No legal bar in making same-sex partners a nominee in insurance policies

Kolkata: There is no legal bar for anyone in making their same-sex partner a nominee in insurance policies in the name of that person, the Life Insurance Corporation of India (LIC) has confirmed in a reply to an RTI application by a Kolkata-based queer couple, Suchandra Das and Sree Mukherjee.

Speaking to IANS, Suchandra informed that the LIC has clearly mentioned in its reply that there is no illegality in nominating any person, including a stranger or a legal entity.

"In effect, this means that there is no bar for a policyholder from making a person not related to him or her by birth, consanguinity, marriage or adoption as his or her nominee," said Suchandra, who is a professional photographer.

Her partner Sree Mukherjee is a digital marketing professional.

Suchandra also informed that they had made a similar RTI application to the Reserve Bank of India (RBI) asking whether any person not related to him or her by birth, consanguinity, marriage or adoption as his or her nominee in the bank account.

"RBI has replied on this count but its answer lacks clarity like that of LIC. However, quoting Section 45ZA to 45ZF of the Banking Regulations Act, 1949, which deals with the issue of nomination, the RBI maintained that there is no mention of any condition nor there are any restrictions regarding who can be a nominee. So, from this reply it is clear that no bank can insist that I can make only someone related to me a nominee," she added.

However, there is a catch in the entire matter, explained a senior counsel of Calcutta High Court.

"Becoming a nominee in an insurance policy or bank account does not necessarily make that nominee a successor of the insurance proceeds or the funds in the bank account concerned," Gupta told IANS.

"A nominee is an authorised person of the policyholder to whom the insurance company will hand over the insurance funds in the absence of the policyholder. However, the nominee can only be the recipient of the money and is duty-bound under the law to hand over the entire money to the successor of the deceased. A nominee, therefore, is merely an agent of the policyholder," he said.

However, the senior counsel, who regularly provides free legal advice through the Varta online platform for legal, medical and other assistance to the LGBTQ community people, assured that there is a legal way to make the nominee also a successor of the funds.

"In, that case, the policyholder or bank account holder will have to bequeath those funds by executing a registered will and thus making the nominee also the successor," Gupta told IANS.