Consumer Protection – Examining Homicide in the Context of Accidental Death Insurance

Introduction

Accidental death is an insurable event. Accidental death coverage is sold either as a standalone product or as a rider in term life insurance policies, which, in both cases, entitles the insured to an extra payout in case of death due to an accident.

An “accident” is typically defined by policy terms as a sudden, unexpected, and involuntary incident caused by external, visible, and forceful means. This definition is generically worded and can encompass a wide range of occurrences. Generally, policy terms do not exhaustively outline every scenario that would constitute an accident, though certain exclusions are specified to define the scope of coverage. These exclusions include death by suicide but usually not death by homicide. Many consumers knocked on the doors of the Consumer Forum seeking accidental death benefits in cases of death by homicide. This article shall examine, from the angle of consumer protection, whether a murder constitutes an accident.

Difference between “accidental murder” and “murder simpliciter”

In the year 2000, the Supreme Court in Rita Devi v. New India Assurance Co. Ltd.¹, created a distinction between an “accidental murder” and a “murder simpliciter” as follows:

1. It is an accidental murder if the act of murder was originally not intended but was caused in the furtherance of any other felonious act.

2. It is a murder simpliciter if the dominant intention of the act was to kill a person.

Thus, the motive and intention of the perpetrator were the deciding factors in concluding whether a murder was accidental or not. The distinction between accidental murder and murder simpliciter was not a definite position of law, rather it warranted an examination of the specific facts of each case. Consequently, this approach resulted in varied rulings based on subjective judgment. In certain cases, it was held that the murder of an insured with criminal antecedents,² the murder of the deceased insured for being involved in a faction fight between two groups of his village,³ and the killing of an insured due to political rivalry,⁴ would not constitute accidental murders as they are pre-planned, intentional killings. Conversely, the murder of a kidnapping victim was deemed an accidental death.⁵

Reviewing the aforementioned rulings would reveal numerous contrasting opinions based on individual judgment. In one matter, it was held that even if the murder accused was acquitted by the trial court, the murder would still be classified as a murder simpliciter.⁶ In another matter, the insurance company was directed to await the ruling of the criminal court on the charge of murder before adjudicating the claim.⁷ In a third instance, findings of murder in the charge-sheet were considered insufficient to classify the killing as murder simpliciter.⁸ Thus, different Benches of the National Consumer Disputes Redressal Commission (NCDRC) rendered equivocal rulings leading to multiple interpretations of the same legal issue. This necessitated a more precise criterion to distinguish accidental murder from a non-accidental one.

Test of proximate cause

The ratio in Rita Devi case⁹ overlooked the perspective that regardless of the intentions of the offender, every murder is an accident from the viewpoint of the victim.¹⁰ No person can expect or contemplate his homicide. The distinction between accidental murder and murder simpliciter primarily focused on the perpetrator’s motive while it ought to have considered the victim’s perspective.

This stance was discussed by a three-member Bench of the NCDRC in Maya Devi v. LIC¹¹, wherein the insured was murdered by the shopkeeper’s brother with whom he had had an altercation a day before. Whilst holding such a murder to be an accident, the NCDRC observed that even wilful murder would be an unforeseen event from the standpoint of the victim¹², unless the immediate cause of injury is the deliberate and wilful action of the insured himself.¹³

With a similar observation, the principle established in Rita Devi case¹⁴ was also rejected by the High Court of Andhra Pradesh which remarked that determining the true intention of the perpetrator would be exceedingly challenging and would fall within the purview of criminal jurisdiction. Additionally, it was noted that for contractual matters, a murder must be regarded as an accident.¹⁵

The aforementioned rulings introduced the test of proximate cause as a new criterion to determine which murder would constitute an accident. In the author’s opinion, this test provided a better standard of assessment as it aligns with the definition of an accident. An accident postulates a mishap or an untoward happening,¹⁶ devoid of any design on part of the victim.¹⁷ Therefore, for an incident to qualify as an accident, it has to satisfy three ingredients i.e. it has to be sudden, unforeseen and involuntary. According to Maya Devi case¹⁸, a murder will not be an accident if the immediate cause of the same is an act on part of the victim himself, as in that eventuality, the murder would neither be involuntary nor unforeseen.

Incorporation of exclusion clause in insurance policies

An exclusion clause in a contract of insurance limits or exempts the liability of the insurer. Particularly in policies covering accidental death benefits, common exclusions consist of death resulting from suicide or self-harm, military service, involvement in war or rebellion, intoxication from alcohol or drugs, participation in attempted felonies, and operating an aircraft, among others.

These activities/situations are excluded from coverage because the occurrence of a death in the undertaking of the same would ordinarily be expected and hence, would not constitute an accidental death.¹⁹ The element of foreseeability of death in such situations excludes such death from the purview of an accident.

When the issue of murder as an accident was considered by the NCDRC from the angle of exclusion clauses, it was observed that if an exclusion clause does not exempt liability in case of homicide, the contra proferentem rule of interpretation would apply and insurance companies will be not be allowed to evade liability.²⁰

This view was recently reiterated by the NCDRC to hold that when an insurance policy does not exclude murder but explicitly excludes self-inflicted injuries, and by no stretch of imagination can murder be self-inflicted, a homicide shall constitute an accident under the policy.²¹

Thus, the position of law on the issue has been settled as unless the terms of an insurance policy specifically exclude homicide from the scope of coverage, beneficiaries of such policies are entitled to payout unless it can be demonstrated that the murder was directly caused by the actions of the deceased victim himself.

Conclusion

Under the realm of consumer protection law, the consumer fora are not only equipped with the judicial power to adjudicate and decide consumer disputes but also wield the power to issue directives to the service providers to effect policy alterations or cease unfair trade practices.²²

While this prerogative is much underutilised, in the present context, the NCDRC has censured insurance companies for continuing the arbitrary adjudication of accidental death claims of such nature whilst failing to amend the wordings of the policy concerned despite being involved in numerous litigations on the same issue.²³ Such cognizance by the NCDRC has significantly contributed towards securing the rights of consumers and fostering their confidence in the consumer protection system.