1.

Laser eye Surgery

When KP Desai underwent a laser eye surgery for correcting his eyesight, it cost him Rs
50,000. Desai had a health insurance policy with the United India Insurance Company since
1990, which he renewed every year. After the surgery in 1997, when he filed a claim for the
surgery expenses, the company rejected it stating that the surgery was purely cosmetic and
not covered by the insurance.
Is the decision of the insurance company right? If not, what should have been
the justified action? Give reasons. [Desai filed a complaint with the South Mumbai
District Consumer Disputes Redressal forum in 1997 and the judgment ruled in his favor
in April, 2004. The insurance company then filed an appeal with the Maharashtra State
Consumer Disputes Redressal Commission, where the judgment was upheld.]
2. Transfer of Car Ownership
Ashok Kumar purchased a second hand car in November, 2006, which was insured by New
India Assurance by the previous owner. Kumar did not inform the insurance company about
the registration transfer or get the insurance policy transferred to his name. When Kumar filed
a claim on the car being stolen in March, 2007, his claim was rejected on the grounds that the
claim was not in his name. Kumar filed a lawsuit.
Discuss the responsibilities of both the insured & insurer. [New India Assurance
filed an appeal with National Consumer Disputes Redressal Commission, which ruled in its
favor stating the IRDA regulation according to which the insurance company must
be informed about the vehicle transfer within 14 days, if not, the insurance
company is not liable to reimburse the claim.] IRDA regulations are clear-cut about
disclosures, especially with respect of transfer of the property being insured. So, it is important
to read through the policy offer document clearly to understand the rules for the transfer of
policies and the insurance company must be informed about any major changes.
3. Mr. A was working as postman in postal department & had a life insurance policy. The
life assured had produced voter I.D Card as age proof and the agent filled up the
proposal form. The Date of Birth mentioned was 1-1-1950. His actual Date of Birth was
1-8-1943. Had he declared his correct age, the proposal would not have been accepted.
He had deliberately understated his age. Mr. A died within six months from taking the
policy. The insurer discovered this fact after the death of Mr. A.
State the legal provision related to the above case. [Under the misstatement of age
or gender clause]
The deceased was a government servant and
deliberately understated his age to defraud the
respondent (Insurer), in order to accept the proposal
and there by misled the respondent in taking
proper underwriting decision.

The decision taken by the respondent (Insurer) in

repudiating the claim is not just and fair and
hence the policy will not be contested. Instead,
the death benefit will be adjusted to correctly
reflect the insureds age.

4. Mr. X while taking a life insurance policy had informed in great detail the state of his
health and habits due to which several Special Reports were called for and the proposal
was accepted with extra premium. The life assured died within ten months from the date
of proposal. The claim was repudiated on the basis of certificate of treatment,
prescription, letters of doctors and hospital. It was observed that all the
diagnosis/treatment commenced after 7 days from the date of acceptance of risk. [All
the documents proved that the deceased was not aware of his ailment at the
time of taking the proposal.]
On the basis of the above case discuss the conditions & provisions of life
insurance. Also, discuss whether the insurance company should pay the
claim or not. Give reasons.
The respondent (the insurer) was directed to pay the full claim amount.
5. Mr. Y was a government employee who had a life insurance policy. He died after 8
months of taking the policy. The deceased life assured had suffered from pulmonary TB.
The life assured had suffered from TB and did not mention the same in the proposal
form since he thought that TB is curable. When the deceaseds wife claimed for life
insurance amount, the claim was repudiated by the insurer.
Explain with appropriate reasons which principle of insurance has been
violated in the above case. Discuss whether Mr. Ys wife should receive the
claim from the company or not.
[UTMOST GOOD FAITH] The claim was repudiated by the insurer on the grounds of
non-disclosure of material facts. The complaint was dismissed and the decision of the
insurer in repudiating the claim was upheld.
6. Mr. A paid a premium of Rs 38,520 for a Rs 2.25 lakh fire cover from AB General
Insurance Co. for a stock of molasses. While the policy was still being validated, a
portion of the stock was burnt due to spontaneous combustion. The insurance company
rejected the claim on the grounds that the stock was not burnt by an actual fire. A
lawsuit was filed.
Discuss the case in light of the provisions of Fire Insurance. Also, state
whether Mr. A should receive the claim or not.
The insurance company was liable to pay damages. Insurance companies are liable to
pay for the damages to stock occurring due to fermentation, natural heating or
spontaneous combustion under a fire policy.