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SC: Can't suppress material facts while availing life insurance
TIWN
SC: Can't suppress material facts while availing life insurance
PHOTO : TIWN

New Delhi, Oct 22 (TIWN) The Supreme Court has said that a contract of insurance is of utmost good faith and a proposer who is keen to obtain a policy of life insurance is duty-bound to disclose all material facts.

A bench comprising Justices D. Y. Chandrachud, Indu Malhotra and Indira Banerjee said: "A contract of insurance is one of utmost good faith. A proposer who seeks to obtain a policy of life insurance is duty-bound to disclose all material facts bearing upon the issue as to whether the insurer would consider it appropriate to assume the risk which is proposed."  The top court emphasised that it is with this principle in view that the proposal form requires a specific disclosure of pre-existing ailments, which will enable the insurer to arrive at a considered decision based on the actuarial risk.  The top court set aside the March this year a verdict of the National Consumer Disputes Redressal Commission (NCDRC) which dismissed an insurance firm plea challenging the order asking it to pay full death claim along with interest to the mother of the deceased. The insurance company informed the top court during the pendency of the proceedings the entire claim was paid.  The bench, taking into account the age of the deceased's mother who is s

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