Insurance companies to inform consumer on bouncing of cheque

The Delhi Consumer Commission also directed them to deposit a premium cheque within two days of receiving it

New Delhi: All insurance companies must inform an insured consumer in case a cheque issued by him for payment of a policy premium gets dishonoured, the Delhi Consumer Commission has said while directing them to deposit a premium cheque within two days of receiving it.

“All the insurance companies are directed to present the cheques of premium or any other payment received by them on the same day or on the next day,” the Commission said while sending a copy of its directions the insurance regulator IRDA for taking proper steps on the matter.

The Commission also ordered the insurance companies to intimate the issuer of a bounced cheque through their agents or on their own about the dishonouring of the cheque in writing so as to give the consumer a chance to make the payment through any other mode.

It passed the order on an appeal filed by the SBI Life Insurance Company Ltd, challenging District Forum’s order which directed it to pay Rs5,000 compensation to insured Ashok Sardana alongwith backdating of policy by one month.

The District Forum had directed the SBI Life to change the date of policy in question to 8 January, 2007 from of 8 February, 2007 as it held the delay in presentation of a cheque received from the consumer as a deficiency in service.

The insurance company alleged that the backdating was directed despite the fact that the premium cheque was encashed much later.

It noted that the delay in presenting the cheque and also in intimating about dishonouring of cheque would adversely affect the interests of the insured if incidents of theft of vehicle and damage of goods take place during this period.

Source:livemint