Chandigarh

DF-II

CC/867/2016

Gurvinder Singh Virk - Complainant(s)

Versus

Aviva Life Insurance Company Limited - Opp.Party(s)

Devinder Kumar Adv.

30 Nov 2017

ORDER

DISTRICT CONSUMER DISPUTES REDRESSAL FORUM-II

U.T. CHANDIGARH

 

Consumer Complaint No.	:	867/2016
Date of Institution	:	07.10.2016
Date of Decision	:	30.11.2017

 

                                       

                                               

Gurwinder Singh Virk son of Sh.Gurcharan Singh r/o Village Karimpura, PO Nogawan, Tehsil Bassi Pathana, District Fatehgarh Sahib, Punjab.

                                ...  Complainant.

Versus

1.     Aviva Life Insurance Co. Ltd., SCO No.180-182, Sector 9-C, Chandigarh through its Branch Manager.

 

2.     Aviva Life Insurance Co. Ltd., Aviva Tower, Sector Road, Opposite Golf Curse, DLF Phase-V, Sector 43, Gurgaon 122003 through its Managing Director.

…. Opposite Parties.

 

BEFORE:    SHRI RAJAN DEWAN, PRESIDENT

SMT.PRITI MALHOTRA, MEMBER

SHRI RAVINDER SINGH, MEMBER

 

 

Argued by: Sh.Devinder Kumar, Adv. for the complainant

Ms.Neeru Sharma, Adv. Proxy for Sh.Sandeep Suri,  Advocate for the OPs.

 

 

PER RAJAN DEWAN, PRESIDENT

1.         In brief, the case of the complainant is that being allured by the representations/assurances made by the agent of the OPs, he purchased the policy No.SAG2674387 (Kal Pal Control) from the OPs. According to the complainant, he was assured by the agent of the OPs that if he deposited seven annual premiums of Rs.25,000/- then after seven years, he was entitled to the invested amount alongwith interest @ 10% p.a. and his life was to be insured during the policy period.  Accordingly, he regularly paid 7 annual premiums of Rs.25,000/- from 2009 to 2015, amounting to Rs.1,75,000/- with the OPs. After completion of 7 years, he requested the OPs to refund Rs.1,75,000/- with benefits but they refunded Rs.1,63,000/-  with other benefits. According to the complainant, the OPs have committed deficiency in service by not refunding the remaining amount of Rs.12,000/- despite serving of the legal notice. Alleging that the aforesaid acts amount to deficiency in service and unfair trade practice on the part of the Opposite Parties, the complainant has filed the instant complaint.
2.         In its written statement, the OPs have pleaded that the Forum has no power to go into the calculation of the accounts. It has further been pleaded that that the complainant is not entitled to 10% interest as has been stated.  It has further been pleaded that the policy being a unit linked policy, the amount shall vary from time to time on surrender and as such he is not entitled for the full amount or interest thereon. It has further been pleaded that the complainant chosen to surrender the policy after being totally aware of the amount due and after receiving the amount, the present complaint has been filed by him. The remaining allegations have been denied, being false. Pleading that there is no deficiency in service on its part, a prayer for dismissal of the complaint has been made.
3.         We have heard the Counsel for the parties and gone through the documentary evidence on record.
4.         It is an admitted case of the parties that the complainant had paid 7 annual premium of Rs.25,000/-  towards the policy in question for the period from 2009 to 2015, total amounting to Rs.1,75,000/-.  He requested the OPs to refund the invested amount with other benefits after seven years of the commencement of the policy in question, meaning thereby that he discontinued the policy after paying 7 annual premiums of Rs.25000/- from 2009 to 2015.
5.            Now the question, which needs to be determined is as to what maximum discontinuance charges for the policy annualized premium upto Rs.25000/-  are leviable where the policy is discontinued after 7 years.  Insurance Regulatory and Development Authority (Treatment of Discontinued Linked Insurance Policies) Regulations, 2013, were notified vide notification dated 16.02.2013.  Regulation No.13 of said Regulation, 2013 stipulates as under:-

“13.         Obligations of an insurer upon discontinuance of a policy before lock-in-period.

a.     Where a policy is discontinued, the insurer shall take the following steps to enable the policyholder to exercise the option as stipulated in Regulation 12 herein:

1. Send a notice within a period of fifteen days from the date of expiry of grace period to such a policyholder to exercise the said options within a period of thirty days of receipt of such notice:

       Provided that where the policyholder does not exercise the option within the notice period of thirty days, the treatment of such policy shall be subject to provisions stipulated in Regulation 15 herein.

Explanation.— The fund value/policy account value of the policy shall be part of the segregated fund chosen/total policy account till the policyholder exercises his/her option or till the expiry of thirty days of notice period whichever is earlier. During this period the policy is deemed to be in force with risk cover as per terms and conditions of the policy.

ii)     To impose discontinuance charges only to recoup expenses incurred towards procurement, administration of the policy and incidental thereto;

iii)    To design the discontinuance charges to encourage the policyholder to continue with the contract for the full term;

iv)    To ensure that the discontinuance charges reflect the actual expenses incurred;

v)     To structure the discontinuance charges within the statutory ceilings on commissions and expenses; and

vi)    To ensure that the charges levied on the date of discontinuance (as a percentage of one annualized premium or a percentage of single premium) do not exceed the limits specified below:—

 11]             Undisputedly, the policy in question is a unit linked life insurance policy, which is further proved from policy document produced by the complainant. Admittedly, the complainant purchased the policy in question in the year 2009 by paying the first annual premium of Rs.25000/-. Subsequently he paid annual premiums upto 9/2015 meaning thereby it became discontinued after seven years of its commencement.    Undisputedly, the Insurance Companies including the OP Insurance Company are governed by the Insurance Regulatory and Development Authority (Treatment of Discontinued Linked Insurance Policies) Regulations, 2013 and Regulation No.13 thereof, reproduced above, provides refund  of premium after deduction of maximum discontinuance charges, which in the present case would be Nil as the annualized premium paid was upto Rs.25,000/-. Therefore, the complainant is fully entitled to get the refund of his premium amounts, but by not doing so, the OPs Insurance Company has certainly remained grossly deficient, as a result of which the complainant has to suffer mental agony and physical harassment.

6.         In view of the above, the complaint deserves to be allowed. Therefore, the same is accordingly allowed.  The OPs are directed to refund the remaining amount of Rs.12,000/- i.e. (Rs.1,75,000–Rs.1,63,000/-) to the complainant with lump sum compensation of Rs.5,500/- on account mental agony, physical harassment and litigation expenses.       This order be complied with by the OPs within a period of 30 days from the date of receipt of copy of this order, failing which they shall be liable to refund the above awarded amounts along with interest @7% per annum from the date of the order till its actual payment. 
7.         Certified copy of this order be communicated to the parties, free of charge. After compliance file be consigned to record room.

Sd/-                          sd/-                  sd/-

Announced	[RAVINDER SINGH]	[RAJAN DEWAN]	(PRITI MALHOTRA)
30/11/2017	MEMBER	PRESIDENT	MEMBER