Insurance – Liability of Insurer for Agent’s Misleading information and Misrepresentation
The complainant was the regular customer of HDFC Life for last 8 to 9 years. The agent of the respondents mislead and misrepresented the complainant and got her to invest Rs.40 lakhs in May 2015 assuring 9% p.a. interest with the belief that she would get Rs.43.60 lakhs by November, 2016.
However, subsequently after issuance of the policy it was found that the said agent had invested the amount in a pension policy instead of a fixed deposit. It was also found that the agent was involved in a fraud and mis-use of customer funds. Even the complainant was not eligible for such a pension scheme.
The complainant had asked for refund and also gave legal notice.
HELD that the Insurer is liable for the consequences of misrepresentation of its agent. The Insurer could have refunded the amount after deducting surrender charge of the policy because it was issued by fraud and misrepresentation. The inaction of the respondents in not acting on the refund letter and legal notice for cancellation of policy & for refund, amounts to deficiency in service.
The facts that the complainant was misled for investment in pension policy, the Insurer had initiated criminal proceedings against the agent clearly show that the complainant had suffered financial loss due to misrepresentation by the agent.
The State Consumer Commission granted Rs.10 lakhs for deficiency in service in not refunding the amount as soon as the complainant sought cancellation of the policy.
Judgment dated 31.5.2024 of the Karnataka State Consumer Disputes Redressal Commission in Complaint Case No.CC/388/2017 of Ms. Sumalatha Amarnath Vs. HDFC Life and another.
