 |
|
|
|
|
|
|
||||||
|
 |
 |
|
|
||||||||
|
|
|||||||||||
 |
 |
|
||||||||||
 |
|
|||||||||||
|
||||||||||||
Report No. 190 Final recommendations in regard to section 45 5.1.39 To summarise the final recommendations of the Law Commission in regard to section 45: (i) The period beyond which no repudiation of a life insurance policy on any ground whatsoever be fixed at five years. This should be a sufficient period for an insurer to check the veracity of the details provided by the insured at the time of issuance of the policy. After a period of 5 years after the coming into force of a life insurance policy, i.e., the date of issuance of the policy or the date of commencement of such policy or the date of the revival of such policy or the date of the rider to such policy whichever is later, no insurer can repudiate a claim thereunder on any ground whatsoever. (ii) The insurer can repudiate a policy of life insurance at any time before the expiry of a period of five years from the date of issuance of the policy or the date of commencement of risk or the date of revival of the policy or the date of the rider to the policy whichever is later on the ground of fraud. The insurer will have to communicate in writing to the insured or the legal representatives/ nominees/ assignees of the insured the grounds and materials on which such decision is based. The claimants will in such instance not be entitled to either the policy amount or the premium amounts. (iii) The insurer can repudiate a policy of life insurance at any time before the expiry of a period of five years from the date of the policy or the date of commencement of risk or the date of revival of the policy or the date of the rider to the policy whichever is later on the ground that the insured had made a misstatement of or suppressed a material fact, i.e., a fact material to the assessment of the risk, either in the proposal form or any other document on the basis of which the life insurance policy was issued or revived or a rider issued to it. While such repudiation will result in the claimants forfeiting the policy amount it will not entail their forfeiting the premium amounts collected on the policy. Thus in case of repudiation of the policy on the ground of misstatement or suppression of a material fact, and not on the ground of fraud, the premiums collected on the policy till the date of repudiation will be liable to be returned to the insured or the legal representatives/ nominees/ assignees of the insured. (iv) The misstatement of or suppression of fact will not be considered material unless it has a direct bearing on the risk undertaken by the insurer. The onus is on the insurer to show that had the insurer been aware of the said fact no life insurance policy would have been issued to the insured. (v) No repudiation of the policy to be permitted on the ground of fraud where the insured can prove that the suppression or misstatement of the material fact made was true to the best of his knowledge and belief or that there was no deliberate intention to suppress the fact or that such misstatement of or suppression of a material fact was within the knowledge of the insurer or the agent of the insurer. (vi) A person who solicits and negotiates a contract of insurance should be deemed for the purpose of the formation of the contract, to be the agent of the insurers, and that the knowledge of such person should be deemed to be the knowledge of the insurers. (vii) The insurer will have to communicate in writing to the insured or the legal representatives/ nominees/ assignees of the insured the grounds and materials on which the decision to repudiate a policy on the ground of misstatement or suppression of a material fact is based.    |
||||||||||||
|
||||||||||||
|
||||||||||||
 |
|
|||||||||||
 |
|
 |
|
|||||||||
Back