DISTRICT CONSUMER DISPUTES REDRESSAL FORUM, BATHINDA CC.No.537 of 25-11-2010 Decided on 15-04-2011
Davinder Kaur Mann, aged about 55 years, w/o Sh.Baljeet Singh, r/o 637, Phase-1, Model Town, Bathinda .......Complainant
Versus Aviva Life Insurance Co. India Ltd., Head Office, Aviva Tower Sector Road, Opposite Golf Course DLF, Phase-5, Sector 43, Gurgaon-122003, through its Company Secretary/Managing Director. Aviva Life Insurance Co. India Ltd., having its branch officer Mr. Kulbhushan, The Mall Road, Bathinda
......Opposite parties
Complaint under Section 12 of the Consumer Protection Act, 1986.
QUORUM
Smt. Vikramjit Kaur Soni, President. Sh.Amarjeet Paul, Member. Present:- For the Complainant: Sh.Jai Gopal Goyal, counsel for the complainant. For Opposite parties: Sh.Sanjay Goyal, counsel for opposite parties. ORDER
VIKRAMJIT KAUR SONI, PRESIDENT:-
1. The present complaint has been filed by the complainant under Section 12 of the Consumer Protection Act, 1986 as amended up-to-date (Here-in-after referred to as 'Act'). The brief facts of the complaint are that the complainant alongwith her husband purchased three policies Nos.LLG12322581, WLG1603539 and WLG1598941 on the inducement of Indusind Bank, Bathinda. Since, the complainant and her husband were having their accounts with the abovesaid Bank with whom, the opposite parties were having tie up for selling their policies. The complainant and her husband made representation to the Ombudsman, SCO No.101-103, Batra Building, Sector 17-D, Chandigarh, regarding policy Nos.WLG1603539 and WLG15 98941 being Life Long Policy of 30 years and accordingly requested the opposite party by changing the policy from 30 years life insurance policy to 5 years as per the representation of the complainant and her husband. Thereafter, she again vide letters dated 11.05.2010, 29.05.2010 and 24.06.2010, represented to the opposite parties to change the policy from 30 years to 5 years. The opposite parties vide their letter dated 21.05.2010 in response to letter dated 11.05.2010 instructed the complainant to wait for taking up the matter with their higher officials. The complainant again sent a reminder dated 29.05.2010 and 24.06.2010 to the opposite parties who vide letter dated 25.07.2010,requested the complainant to wait for their decision. The complainant again put up the matter with Ombundsman, Insurance at Chandigarh vide letter dated 19.08.2010. Thereafter, again sent a reminder dated 24.09.2010 to Ombudsman at Chandigarh but to no effect. The complainant has alleged that although, all the three policies were miscounted and mis-sold to the complainant and her husband fully knowing that both are retire couple and unable to pay the premium for 30 years. Hence, the complainant has filed the present complaint for seeking directions to the opposite parties to reduce the period of policy from 30 years to 5 years or to refund the amount of Rs.90,000/- which has been deposited by him in Policy No.LLG12322581 alongwith interest @ 18% p.a. on all the paid up premium and to pay Rs.50,000/- as compensation alongwith Rs.11,000/- as cost of litigation expenses. 2. The opposite parties have filed their joint written statement and pleaded that the complainant who is a matured and educated person, have made the investment, knowing fully well the specification and details of the policy and a declaration in this regard was also made by the complainant. The opposite parties had issued the policy on the basis of the Proposal Form submitted by the complainant. The complainant was also issued the Policy Schedule and Key Feature Documents which clearly explained the charges applicable on the Policy and “Right to Reconsider” notice which states that:- “you have the right to review the policy terms and conditions and cancel your policy within a period of 15 days from the date of receipt of the policy document. If you cancel your policy, the premium, you have paid, will be refunded after adjusting for adverse movement in unit prices less charges incurred on account of stamp duty and medical expenses, if any.” which is in consonance with the IRDA Regulations, 2002. The complainant had option to review and seek refund of the premium, if, she disagreed with the terms and conditions of the Policy, within 15 days of the receipt of the policy documents. The opposite parties have further pleaded that the Standard Terms and Conditions and Key Feature Documents of the Life Long Unit Linked Policy were explained to the complainant in detail. They further pleaded that the Unit Linked Products/Policies are Market Linked Policies and are