South Delhi Consumer Commission Holds Tata AIA Liable For Cancelling Insurance Policies After Policyholder's Death On Frivolous Grounds

The District Consumer Disputes Redressal Commission, South Delhi, comprising Monika A. Srivastava (President) and Kiran Kaushal (Member), held Tata AIA Life Insurance Company Limited liable for unfair trade practice and deficiency in service for cancelling insurance policies nearly one year after the death of the insured on frivolous grounds. The Commission directed the insurer to release the insured amount to the complainant. Brief Facts The complainant's father, Late Anil Kumar, had purchased life insurance policies from Tata AIA Life Insurance Company Limited (Opposite Party) online through Policybazaar, with Jalaluddin (Complainant) named as nominee in two policies. The policies bearing Nos. C-267673005 and C-248654344 were issued in October-November 2021 and the premiums were payable monthly through ECS mode. The assured sums under the policies were Rs.5,77,575/- and Rs.3,46,545/- respectively. The complainant's father died on 14-12-2021 due to COVID-19. Since the insured had authorised ECS payments, two monthly premiums continued to be deducted even after his death. Thereafter, the complainant submitted claims under both policies along with relevant documents. However, the OP declined the claims citing mismatch of photographs and disparities in contact details. The complainant later received an email dated 30-10-2023 along with a letter dated 15-12-2022 addressed to his deceased father, wherein the OP stated that the policies had been cancelled and made null and void since inception due to disparities in KYC documents and contact details. Alleging arbitrary cancellation and deficiency in service, the complainant approached the District Consumer Disputes Redressal Commission, South Delhi, seeking payment of the insured amount along with compensation. Contentions of the Opposite Party The Tata AIA Life Insurance Company Limited contended that an independent investigator failed to verify the insured at the given address and discrepancies in contact details materially affected underwriting decisions. The OP further alleged that the complainant informed the insurer regarding the death only after a considerable delay and also sought change of payment mode after the insured's death. It was further contended that a sum of Rs.20,900/- had already been refunded towards premium payment. Denying any deficiency in service, the OP sought dismissal of the complaint. Observations & Decision The District Commission observed that the insurer had arbitrarily cancelled the policies nearly one year after the death of the insured on frivolous grounds. It noted that the OP failed to place on record any evidence showing that the cancellation letters were ever dispatched to or received by the insured. The Commission further rejected the insurer's contention regarding the alleged request for change of payment mode, noting that no such request letter had been produced on record. It also observed that no documentary proof regarding refund of Rs.20,900/- had been filed by the insurer. The Commission observed that the OP had frivolously repudiated the complainant's claim by alleging disparities in KYC documents due to a mismatch of photographs and discrepancies in contact details. It observed that the denial of the complainant's legitimate claim was totally unjustifiable and indulging in unfair trade practice. Accordingly, the Commission directed the insurer to pay the complainant the death benefits of Rs.5,77,575/- under Policy No. C267673005 and Rs.3,46,545/- under Policy No. C248654344, after deducting Rs.20,900/- towards the refunded premium amount, within three months, failing which the amount would carry interest at 5% per annum till realization. Case Title: JALALUDDIN vs TATA AIA LIFE INSURANCE CO.LTD CC NO. DC/83/CC/199/2024 Click Here To Read/Download Order

South Delhi Consumer Commission Holds Tata AIA Liable For Cancelling Insurance Policies After Policyholder's Death On Frivolous Grounds

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South Delhi Consumer Commission Holds Tata AIA Liable For Cancelling Insurance Policies After Policyholder's Death On Frivolous Grounds

Muhammed Razik

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