Agent’s Negligence Costs LIC as Widow Wins Case for Denied Insurance Claim
Nagpur, India: The District Consumer Disputes Redressal Commission (DCDRC), Nagpur, has ruled against the Life Insurance Corporation (LIC) of India and its agent for unfairly denying an insurance claim. The commission ordered them to jointly compensate a Nagpur widow with ₹1.2 lakh, citing deficiency in service and unfair trade practices.
Jayashri Francis, a resident of Amravati Road, filed the complaint after LIC rejected the insurance claim following the death of her husband, Sunil Francis. He had purchased a 20-year LIC policy in 2014 and paid the first two premiums of ₹4,396 each. In May 2015, he reportedly handed over the third premium to agent Rupesh Bhede, but the amount was neither deposited nor was a receipt issued.
In September 2015, Sunil died of a heart attack. When Jayashri sought the insurance claim, LIC informed her that the policy had lapsed due to non-payment. She later presented an audio recording in which the agent admitted to collecting the third premium.
The commission, comprising President Sachin Shimpi and Member Balkrushna Chaudhari, found that LIC had failed to send reminders before the policy lapsed and did not act on the complaint or investigate the agent’s conduct. The Bench held LIC responsible for the actions of its agent and criticised insurance firms for accepting premiums through agents during policy sales but later denying accountability during disputes.
Commission’s Order:
-
LIC to pay ₹1,00,000 with 9% interest to Jayashri Francis.
-
An additional ₹20,000 awarded for mental distress and legal costs.
The commission described LIC’s actions as a clear case of negligence and legal evasion, reinforcing that insurers must uphold their responsibilities and ensure fair treatment to policyholders and their families.
-t-thumb.jpeg)
-t-thumb.jpeg)
