The judgment by the Hon’ble National Consumer Disputes Redressal Commission (NCDRC) in Oriental Insurance Co. Ltd. vs Karam Singh, has established a crucial precedent regarding insurance companies' obligation to properly communicate policy terms and conditions to their customers. This case firmly establishes the proposition that merely directing policyholders to visit a website does not constitute a valid communication of policy terms and conditions under Contract Law.

Case Background and Facts

The insured had been a loyal customer of the Insurance Company since 2010, consistently maintaining a Mediclaim Policy with coverage of Rs. 2,00,000 for himself and his family. He however, was unable to renew his policy for 2014-15 before its expiry, he later approached the insurer and renewed the policy after a 40-day gap, paying Rs. 3,369 for the period 2015-16.

The dispute arose when the insured underwent a knee replacement surgery for osteoarthritis in 2017, incurring expenses of approximately Rs. 3,30,000. A procedure, which the Insurer claimed, was excluded, citing an exclusion clause that prohibited joint replacement surgery coverage for the first 36 months from policy inception.

Insured complainant’s primary contention was that he had never received the complete terms and conditions of his policy - only a 2-3 page policy document containing the schedule and sum assured was provided to him. This became the crux of the legal battle that would establish an important precedent in insurance law.

The Critical Issue: Website Reference vs. Valid Communication

The most significant aspect of this judgment lies in paragraph 7, where the NCDRC addressed the insurance company's argument that policy terms were adequately communicated by directing customers to their website. The Commission found that both lower forums had correctly decided in favour of the insured, noting that

“the relevant terms and conditions of the Policy which excluded coverage from Osteoarthritis for the first 36 months from the Policy inception had not been communicated to him or brought to his notice”.

The court specifically observed that the policy schedule contained the instructions directing the holder to refer to the insured’s website for a copy of the terms and conditions. However, this reference was deemed insufficient to constitute proper communication of policy terms.

Judicial Precedent and Reasoning

The NCDRC relied heavily on its earlier decision in The Oriental Insurance Co. Ltd. vs. Satpal Singh & Anr. 2013, where it had categorically rejected the contention that asking proposers to visit the insurance company's website amounted to valid communication of terms and conditions. In that case, the Commission had made a particularly pointed observation, stating:

“It is a ridiculous attempt... It seems every driver/insured is a computer savvy..!!”

This earlier judgment established that insurance companies cannot absolve themselves of their responsibility to provide policy documents by simply directing customers to online resources. The Commission emphasised that 

“onus of proof lies upon [the insurance companies] to prove that policy, along with terms and conditions, was supplied to the Complainant”.

Legal Implications and Consumer Protection

The judgment reinforces several critical principles in insurance law:

• Burden of Proof: Insurance companies bear the responsibility to demonstrate that they have properly communicated all policy terms and conditions to their customers. Mere reference to websites does not satisfy this obligation.
• Accessibility and Inclusivity: The court's observation about computer literacy highlights an important equity issue - not all policyholders have the technical knowledge or access to navigate insurance company websites effectively.
• Physical Documentation Requirements: The judgment implicitly supports the need for insurance companies to provide comprehensive physical documentation of policy terms, rather than relying on digital alternatives alone.
• Consumer Rights Protection: The decision strengthens consumer protection by preventing insurance companies from using exclusion clauses that were never properly communicated to policyholders.

Conclusion

The NCDRC dismissed Insurance Company’s revision petition, upholding the decisions of both lower forums. The NCDRC found

“no grounds are made out to interfere with the well-reasoned decisions of both the Ld. Fora below”.

This judgment has significant implications for the insurance industry's practices. It establishes that:

Digital communication alone is insufficient for conveying critical policy information. Insurance companies must ensure physical delivery of comprehensive policy documents. Website references cannot substitute for proper documentation. Consumer protection laws favor accessibility over corporate convenience.

The decision reflects a broader judicial trend toward protecting consumers from unfair trade practices and ensuring that insurance companies cannot escape their obligations through technical loopholes or assumptions about customer digital literacy.

By firmly rejecting the notion that website references constitute adequate communication of policy terms, the NCDRC has reinforced the fundamental principle that insurance companies must proactively ensure their customers receive and understand all policy conditions. This judgment serves as a strong deterrent against insurance companies attempting to avoid claim liabilities by citing terms and conditions that were never properly communicated to policyholders, thereby strengthening the rights of insurance consumers across India.