| ORDER | DISTRICT CONSUMER DISPUTES REDRESSAL FORUM, BATHINDA (PUNJAB)
CC No. 165 of 10-04-2012 Decided on : 12-07-2012
Usha Zutshi aged 50 years W/o Mohan Zutshi R/o # 151 Phase 2 Model Town, Bathinda. .... Complainant Versus
Aviva Life Insurance Company Private Limited, through its Manager Near Dr. K K Bajaj, The Mall, Bathinda. ..... Opposite party
Complaint under Section 12 of the Consumer Protection Act, 1986.
QUORUM Smt. Vikramjit Kaur Soni, President Sh. Amarjeet Paul, Member Smt. Sukhwinder Kaur, Member
For the Complainant : Sh. Ashu Bansal, counsel for the complainant For the Opposite party : Sh. Sanjay Goyal, counsel for the opposite party.
O R D E R
VIKRAMJIT KAUR SONI, PRESIDENT
The instant complaint has been filed by the complainant under Section 12 of the Consumer Protection Act, 1986 as amended upto date (here-in-after referred to as 'Act'). Briefly stated the case of the complainant is that the opposite party approached her for selling life insurance plan and stated that she would be insured for Rs. 2,10,000/- if she pays Rs. 20,000/- each for five years and in case she wanted to get the refund of the amount, then she would be given Rs. 1,00,000/- alongwith interest @12% p.a. and bonus and no charges shall be deducted. Accordingly, the complainant purchased Insurance policy vide No. NLG1241223 in the year 2006 and paid five annual premiums of Rs. 20,000/- each. Since she was assured that she was not required to make any further payment, she did not pay the same. The complainant alleged that the opposite party neither supplied any cover note nor any terms and conditions to her. In March, 2012, the complainant requested the opposite party to refund Rs.1,00,000/- alongwith interest @ 12% p.a. and bonus, but the opposite party stated that only Rs. 70,250/- being the fund value would be given to the complainant. Hence, the complainant has filed the present complaint seeking directions to the opposite party to refund Rs. 1,00,000/- alongwith interest @12% and bonus besides compensation and cost. The opposite party filed his written version and pleaded that on the declaration and information provided in the Proposal Form, the policy bearing No. NLG1241223 was issued to the complainant having date of commencement as 31-03-2006. The said policy documents were dispatched to the mailing address of the complainant through Overnite Courier AWB No. 506673330 and the same was delivered on 18-04-2006. The opposite party has pleaded that it was clearly mentioned in policy schedule that policy is a Life Long Unit Linked Policy and date of last premium payment. The said policy also contained a notice on Free-Look whereby the Policyholder has a right to reconsider his decision to purchase the policy within 15 days of receipt of the policy document in case she does not agree to the terms and conditions of the said policy. The complainant had paid five premiums in the said policy regularly for the year 2006 to 2010. The said policy was due for premium on 31-03-2011, but the complainant failed to deposit the same in time. Therefore, as per the terms and conditions of the policy, the policy lapsed on 31-04-2011 due to non payment. The opposite party has further pleaded that a policy gets lapsed when premium payment is not received within certain timeframe and grace period also expires (as per product feature). In such a state risk cover alongwith rider benefits ceases and sum insured is maintainable at the current level and all charges continue to be deducted; however policy admin charges reduces to 60%. The policyholder may reinstate the policy within 2 years of the due date of the first unpaid installment of Regular premium (as per product's terms and conditions). The complainant had firstly reinstated the policy on 08-05-2008 due to non payment of regular premium in due time, further again reinstated the policy on 25-06-2010. The complainant had also changed the address and nominee in the said policy, so it cannot be said that the complainant was never appraised with the policy terms and conditions. The opposite party has further pleaded that regular premium of the said policy was due on 31-03-2011 and complainant was also informed through various premium reminder notice but the complainant failed to deposit the regular premium, hence the status of the said policy was changed as paid up on 31-04-2011. Further the pleading of the opposite party is that the complainant is not entitled to the refund of the premiums amounting to Rs. 1,00,000/- under the said policy as the refund of the premiums under the said policy can only be made if the issued policy is cancelled. However, the complainant has already paid the premiums for five terms and the policy cannot be cancelled at this late stage where she has already availed the benefits for five years. Parties have led their evidence in support of their respective pleadings. Arguments heard. Record alongwith written submissions submitted by the parties perused. The allegation of the complainant is that at the time of purchase of insurance policy No. NLG1241223, the opposite party assured her that she has to make payment of Rs. 20,000/- each for five years only and she will be insured for Rs. 2,10,000 and she is not required to make any further payment. The opposite party further assured her that in case she wants to get refund of the amount, she will be given Rs. 1,00,000/- alongwith interest @12% and bonus and no charges shall be