Consumer Commission Criticizes LIC Practices

Speedy Summary

• The Telangana state Consumer Disputes Redressal Commission upheld an earlier order directing Life Insurance Corporation of India (LIC) to pay ₹2 lakh to the kin of a policyholder, Jillapali Satyavathi.
• Ms. Satyavathi’s insurance policy, initiated in 2014 and revived in 2017 after financial difficulties caused lapses, became contentious following her death in March 2019.
• LIC had repudiated the claim by alleging suppression of her cervical cancer medical history prior to obtaining the policy.
• The District Consumer Commission previously ruled against LIC for deficiency in service and ordered payment of ₹2 lakh with additional compensation of ₹8,000 for costs and damages.
• On appeal, the State Commission dismissed LIC’s objections and criticized its attempt at denying claims despite being aware of Ms. Satyavathi’s medical condition during revival and issuance stages.
• The State Commission termed LIC’s conduct as “deception” and contrary to principles governing good faith in insurance contracts.

Indian Opinion Analysis
This case serves as a spotlight on how consumer protection laws aim to safeguard vulnerable populations from corporate actions perceived as unjust or exploitative. In this instance, both district and state commissions emphasized accountability among insurers like LIC when dealing with clients facing economic hardships or critical health conditions.By dismissing LIC’s arguments surrounding non-disclosure while highlighting flaws within their processes (e.g., failure to act against agents enrolling policies under questionable circumstances), judicial bodies reinforce trust-based principles inherent in insurance contracts.

The outcome could have broader implications for improving insurer practices nationwide-prompting stricter adherence to ethical standards when issuing policies-and may further empower individuals using legal recourse mechanisms for redressing grievances effectively.Read more: Source Link