dependent on the market fluctuations and the investment risk is borne by the Policyholder. The opposite parties have further pleaded that Mrs. Davinder Kaur Mann approached the opposite parties for Insurance and filled the Proposal Form No.UP10106461 dated 31.03.2006 which was duly filled and signed by the complainant herself after going through the Key Feature Document, sample illustration of the maturity value and understanding the scope, meaning and contents of the Proposal Form. The complainant at the time of submitting the Proposal Forms also signed a Consumer Declaration wherein at clause (a), she declares and states that “I fully understand the meaning and scope of the proposal forms and the questions in it and I am submitting the complete proposal on my own and I confirm that I have not been induced by anyone to make the proposal” On the basis of the said Proposal Form and declaration, the opposite parties had issued Life Long Unit Linked Policy bearing No.LLG1232581 to the policyholder on 31.03.2006 and the salient feature of the policy is as given below:- (a) Commencement date 31st March, 2006 (b) Sum Assured Rs.3,00,000/- (c) Premium Frequency Annual (d) Regular Premium Amount Rs.30,000/- (RP) (e) Premium paid till date Rs.90,000/- (f) Status of Policy Paid Up The Policy documents were dispatched to the complainant on 26.04.2006 vide Overnite Courier docket No.506680126 which were delivered on 28.04.2006 to the complainant. Thereafter, the complainant paid 2 more premiums under the policy without raising any dispute with regard to the features of the policy. On 20.05.2010, a letter was received from the complainant thereby it was mentioned that the Policy was mis-sold to her. The opposite parties gave an option to the complainant to transfer the funds to another policy of 10 year term. Thereafter, the complainant sent another complaint letter thereby, she declined the offer of the opposite parties. 3. Parties have led their evidence in support of their respective pleadings. 4. Arguments heard. Record alongwith written submissions submitted by the parties perused. 5. The learned counsel for the complainant has submitted that the complainant alongwith her husband purchased three policies i.e. policy No.LLG12322581, WLG1603539 and WLG1598941 on the inducement of Indusind Bank with whom the opposite party was having tie up for selling their policies as the complainant and her husband were having their accounts with Indusind Bank, Branch Bathinda. The complainant and her husband made representation to Ombudsman at Chandigarh regarding policy Nos.WLG1603539 and WLG1598941 being Life Long Policy of 30 years. The complainant and her husband requested the opposite parties to change the policy from 30 years Life Insurance Policy to 5 years. The complainant again vide letter dated 11.05.2010, 29.05.2010 and 24.06.2010 requested the opposite parties to change the policy from 30 years to 5 years as the Indusind Bank, Branch Bathinda has wrongly invested the funds of the complainant with inducement that the complainant can withdraw the amount after 4 years on payment of three annual premium being Unit Linked Plan Policy. The opposite parties vide their reply dated 21.05.2010 in response to letter dated 11.05.2010 instructed the complainant to wait for taking up the matter with their higher official. Then, again the complainant sent a reminder dated 29.05.2010 and a letter dated 24.06.2010 of mis-selling of policy. Then, again the opposite parties vide letter dated 25.07.2010 requested the complainant to wait for their decision. Thereafter, the complainant took up the matter with Ombundsman Insurance at Chandigarh vide letter dated 19.08.2010 and again sent a reminder dated 24.09.2010 to the Ombundsman but to no effect. The complainant and her husband are retired person and they can not pay for the Life Long Premium i.e. for 30 years. 6. The learned counsel for the opposite parties has submitted that the Insurance contract was entered between the parties upon the agreed terms and conditions as detailed in the Standard terms and conditions. The complainant was also issued the Policy Schedule and Key Feature Documents which clearly explained the charges applicable on the Policy and Right to Reconsider notice which states that :- “you have the right to review the policy terms and conditions and cancel your policy within a period of 15 days from the date of receipt of the policy document. If you cancel your policy, the premium, you have paid, will be refunded after adjusting for adverse movement in unit prices less charges incurred on account