Can insurance Co. Ask for your bank statement to approve or deny claim

My Question. Is it right for any Insurance Company to ask for your Banking statement in the process of claiming? And what legal base is that derived from?

And then the explanation from one Insurer was that it is to verify of where you was around and that if you have bought any alcohol prior the accident or incident.

What is the legality of that as from my point it wouldn't even stand in the court of law if one has bought alcohol, it does not prove the consumption of such if the insurance is trying not to pay because you have bought "Spirit" or not.

Please do share your knowledge and view, why is such necessary or needed by insurance Co.

Can one deny them the access to such personal information and if so what are the consequences.