Telangana consumer commission rules Tata AIA must pay ₹1 crore death claim; insurer failed to prove policyholder knowingly concealed previous postponed proposal.
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A Telangana consumer commission ordered Tata AIA Life Insurance to pay a ₹1 crore death claim after rejecting the insurer's argument that the policyholder concealed a previous insurance proposal.
The Telangana State Consumer Disputes Redressal Commission, in a June 12 judgment, dismissed Tata AIA's appeal against a district order. The case involved Ramdas Vislavath, a retired central excise official who bought a Tata AIA Samporna Raksha policy with a ₹1 crore sum assured, starting October 2019. He died of Covid-19 in May 2021.
His wife, the nominee, filed a claim. Because the death occurred within two years, Tata AIA investigated and discovered that Vislavath had earlier applied for a ₹1 crore policy with ICICI Prudential Life Insurance in July 2019. That proposal was postponed after medical findings. Tata AIA's proposal form asked whether any insurance application had ever been declined or postponed. Vislavath answered No.
Tata AIA repudiated the claim, arguing suppression of material facts. It refunded the premium and treated the policy as void.
The state commission did not rule that an earlier proposal is never material. Instead, it focused on whether Tata AIA proved that Vislavath knowingly concealed the information. The commission found that the insurer produced documents about the earlier proposal and medical reports but did not prove the postponement had been communicated to Vislavath before he submitted the Tata AIA application. There was no evidence that the medical report was supplied to him or that he attended counseling about the adverse findings.
Tata AIA had also conducted its own medical examination before issuing the policy, giving it an independent chance to assess risk, the commission noted.
The commission distinguished a 2019 Supreme Court judgment that said previous insurance proposals can be material. In this case, the factual foundation for applying that principle was missing. The insurer had to show the postponement happened before the Tata AIA proposal, that the policyholder knew about it, and that he deliberately gave a false answer.
Tata AIA failed to establish conscious non-disclosure, the commission said. Suspicion about what the insured “must have known” could not replace evidence.
The district commission's order stands: Tata AIA must pay the ₹1 crore sum assured with 9% annual interest from January 10, 2022, plus ₹50,000 compensation and ₹10,000 litigation costs. A higher interest rate applies if payment is delayed beyond the specified period.
The judgment does not mean policyholders can leave previous insurance proposals undisclosed. The commission itself noted that such information can be relevant to an insurer's risk assessment.
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