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Times of India
04 Aug 2011
Jaipur , India

Insurance companies are exploiting consumers through illogical terms and conditions, the state consumer forum has said. The forum strongly criticised the conduct of insurance companies in not explaining the terms of insurance to the illiterate and poor villagers before registering them for health benefits under various policies.

A full bench of state consumer forum presided over by its chairman Justice Ashok Parihar came down heavily on a private insurance company which filed an appeal against the order of district consumer forum, Chittorgarh.

The insurance company had rejected the relatives’ death claim of a villager on the pretext that he concealed the fact that he was suffering from TB. The district forum, however, held the insurance company guilty of wrongfully rejecting the claim and awarded Rs 7 lakh as compensation along with cost.

Upholding the judgment of the district forum, Justice Parihar observed: “It has been noticed that nowadays insurance companies are mushrooming like anything, resulting in unhealthy business competition. The agent of the company is required to explain all the details and conditions of the insurance policy sought by the customer. A common man is not supposed to know all the niceties and technicalities of law. After accepting the premium and having entered into an agreement without verifying the facts, the insurance company cannot wriggle out of the liability merely by saying that the contract was made by misrepresentation and concealment.”

“The insurance policies should not be issued and repudiated in a casual mechanical manner. The policy entails liability on both sides. It is rather exploitation of the customer and more or less a fraud on the public,” the bench observed.

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