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'Public sector insurance firms defeating govt's objectives'

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Press Trust of India New Delhi
The apex consumer commission has imposed a punitive cost of Rs 10 lakh on a public sector insurance company for wrongly denying claims of several people, saying such firms "are always at their best in defeating noble objectives of any welfare scheme".

National Consumer Disputes Redressal Commission bench, presided by Justice V B Gupta, imposed the fine on New India Assurance Company Ltd which had entered into an MoU with the Haryana government relating to a scheme 'Devi Rakshak'.

The scheme insured economically weaker sections of the state to the tune of Rs 1 lakh following death or permanent disability of the bread-earner.
 

The NCDRC passed the order while setting aside an order of Haryana State Consumer Commission which had absolved the insurance company from paying money to the insured persons.

The state commission's order had come while setting aside a district consumer forum's order.

In its order, the apex commission noted that "in entire 'MoU', it is nowhere mentioned, that beneficiaries have to submit their claims within the period of 12 months."

"This plea of respondent company (firm) that claims were to be submitted within 12 months from the date of the accident is not sustainable at all, since no time limit has been prescribed in the 'MOU'," the apex commission said, while setting aside state commission's order.

"We must express our deep anguish at manner in which respondent (being a public sector undertaking) had been conducting this litigation. It is our common experience, that public sector insurance companies try to defeat genuine claims of the insured, by raising frivolous and non-existence objections. They are always at their best, in defeating the noble objectives of any welfare scheme, which are introduced by the government," it said.

According to the plea, the only bread earner of family of petitioners died in accident/unnatural death, during subsistence of the insurance policy.

The petitioners had applied for compensation. However, the company returned the claim files on ground that claims were not submitted within a year from the date of accident. Despite service of legal notice by petitioners, respondent failed to respond.

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First Published: May 17 2015 | 9:22 AM IST

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