LIC, better service please

THE Supreme Court in a ruling has directed the Life Insurance Corporation to offer better services.

The following observations made by the Supreme Court may be of interest to the large number of policy-holders in the LIC:

* The LIC's approach to the repudiation of a policy should be done with extreme care and caution.

* This should not be dealt with in a mechanical and routine manner.

* The public, in general, and crores of policy-holders look forward to a prompt and efficient service from the LIC.

* The persons in-charge of the LIC's management must bear in mind that its credibility and reputation depend on its prompt and efficient service.

* Repudiation of a claim could be done when a) there is suppression of facts that should be disclosed; b) the suppression is made fraudulently by policy-holders and c) the latter know at the time of making the statement that it is false.

* Mere inaccuracy and falsity of some items is not sufficient ground for repudiation of a claim.

* Unless the insurer can provide proof, there is no question of the policy being avoided on grounds of misstatements of facts.

* The burden of proof is on the insurer to show there was suppression or misstatement of material facts.

* The duty to disclose material information is a continuous one till the termination of the contract.

* If there is any misstatement or suppression of material facts, the policy could be called into question.

The Supreme Court was ruling against an appeal filed by the LIC in a 1979 claim case on the ground that the insured had suppressed facts of his illness while taking the policy. The Supreme Court had directed the LIC to pay the policy amount of Rs 100,000 with 15 per cent interest from 1980. -- BL Research Bureau