deducted. The submission of the complainant is that now when she applied for refund of the premium of the policy in question, the opposite party stated that only Rs. 70,250/- being the fund value would be paid to her. No policy alongwith terms and conditions were supplied to the complainant. On the other hand, the pleading of the opposite party is that the complainant is not entitled to the refund of the premiums amounting to Rs. 1,00,000/- under the said policy as the refund of the premiums under the said policy can only be made if the policy is cancelled. In the present case, the complainant has already paid the premiums for five terms and the policy cannot be cancelled at this late stage. The submission of the opposite party is that policy documents were dispatched to the complainant through Overnite Courier AWB No. 506673330 and the same was delivered on 18-04-2006. The policy is a Life Long Unit Linked Policy. The policy contained a notice on Free-look whereby the policyholder has a right to reconsider his decision to purchase the policy within 15 days of receipt of the policy document in case she does not agree to the terms and conditions of the said policy, but the complainant has not opted the same. The complainant had purchased the Policy in question on 31-03-2006. She paid five annual premiums of Rs. 20,000/- each thereafter she did not pay any installment of premium. As per version of the complainant she has not received the policy in question alongwith terms and conditions whereas the pleading of the opposite party is that the policy document alongwith terms and conditions was sent to the complainant through Overnite courier vide Doct. No. AWB No. 506673330 but the opposite party has not placed any document on file to prove his this version. In the absence of any evidence, this version of the opposite party cannot be believed. When no terms and conditions were supplied to the complainant the plea of the opposite party that complainant has not applied within the free look period is without any basis. The opposite party has also failed to prove by placing evidence on file that any reminder regarding due premium was given to the complainant. The opposite party has not placed on file copy of the policy in question. The opposite party has admitted that the complainant has paid five annual installments of Rs. 20,000/- each being premium against the policy in question. A perusal of proposal form Ex. R-2 reveals that the plan is a 'Life Long' i.e. Life Long Unit Linked Policy'. The Insurance is a contract which is binding on all the parties between whom this contract has been signed. But, in the present case no policy alongwith terms and conditions were supplied to the complainant. She was informed at the time of issuance of policy that she has to pay only five premiums and thereafter the amount deposited would be refunded to her with interest and bonus. Under such impression, she purchased the policy in question. When no terms and conditions were supplied to the complainant, the complainant is not bound by such terms and conditions. The opposite party cannot garb the hard earned money of the consumer on such pleas. The complainant is not bound by the terms and conditions which were never supplied to her. In these circumstances, the complainant is entitled as per Insurance Regulatory and Development Authority (Standardization of terms and conditions of ULIP products and treatment of lapsed policies) Regulation, 2010, which is reproduced hereunder :-
“10....... The proceeds of the lapsed policies shall invariably be refunded to the policyholder after the expiry of the revival period or at any time after completion of 3 years term as and when demanded by the policyholder. In case there is no demand from the policyholder for refund, insurance company shall refund the amount on its own by means of a cheque/demand draft to be delivered to the insured/nominee at his last known address. However, Insurer may deduct charges on account of pre-closure and lapsation which should, in any case, not exceed the charges stated in regulation 8 above.
Regulation No. 8 i.e. Surrender Charges of Insurance Regulatory and Development Authority (Standardization of terms and conditions of ULIP Products and treatment of lapsed policies) Regulations, 2010, is reproduced hereunder :- “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 ------------- ----------------------- ----------------------- Ist year 12.50% 15% 2nd year 10.00% 12.50% 3rd year 7.50% 10% 4th year 5.00% 7.50% 5th year 2.50% 5% 6th year Nil 2.50%
7th year & onward Nil Nil In view of what has been discussed above, this complaint is accepted with Rs. 5000/- as cost and compensation. The opposite party is directed to refund the fund value to the complainant, after deducting 2.50% amount from the deposited premium of Rs. 1,00,000/- as the policy period is more than 10 years and the complainant has already paid five premiums. Hence, the policy has completed five years.
The compliance of this order be made within 45 days from the date of receipt of copy of this order failing which the aforesaid fund value amount would yield interest @ 9% P.A. from the date of institution of this complaint i.e. 10-04-2012 till realization. A copy of this order be sent to the parties concerned free of cost and file be consigned for record. Pronounced in open Forum
12-07-2012 (Vikramjit Kaur Soni) President
(Amarjeet Paul) (Sukhwinder Kaur) Member Member | |
