Cancelling the policy at the stage of claim,how far correct  

(Section 45 of Insurance (amendment )Act 2015)

Can insurance recall the policy at the stage when claim filed ?

Cases coming before the commission rejecting the claim under section 45 of Insurance Act either stating fraud and not refunding premium amount or under misrepresentation or concealment of facts and refunding premium.

Discussion on case law ; Facts and circumstances decide this factor

What is law

Recalling policy on two grounds only within three years and with prior notice

45 (1) No policy of life insurance shall be called in question on any ground whatsoever after the expiry of three years from the date of the policy,

 How three years calculated

a)from the date of issuance of the policy

b) the date of commencement of risk or

c)the date of revival of the policy or

d) the date of the rider to the policy,

whichever is later

What is fraud under the Act  

 the expression "fraud" means any of the following acts committed by the insured or by his agent, with intent to deceive the insurer or to induce the insurer to issue a life insurance policy:—

(a)    the suggestion, as a fact of that which is not true

(b)   the active concealment of a fact by the insured having knowledge or belief of the fact;

(c)     any other act fitted to deceive; and

(d)     any such act or omission as the law specially declares to be fraudulent.

 

Is silence considered misrepresentation or concealment of fact ?

(e)    Mere silence as to facts likely to affect the assessment of the risk by the insurer is not fraud, unless the circumstances of the case are such that regard being had to them, it is the duty of the insured or his agent keeping silence, to speak, or unless his silence is, in itself, equivalent to speak.

Who is to prove no fraud ?Its the insured to prove

 

What is non-disclosure of material fact?

SC IN tha matter of Asha rani v/s LIC of india 2009 

·         Insured concealed the material fact

·         Fact so concealed was of such importance that insurance may not have issued policy

·         The facts so alleged having concealed was known the the insured

Who is to prove misrepresentation –Insurance company

Duty of Insurance Company to notice

Insurer shall have to communicate in writing to the insured or the legal representatives or nominees or assignees of the insured the grounds and materials on which such decision to repudiate the policy of life insurance is based:

Supression of Material Fact & fraud are two different things ,action also different

·         That in case of repudiation of the policy on the ground of misstatement or suppression of a material fact, and not on the ground of fraud, the premiums collected on the policy till the date of repudiation shall be paid to the insured or the legal representatives or nominees or assignees of the insured within a period of ninety days from the date of such repudiation.

 

 

 

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