#Bank as Agent

When a bank acts as an insurance agent and compulsorily enrolls a loan borrower in a policy, the borrower is a consumer under the Consumer Protection Act, 1986. The commission ruled that even if the risk location was incorrectly stated in the policy, the insurer cannot deny liability if both parties acted on a shared understanding of coverage - a critical win for small business owners caught in banking-driven insurance mandates.

WB State Consumer Disputes Redressal Commission holds banks acting as insurance agents strictly liable for negligent misrepresentation in proposal forms, apportioning liability between bank and insurer for claim repudiation. The ruling reinforces the principle of uberrima fides and protects borrowers from procedural lapses by lending institutions.