The National Consumer Dispute Redressal Commission, chaired by AVM J. Rajendra, has held that the liability of an agent in the insurance claims process is limited to facilitating and forwarding the claim to the insurer. Once this role is fulfilled, the agent is not responsible for any deficiencies or delays in processing the claim, which become the responsibility of the insurer.
Summary of the incident
The plaintiff’s deceased husband had purchased a Janata Personal Accident Insurance policy for a period of 15 years from National Insurance Ltd/Insurance Company through GFTS Multi Services/Agent for a sum assured of Rs. 10 lakh. The deceased husband died in a fall during a festival. The plaintiff reported the death and filed a claim with the Insurance Company but the claim was not settled. Hence, she filed a complaint before the District Forum seeking compensation, interest and legal costs. The District Forum admitted the complaint and directed the Insurance Company and the Agent to pay the plaintiff the sum assured of Rs. 10 lakh on the policy of her deceased husband along with costs and 6% interest of Rs. 5 lakh. The Agent was not satisfied with the order and appealed to the Orissa State Commission, which dismissed the complaint. Hence, the Agent filed a revision petition before the National Commission.
The opposition’s argument
The insurer denied having received any communication or documents from the agent and opposed relief for the lack of documentation, arguing that the delay in filing claims was due to the agent’s non-cooperation. The agent argued that its role was limited to facilitating the insurance process and submitting documents and therefore should not be held liable.
Observations by the National Commission
The State Commission determined that the primary issue was whether there was any deficiency in service on the part of the agency in processing the complainant’s claim. The agency’s role was limited to forwarding the claim to the insurance company, which it did promptly. Since there was no evidence that the agency delayed processing the claim, the agency cannot be held liable for the deficiency in service.
As a result, the National Commission allowed the revision petition and set aside the order of the State Commission. As the insurance company did not challenge the order before the National Commission, it was directed to comply with the order of the State Commission.
Case Title: GTFS Multi Services Ltd. Vs. Smt. Pravati Behera
Case Number: RP No. 4/2021