of stamp duty and medical expenses, if any”. The complainant had option to review and seek refund of the premium, if he disagreed with the terms and conditions of the policy within 15 days of the receipt of the policy documents. The Standard Terms and Conditions and Key Feature Documents of the Life Long Unit Linked Policy was explained to the complainant in detail and it is thereafter that he opted for the said policy. The Unit Linked Product/Policy are Market linked policies and are dependent on the market fluctuations, the investment risk is borne by the Policyholder. Depending upon the performance of the Unit Linked fund chosen by the policyholder to achieve gains and losses on his/her investments. The learned counsel for the opposite parties has further submitted that Mrs. Davinder Kaur Mann-the complainant filled the Proposal Form dated 31.03.2006 which was duly filled and signed by the complainant after going through the Key Feature Document, sample illustration of the maturity value and understanding the scope, meaning and contents of the Proposal Form. The complainant has also signed the Consumer Declaration incorporated in clause (a). On the basis of this Proposal Form and declaration, the opposite parties issued a Life Long Unit Linked Policy bearing No.LLG1232581 to the Policyholder on 31.03.2006. The salient features of the policy is as staed below :- (a) Commencement date 31st March, 2006 (b) Sum Assured Rs.3,00,000/- (c) Premium Frequency Annual (d) Regular Premium Amount Rs.30,000/- (RP) (e) Premium paid till date Rs.90,000/- (f) Status of Policy Paid Up The Policy documents were dispatched to the complainant on 26.04.2006 vide Overnite Courier docket No.506680126 and delivered on 28.04.2006 and the policy documents included policy schedule, “the Right to Reconsider” Notice, the Standard Terms and Conditions, copy of Proposal Form and First Premium Receipt. As per the “Right to Reconsider” notice, the complainant had the option to get the policy cancelled within 15 days of the receipt of Policy documents in case he was not satisfied with any of the terms and conditions of the policy. Thereafter, the complainant duly paid two more premiums under the policy without raising any dispute with regard to the features of the Policy for more than 4 years. On 20.05.2010, a complaint letter was received from the complainant, thereby, alleging that the Policy was mis-sold to her. The opposite parties in order to provide a resolution to the complainant, gave an option to transfer the funds to another policy of 10 year term. The opposite parties had converted the other policies into short term policies as a goodwill gesture. A resolution of converting into a 10 year term policy was also provided for this policy but the same was never accepted by the complainant. 7. The complainant had written a letter dated 11.05.2010 Ex.C-2 to the Managing Director, Aviva Life Insurance Co., in which, he has specifically mentioned that he had paid 3 premiums for the said Policy and now, when she conducted Aviva Office, at Bathinda, she was shocked to know that after depositing Rs.90,000/-, she was not even getting the 1/2 of her principal amount and further submitted that this is an hard earned money and she is an old person, aged about 59 years and surprised why their person had sold her such a long period policy for 30 years which clearly shows the mis-selling on their part and requested the opposite parties to return the principal amount of Rs.90,000/-. The opposite parties have written a letter dated 21.05.2010 Ex.C-4 to the complainant that after taking due cognizance of the request of the complainant and as a rare exception, the Company had decided to consider the change of product from Life Long Plan to another plan with Premium Payment and Policy Term of 10 years in Policy No.LLG12322581 but the complainant has not satisfied with this letter, so she wrote a letter dated 29.05.2010 Ex.C-5 to the opposite parties. The contents of this letter are as under :- “1) As per your letter the decision of company to change the produce from Life Long Plan to another plan with Premium Payment and policy term of 5 years, is not acceptable to me. 2) As already mentioned at point No.4 of my letter dated 11.05.2010. I once again request that I am an old person aged approx. 60 years and is not bound/able to pay further premiums and also as assured/ promised/committed by the FPC of Aviva that I have to pay 3 annual premiums only and after 4 years, I can withdraw my money. 