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Oriental Insurance’s refusal to honour a fire-insurance claim was struck down after the NCDRC ruled that a policy covering cotton bales owned by third-party mills still creates a valid insurable interest. The commission ordered payment of Rs 1.02 crore plus interest, signalling that insurers cannot rely on lack of ownership to reject claims.
The Supreme Court held that an insurer is not bound by an agent's unauthorized assurance of coverage when the statutory premium condition under Section 64VB of the Insurance Act, 1938, remains unfulfilled. The ruling underscores that premium payment is a condition precedent to coverage, overriding any agency representations, and overturns the NCDRC's award to the insured.
The NCDRC ruled that a discharge voucher signed under financial duress cannot extinguish a policyholder’s right to claim, and affirmed the insurer’s valuation of obsolete stock as permissible under the Insurance Act, protecting claimants from unwarranted claim denials.
The NCDRC has ruled that under Section 45 of the Insurance Act, an insurer cannot deny a life insurance claim after three years from the date of policy issuance, regardless of alleged misrepresentation or suppression of material facts. This reinforces the statutory protection for policyholders and ensures finality in claims, benefiting millions of Indian life insurance beneficiaries.