Insurance Claims Management Repudiation of Claims

V.JAYALAKSHMI

Repudiation of claim
Insurer to establish suppression of material fact by policyholder deferring considerations charge extra premium conditional acceptance decline the proposal Extreme action by insurer Cogent evidence adverse publicity

National Consumer Redressal Commission

Insured to approach court Deficiency of service Grounds of deficiency: Rejection of claim without intimation of reason Decision taken arbitrarily Without due application of mind Otherwise than in good faith

Other grounds for Rejection

Violation or contravention of any stipulated condition in the policy Case: Dharamvir Anand vs LIC 1998- suicide clause operative Death by suicide occurred within 3 years from the DOI of policy Refund of premium only will be paid If suicide within one year, suicide clause applicable

Evidence to Title

Important to ascertain the TITLE to receive policy money

Simplest kinds of evidence to title is by Nomination u/s 38 Assignment u/s 39 of Insurance Act of 1938

Nomination
Person

or persons who can receive policy

monies Valid discharge to the policy in case of death of the life assured during the period of policy On maturity, nomination is ineffective

Nomination . methods
Making suitable entries in the proposal Endorsement Effective only if communicated and registered in the company records Can be done only by policyholder on his own life and not otherwise Assigned policy assignee cannot nominate If policy obtained in the name of a child, the child cannot nominate till majority

Nomination . methods Child can nominate after attaining majority Nomination can be made In favour of one or more persons - life assured not to indicate shares of policy monies for individual nominees In favour of minor appointee to take care if death occurs during minority before maturity date

Nomination . methods

Assured can deal with the policy in whatever manner he may desire without the consent of the nominee

Nomination once made can be changed at will at any time but before policy matures for payment

Automatic cancellation of Nomination

Cancellation or further change of nomination Assignment in favour of third party Assignment in favour of insurance company for a loan out of surrender value, nomination WILL not get cancelled A will

Nomination
Nomination provisions shall not apply to any policy to which section 6 of MWPAct 1874 applies Nomination in favour of one near or dear Stranger nominee suspicious, absence of insurable interest In Joint Life Policy nomination not required money payable to surviving life Joint nomination valid if simultaneous death of both lives in a common calamity

Nomination advantages
Instrument

created by insurance law Secure immediate payment of policy monies by insurer without prejudice Insurer need not bother about the entitlement to succeed the estate of the deceased life assured Proceeds of the policy not vested in the nominee though payable to him/her

Section - 39
Policy monies do not become a part of nominees ESTATE before or after the policy matures In SABARMATI DEVI vs USHA DEVI

Mere nomination does not have the effect of conferring on the nominee any beneficial interest in the amt payable under the policy Nominee authorised person to collect the payment to discharge the insurer Amount under the policy payable to LEGAL HEIRS

DEATH OF NOMINEE

Nominee survives the assured but dies before receiving the policy amount Evidence of title should be called for the estate of the deceased assured and not for the estate of the deceased nominee

Several nominees

U/s 39(6) of Insurance Act 1938

Policies monies shall be payable jointly to the nominee / nominees who survive/s the assured

Where Nominee is a Minor

As per Insurance Amendment Act, 1950 Life assured can appoint any person as APPOINTEE to receive the policy monies secured by the policy if assured dies If no appointment of appointee is made, during the period of minority, if the life assured dies, the amount SHOULD NOT be paid to the Guardian appointed / natural but should be paid only to the LEGAL HEIRS

Nomination during period of Incapacity When an assignment / nomination is made by a person who executed was Mentally deranged Otherwise incapacitated to contract

Such assignment / nomination should not be acted upon

Questions
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