The Telangana State Consumer Disputes Redressal Commission came down heavily on an insurance company, and upheld an order of the District Consumer Commission directing the insurer to pay the assured sum of ₹2 lakh to a policyholder’s kin.
The Commission was dealing with an appeal filed by the Life Insurance Corporation of India (LIC). The complainant in the case, in the Khammam district commission, was Jillapali Durgaiah, an agricultural labourer.
Mr Durgaiah’s wife, Jillapali Satyavathi, also an agricultural labourer, had taken a policy in 2014. But, it lapsed as premiums could not be paid on account of financial difficulties. However, it was revived in 2017. Ms. Satyavathi died in March 2019, following which LIC repudiated the claim on the grounds that she had “suppressed” her medical history of cervical cancer tests and subsequent treatment at Basavatarakam Indo-American Cancer Hospital in Hyderabad before obtaining the policy.
The district commission had, in October 2021, held LIC liable for deficiency in service and directed it to pay ₹2 lakh along with ₹8,000 towards costs and damages.
The insurer appealed against the decision, and argued that the deceased had concealed important facts. However, the State Commission, headed by in-charge president Meena Ramanathan and Judicial Member V.V. Seshubabu, observed that the insurer was well aware of the policyholder’s medical condition at the time of issuing the policy but failed to act against its own agent who enrolled her while she was still under treatment.
The bench strongly criticised LIC for attempting to repudiate claims while being willing to issue policies to vulnerable clients. The Commission termed such acts as “subterfuge” and against the principle of good faith that governs insurance contracts.
“We are unable to digest the manner in which the opposite party treats their clients and the deceptions they are willing to carry through,” the Commission stated in the order. Commenting on repudiation of claims, the Commission pointed out, “Despite having all the information at the time of issuance, the policy was further revived and at the time of claim, the ugly head of repudiation rears up as their mascot.”
The Commission dismissed LIC’s appeal and allowed the complainant to withdraw the amount deposited by LIC, along with the interest accrued.
Published – September 03, 2025 01:15 am IST
