#premium refund

The Punjab State Consumer Disputes Redressal Commission held that an insurer’s refund of premium without informing the insured constitutes a deficiency in service under Section 12 of the CPA 1986, leaving the policyholder uninsured at the time of loss. It affirmed compensation of ₹9 lakh with 8% interest, ₹2 lakh for mental agony and ₹21,000 costs, affecting policyholders who rely on timely renewal notices.

The Maharashtra State Consumer Commission ruled that an insurer's email reminder about a pending premium does not constitute revival of a lapsed life insurance policy, but holding onto premiums after denial of claim constitutes unjust enrichment, requiring full refund to the policyholder's estate. This sets a critical precedent for insurers: administrative communication cannot create contractual obligations, yet financial retention without coverage violates consumer rights under the Consumer Protection Act.