Decided on November 24,2009

Life Insurance Corporation Of India And Ors Appellant
Rama Sood And Ors Respondents


- (1.) WHEN hearing in this case commenced, by referring to the complaint file, Mr. Dharmani, learned Counsel for the appellant forcefully urged that District Forum below committed grave error while allowing Complaint No.85/2007 on 26.9.2008, thereby directing his client to pay Rs.10,810/ - to the respondent with interest @ 9% per annum from the date of filing of the complaint i.e. 15.6.2007 till realization, alongwith cost of Rs.2,000/ -. Further according to him, initially it was an ordinary life insurance policy obtained by the respondent, and subsequent to it by paying extra premium she opted for getting benefit of critical illness rider to her existing life insurance policy. In this background, Mr. Dharmani further submitted that when the respondent paid extra premium, she is presumed to be aware of the scope of benefit, extent of insurance cover as well as of warranties, exclusions, exceptions and conditions of insurance cover. He further urged that all these things should be presumed to have been duly explained to, as well as understood by the respondent and it was only thereafter she had paid the extra premium to get benefit of critical illness rider to her existing life insurance policy.
(2.) WE specifically called upon the learned Counsel as to what he has to say regarding respondent having been put to notice before her extra premium was accepted, covering critical illness rider in the context of Annexure R.IV, dated 3.12.2005.
(3.) IN this behalf, it may be appropriate to mention that this is a circular from Life Insurance Corporation of India, Marketing/CRM Department, Central Office, 3rd Floor, Yogakshema, J.B. Marg, Mumbai 400 021, on the subject, Re: Procedure For Settlement of Claims under "Critical Illness Rider Benefit". Answer given by Mr. Dharmani very innocently was, that the respondent should be presumed to know that what are the diseases which are critical in nature and are covered under critical illness rider benefit and what not. Further according to him, fibroid in uterus is common disease and by no stretch of imagination it can be said to be a critical rider benefit. It is a matter of common knowledge that in the year 1956, Life Insurance Corporation of India Act was enacted by the Parliament with a view to consolidate the life insurance business which was at that point of time in the hands of numerous private players. The object of the Act was to march towards nationalization of life insurance business by entrusting it in the hands of a Corporation. It was an Act to provide for nationalization of life insurance business in India by transferring all such business to a Corporation established for that purpose and to provide for the regulation and control of the business of the Corporation and for matters connected therewith or incidental thereto. Infact, it is a beneficial piece of legislation enacted by the Government of India. With the passage of time to ensure that the object with which the Life Insurance Corporation of India Act, 1956 was enacted, Insurance Regulatory and Development Authority Act, 1999 was also enacted. Under this Act, Insurance Regulatory and Development Authority was constituted.;

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