DISTRICT CONSUMER DISPUTES REDRESSAL FORUM,

BATHINDA (PUNJAB)

CC No. 140 of 27-03-2012

Decided on : 23-07-2012

Malempati Pratima aged 32 years W/o Vijay Kumar R/o # 151, Phase-2, Model Town, Bathinda.

.... Complainant

Versus

Aviva Life Insurance Company Private Ltd., Near Dr. K K Bajaj, The Mall, Bathinda through its Manager

..... 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

1. 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 and stated that she has to make payment of Rs. 15,000/- each for three years and she will be insured for Rs. 2,70,000/- . The complainant can claim refund at any time and in that case she will be given Rs. 45,000/- alongwith interest @12% p.a. and bonus. Accordingly, the complainant agreed to purchase insurance policy vide No. WTG1512336 and made payment of Rs. 15,000/- each in the month of March, 2007, April, 2008 and 2009. The complainant alleged that the opposite party neither supplied any cover note nor any terms and conditions to her. In September, 2011, she requested the opposite party to refund Rs. 45,000/- alongwith interest @ 12% p.a. and bonus, but the opposite party stated that only an amount of Rs. 45,650/- being the fund value would be given to her. Hence, she has filed the present complaint seeking directions to the opposite parties to refund Rs. 45,000/- alongwith interest @ 12% P.A. and bonus and pay her compensation and cost.

2. The opposite party filed written statement and pleaded that based on the declaration made and information provided in the proposal form, the policy bearing No. WTG1512336 was issued to the complainant having date of commencement as 31-03-2007. The said policy documents were dispatched through Overnite Express vide AWB No. 535340233 on 3-4-2007 and were delivered on 5-4-2007. 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 documents in case she does not agree to the terms and conditions of the said policy but the complainant had not opted the said option. She paid the renewal premium for 2 years but failed to pay the premium in the year 2010 and also failed to reinstate the said policy within a prescribed time frame. Hence, the status of the said policy was changed to 'Auto-Fore Closure' as per the terms and conditions of the said policy and a cheque of surrender value of Rs. 17991/- through Bluedart Courier vide AWB No. 43877298931 on 10-04-2012 was sent to the complainant. The opposite party has pleaded that since the said policy was auto foreclosed therefore, it has rightly sent a cheque of surrender value and same was calculated as per the terms and conditions of the said policy. Hence, the complainant is not entitled for any relief.

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. These are undisputed facts between the parties that the complainant had purchased Insurance policy bearing No. WTG1512336 and paid three annual premiums of Rs. 15,000/- each in the year 2007, 2008 and 2009.

6. The allegation of the complainant is that at the time of selling the insurance policy in question, the opposite party conveyed her that she has to pay only three premiums and she will be insured for Rs. 2,70,000/-. Thereafter if she wants to discontinue the said policy and interested to get the refund, an amount of premium paid would be refunded to her alongwith interest and bonus. The opposite party has never supplied the policy alongwith terms and conditions to her. Now, the opposite party has changed its version and refused to refund the whole premium alongwith interest and bonus.

7. On the other hand, the version of the opposite party is that the policy in question alongwith terms and conditions has already been sent to the complainant through Overnite Express vide AWB No. 535340233 on 3-4-2007 and were delivered on 5-4-2007 wherein the complainant was provided 15 days 'Free Look' period in case she was not interested to continue the policy, but the complainant did not apply for cancellation of the policy in question under 'Free Look' period and got it renewed twice by paying premium in the year 2008 and 2009. Hence, at this stage she cannot claim refund of the whole premium amount. She paid the renewal premium for 2 years but failed to pay the premium in the year 2010 and also failed to reinstate the said policy within a prescribed time frame. Hence, the status of the said policy was changed to 'Auto-Fore Closure' as per the terms and conditions of the said policy and a cheque of surrender value of Rs. 17991/- through Bluedart Courier vide AWB No. 43877298931 on 10-04-2012 was sent to the complainant.

8. The opposite party has pleaded that policy documents were sent to the complainant through Overnite Express vide AWB No. 535340233 on 3-4-2007 and were delivered on 5-4-2007, but it has produced nothing on file to prove its this version. The opposite party has not placed on file copy of the insurance policy in question. Hence, it remained unproved on file that the opposite party has sent policy alongwith terms and conditions to the complainant. In the absence of receipt of terms and conditions of the policy, she was unaware of the Free Look Period. When she approached opposite parties it was told to her that she can get the policy cancelled under freelook period and freelook period starts after receipt of policy document which was never supplied to her. The standard terms and conditions Ex. R-5 does not reveal that these were actually part of the policy of the complainant.

9. A perusal of proposal form Ex. R-1 reveals that it does not contain detailed information. Under the heading Product name, the plan has been mentioned as 'Life long', Sum insured Rs. 2,70,000/- and annual premium Rs. 15,000/-, Type of Fund : Unit Linked Fund, Premium Frequency – yearly, Premium as per Frequency Rs. 15,000/-. Since no policy alongwith terms and conditions were supplied to the complainant, a common man like complainant does not understand/know the insurance terms. The period of insurance is not mentioned on the proposal form. Hence, such type of practice i.e. not making aware of the consumers about terms and conditions of the insurance policies in advance, of the insurance companies keeps the consumers in dark.

10. As discussed above, 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%

2^nd year 10.00% 12.50%

3^rd year 7.50% 10%

4^th year 5.00% 7.50%

5^th year 2.50% 5%

6^th year Nil 2.50%

7^th year & onward Nil Nil

 

11. In view of what has been discussed above, this complaint is accepted with Rs. 5,000/- as cost and compensation. The opposite party is directed to refund the fund value to the complainant, after deducting 7.5% plus any other amount, if any already paid to the complainant under this policy, from the deposited premium of Rs. 45,000/-, as the policy period is more than 10 years and the complainant has already paid three premiums. Hence, the policy has completed three years and fourth year started.

12. 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. 27-03-2012 till realization.

A copy of this order be sent to the parties concerned free of cost and file be consigned for record.

Pronounced

23-07-2012

(Vikramjit Kaur Soni)

President

(Amarjeet Paul)

Member

(Sukhwinder Kaur )

Member