insurer acted in accordance with the policy terms, there is no deficiency in service. Therefore, the complainant was not entitled to any reliefs.It gave a word of caution to the policyholders to carefully review the insurance terms at the very inception and to maintain renewals on time.The forum also thought it fit to give a recommendation to the IRDAI, the statutory body established to regulate insurers and protect the interests of policy holders.It observed:“The Commission recommends that IRDAI consider issuing suitable directions/advisories to all insurers to:make available the policy contract, key product information/benefit illustration, and critical clauses on lapse/revival/surrender in a vernacular language chosen by the proposer; andobtain a clear, recorded acknowledgment of such vernacular disclosure at the point of sale.This recommendation is made in the interest of consumer protection and market integrity.”It directed the Commission's Registry to forward the certified copy of the final order to the IRDAI Chairperson.With respect to the complaint, the same was dismissed.Case No: CC No. 903 of 2023Case Title: Abdul Nazar K.P. v. Kotak Mahindra Old Mutual Life Insurance Ltd.Counsel for complainant: Adv. Mishal M. DasanClick to Read/Download Order

Direct Insurers To Make Policy Documents Available In Vernacular Languages: Kerala Consumer Forum Recommends To IRDAI

K. Salma Jennath

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