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45. Policy not be called in ques on on ground of misstatement a er three years. --(1) No policy of life insurance shall be called in ques"on on any ground whatsoever a@er the expiry of three years from the date of the policy, i.e., from the date of issuance of the policy or the date of commencement of risk or the date of revival of the policy or the date of the rider to the policy, whichever is later.
(2) A policy of life insurance may be called in ques"on at any "me within three years from the date of issuance of the policy or the date of commencement of risk or the date of revival of the policy or the date of the rider to the policy, whichever is later, on the ground of fraud:
4 of 10 RSA-2359-1996 Explana on II. --Mere silence as to facts likely to affect the assessment of the risk by the insurer is not fraud, unless the circumstances of the case are such that regard being had to them, it is the duty of the insured or his agent keeping silence, to speak, or unless his silence is, in itself, equivalent to speak.
(3) Notwithstanding anything contained in sub-sec"on (2), no insurer shall repudiate a life insurance policy on the ground of fraud if the insured can prove that the misstatement of or suppression of a material fact was true to the best of his knowledge and belief or that there was no deliberate inten"on to suppress the fact or that such misstatement of or suppression of a material fact are within the knowledge of the insurer: Provided that in case of fraud, the onus of disproving lies upon the beneficiaries, in case the policyholder is not alive.
Provided that the insurer shall have to communicate in wri"ng to the insured or the legal representa"ves or nominees or assignees of the insured the grounds and materials on which such decision to repudiate the policy of life insurance is based: Provided further that in case of repudia"on of the policy on the ground of misstatement or suppression of a material fact, and not on the ground of fraud, the premiums collected on the policy "ll the date of repudia"on shall be paid to the insured or the legal representa"ves or nominees or assignees of the insured within a period of ninety days from the date of such repudia"on.
15. Where the ground is misstatement or suppression of a material fact, and not fraud, the insurer may s"ll repudiate the claim within the same three-year period, but must do so in wri"ng and must refund all premiums received within ninety days of repudia"on. A misstatement is material, only if it has a direct bearing on the risk undertaken, and the onus lies on the insurer to establish that it would not have issued the policy, had the true facts been known.
16. The legisla"ve purpose is thus twofold : (i) to ensure prompt and bona fide inves"ga"on of alleged misstatements within a limited period, and (ii) to confer finality and certainty upon policies that have stood the test of "me. The amended sec"on reflects Parliament's inten"on to strengthen consumer protec"on and to prevent belated repudia"ons of matured or long-standing policies.