3) So, without discussing anything further and without wasting your and my valuable time, you are requested to refund my principal amount of Rs.90,000/- alongwith interest/appreciation upto date within 7 days as I am in great need of money.” The complainant had again written a letter dated 24.06.2010 Ex.C-8 with the same request. The complainant has also filed a suit before Ombudsman vide Ex.C-10 dated 19.08.2010 in which she has specifically mentioned that her previous 2 policies have already been changed from 30 years to 5 years and the opposite parties have offered to convert the 3rd policy bearing No.LLG12322581 from a period of 30 years to 10 years but her request is that since she and her husband is an old couple and unable to pay further premiums, the opposite parties either refund of premiums amount of Rs.90,000/- alongwith interest or convert the policy from 30 years to 5 years. The opposite parties have submitted that the complainant knowingly purchased the Life Long Term Policy for 30 years even then as a goodwill gesture, they have already apprised the request of the complainant to change the second policy from the term of 30 years to 5 years. If, the complainant was dissatisfied with her Policy No.LLG12322581, she should have availed the Right to Reconsider but she has not done so at the stage. They have offered the complainant to change the policy from 30 years to 10 years but this offer is not acceptable to the complainant and prayed for either for refund of amount or to reduce the terms of the policy from 30 years to 5 years. 8. The complainant had already deposited 3 premiums with the opposite parties. The opposite parties have placed on file Aviva Standard Terms & Conditions Ex.R-3. These terms and conditions are not signed by any of the parties or by the complainant which means that these terms and conditions are never supplied to the complainant. However, 'Article 15 of the aforesaid terms and conditions i.e. 'Full surrender' is reproduced hereunder:- “15.2 The surrender value is equal to the surrender value of Initial Units, which is equal to the value of all initial units less an Early Redemption Charge determined at the time of surrender and the value of all Accumulation Units in respect of Regular Premiums.” “15.4 A surrender penalty deduction in accordance with the company's Surrender Penalty Chart as published from time to time will be applied to the value of Units allocated in respect of Additional Single Premiums where they are surrendered within three years of the date of allocation.” 9. The opposite parties have not produced company's surrender penalty chart as published from time to time. As the policy has elapsed, the complainant is not entitled to any other benefit or interest. Clause 8 of the Insurance Regulatory and Development Authority (Standarization of terms and conditions of ULIP Products and treatment of lapsed policies) Regulation, 2010 reads as under :- “8 Surrender Charges: It is observed that Insurers apply different surrender charges while paying the surrender value to the insured. After due consideration of various practices, the Authority orders that the surrender charges (as percentage of fund value) shall not exceed the limits specified below:- Year Policy Period Less than 10 years More than 10 years 1st year 12.50% 15% 2nd year 10.00% 12.50% 3rd year 7.50% 10% 4th year 5.00% 7.50%.........” 10. The maturity date of the Policy has been mentioned as 30 years which is very long period for retired person to take the policy for such a long period which seems that the opposite parties have never conveyed to the complainant that they have been issuing him a policy of such a long period. Since, the terms and conditions were not signed by the complainant as well as the opposite parties, these terms and conditions were neither supplied nor conveyed to the complainant and as such, the opposite parties are not entitled to make the deduction of any amount . 11. Hence, there is deficiency in service and unfair trade practice on the part of the opposite parties. In view of what has been discussed above, this complaint is accepted with Rs.10,000/- as compensation and Rs.2,000/- cost and the opposite parties are directed to pay the premium amount of Rs.90,000/- with interest @ 9% p.a. from the date of deposit of last premium till its realization. Compliance of this order be done within 45 days from the date of receipt of copy of this order by the opposite parties jointly and severally. 9. A copy of this order be sent to the parties concerned free of cost and file be consigned for record. '
Pronounced in open Forum 15-04-2011 (Vikramjit Kaur Soni) President
(Amarjeet Paul) Member | 
