Flood Claim Denied Payout ~ Because of Licence Breach !!!!!

Insurance is a contract ~ and at times, indemnity may be denied due to various reasons including – absence of fortuity, peril not being an insured peril, property not covered, loss not established and the like.  Without getting into more details, here is an interesting case where a woman was denied insurance payout – and can you imagine the reason ? In India, till 1999 the insurance sector was controlled by Controller of Insurance as per the provisions of Insurance Act 1938 but after formation of the IRDA, the Authority issued various regulations,  to develop the insurance sector in the country.  Among them is the granting of license to companies to start insurance business; approval of insurance product and the like are of paramount importance.  With IRDA direction, no person can carry on Insurance business unless & until he has obtained a certificate from the Authority for a particular class of Insurance business. Now in  India, the fire policy coverage is under Standard Fire and special perils  Policy.  Contrary to common belief, a Fire insurance policy offers indemnity not only against fire but against certain other specified perils as well.  The Standard Fire and Special Perils Policy (Material damage) which came into effect from April 2003, is a named peril policy specifying 12 perils.  The Policy provides for indemnity of destruction or damage to the property insured caused by storm, cyclone, typhoon, tempest, hurricane, tornado, flood or inundation excluding those resulting from earthquake, volcanic eruption or other convulsions of nature. The denial of insurance payout did not occur in India ~ but in UK as reported in MailOnline In Mar 2014.  Roslyn Earle, 66, arranged cover for her five-bedroom Wiltshire house through a broker.  Her home was flooded - warping solid oak floors and destroying furniture ~ the loss appeared genuine and well within the purview of the policy held, yet the claim was denied ! It was not the terms and conditions of the policy or exclusions that denied the payment but because  the policy was underwritten by an Icelandic firm whose license has been withdrawn. Roslyn Earle arranged cover for her five-bedroom Wiltshire house through the century-old Country Gentlemen’s Association. The CGA’s brokers placed her policy with European Risk Insurance, which lists an Essex address but is actually based in Reykjavik.  Mrs Earle, 66, submitted a claim after flood water warped solid oak floors, destroyed antique furniture and forced her to flee with only her two cats and a suitcase. It was only then that she discovered Icelandic regulators had withdrawn European Risk Insurance’s license amid concern the company did not have enough funds to meet its liabilities. Homeless and facing mounting debts, Mrs Earle complained to  the UK Ombudsman, but officials suggested she ‘try the Icelandic Ombudsman instead’. The Icelandic authority promised to call back but never did. Her six children had to rent a holiday cottage as a temporary refuge for her because, although the waters  receded, her house was uninhabitable. It is stated that she she may be eligible for partial help under the financial services compensation scheme.  The despaired policy holder is quoted as saying - ‘The insurance industry has become so complex and I wonder how many more people are in my position without yet knowing it.’ With regards – S. Sampathkumar
4^th Mar 2015.