DISTRICT CONSUMER DISPUTES REDRESSAL FOR`UM, BATHINDA.
CC.No.349 of 24-07-2012
Decided on 20-11-2012
Paramjit Kaur w/o Harvinder Singh r/o # 116, Phase-2, Model Town, Bathinda.
........Complainant
Versus
Aviva Life Insurance Company Pvt.Ltd., through its Manager First Floor, Near Axis Bank, 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.
Present:-
For the Complainant: Sh.Pawan Rajora, counsel for the complainant.
For Opposite party: Sh.Sanjay Goyal, counsel for the opposite party.
ORDER
VIKRAMJIT KAUR SONI, PRESIDENT:-
1. The complainant has filed the present complaint under section 12 of the Consumer Protection Act, 1986 as amended upto date (Here-in-after referred to as an 'Act'). The brief facts of the complaint are that the opposite party approached the complainant for selling the life insurance plan and stated that she has to make the payment of Rs.10,000/- only once and she will be insured for Rs.1,05,000/- and in case she wants to get the refund of the amount then she will be given Rs.10,000/- alongwith interest @ 12% p.a. and no charges shall be deducted and she can claim the refund of the amount anytime. On the allurement of the opposite party the complainant purchased the insurance policy bearing No.NLG1290196 and paid Rs.10,000/- in the month of September 2006. The opposite party neither issued any cover note nor separate terms and conditions nor free look period to the complainant. In the year 2007 the complainant wanted to seek the refund of Rs.10,000/- but the opposite party refused to refund any amount and told that she has to make the payment for the period of minimum three years, only then she becomes entitled to get the refund. Under the compelled circumstances she has paid further premium of 2 years i.e Rs.10,000/- in 2007 and Rs.10,000/- in 2008 and as such she paid in total Rs.30,000/- to the opposite party. Few days back the complainant requested the opposite party to refund Rs.30,000/- alongwith interest @ 12% p.a. but they conveyed that only Rs.12,127/- the fund value will be paid to her. Hence the complainant has filed the present complaint to seek the refund of Rs.30,000/- alongwith interest, cost and compensation.
2. The opposite party on its appearance before this Forum has filed written statement and pleaded that in the present case the cause of action arose in August 2006 whereas the complainant has filed the present complaint in July 2012, that is after the lapse of period of two years hence complaint is barred by limitation under section 24A of the 'Act'. On merits the opposite party pleaded that on the basis of declaration and information provided in the Proposal Form which was duly filled and signed by the complainant himself, a policy bearing No.NLG1290196 was issued to her having date of commencement as 8.8.2006, these policy documents dispatched to her mailing address on 16.12.2006 via Overnite Courier with POD No.#511606172 and the same were delivered to her. The policy documents contained a policy schedule where clearly mentioned the regular premium amount, date of commencement, plan name, premium frequency, allocation rate and the date of last premium payment. Further the policy documents also contained a notice on Free-Look whereby the policyholder has a right to reconsider his decision to purchase the said policy within 15 days of the receipt of the Policy Document in case he does not agree with the terms and conditions of the said policy. The complainant has not availed that option. The said policy was due for the premium for the term of December 2007. Since the complainant has failed to pay the premiums on time under the said policy, the status of the said policy was changed to lapse mode firstly on 7.9.2007 and thereafter on 7.9.2008, as per the terms and conditions of the said policy. The opposite party further pleaded that earlier the lapse occurred when the complainant discontinued the premium payment within 36 months from the date of commencement and ever grace period expired. However, the complainant had requested for reinstatement of the policy on 28.9.2007 and 24.10.2008 and paid the outstanding premiums. As such the policy was reinstated firstly on 1.10.2007 and secondly on 5.11.2008. The complainant has again failed to pay the renewal premium of the said policy for the year 2009, it again lapsed as per the terms and conditions of the policy and went into paid up status as such the fund value of the said policy is Rs.12,337/-. After duly understanding all the terms and conditions of the 'Life Long-Unit Linked' Plan vide the Key Feature Document, Ms.Paramjit Kaur, the complainant signed the Proposal form bearing No.NU10228777 dated 26.6.2006 and giving all the relevant details and information in the prescribed form, for a premium of Rs.10,000/- to be paid annually.
3. The parties have led their evidence in support of their respective pleadings.
4. Arguments heard. The record alongwith written submissions submitted by the parties perused.
5. The admitted facts of the parties are that the complainant has purchased policy named Aviva Life Long Unit Linked Plan and signed the proposal form bearing No.NU10228777 dated 26.6.2006 and paid the premium of Rs.10,000/- and the insurance policy bearing No.NLG1290196 was issued to her with the commencement date of 8.8.2006.
6. The disputed facts of the parties are that the complainant was assured that the payment of Rs.10,000/- is to be made only once and she will be insured for Rs.1,05,000/- and in case she wants to get the refund of the amount deposited by her then she will be given Rs.10,000/- alongwith interest @ 12% p.a. and no charges shall be deducted and she can claim the refund of the amount at anytime. The opposite parties neither issued any cover note nor separate terms and conditions nor the option of free look period to her. In the year 2007 the complainant approached the opposite party for seeking the refund of Rs.10,000/- but they refused to refund any amount and told her to deposit the premium for minimum three years or she will not be entitled to get the refund. The complainant had deposited the premium of two more years for the years 2007 and 2008. In this way she has deposited the total amount of Rs.30,000/- with the opposite party. The complainant requested the opposite party to refund Rs.30,000/- alongwith interest @ 12% p.a. but she was given only Rs.12,127/-.
7. On the other hand the opposite party submitted that the said policy alongwith policy documents were dispatched to the complainant on her mailing address on 16.12.2006 via Overnite Courier with POD No.#511606172 and the same were delivered to her. The policy documents contained the policy schedule where it was clearly mentioned that the regular premium amount, date of commencement, plan name, premium frequency, allocation rate and the date of last premium payment. The policy documents also contained a notice on Free-Look whereas the policyholder has a right to reconsider his decision to purchase the said policy within 15 days of the receipt of the Policy Document, in case she does not agree with the terms and conditions of the said policy. The complainant has given the customer declaration in the said policy and clearly mentioned:-
“This is to confirm that I have read the product literature, product brochure, key features, FAQ's and sample Illustration of the maturity value and understand:-
The product is an Insurance Policy under written by Aviva Life Insurance and is not a fixed/recurring deposit or any other account with Centurion Bank of Punjab or any Form of mutual Fund; The returns and maturity value indicated in the illustration are only indicative and are not guaranteed. It does not in any way forecast the actual that the policy will earn on the investments in future nor do the rates of return indicate minimum or maximum limits that will accrue to my policy; Capital guarantee is applicable only at maturity if Secure fund option has been opted for as explained in the product literature. This is available only in select products;
Partial withdrawals and surrenders are available under specific terms and conditions and are subject to charges;
Regular premiums are required to be paid as per the frequency and policy term, have opted for the proposal form. The policy will lapse in case the premiums are not paid within the stipulated time;
Aviva will not extend any loans against this policy; The acceptance of my proposal by Aviva is subject to the Declaration of Good Health or other underwriting guidelines forming part of the proposal form;
I hold a valid proof of Date of Birth matching with the age declared in the proposal form.”
The opposite party on 1.10.2007 had received a letter from the complainant about the correction of name i.e. from Parampreet Kaur and date of birth in the said policy. The said request was proceeded accordingly vide letter dated 3.10.2007. The said policy was due for the premium of December 2007. Since the complainant has failed to pay the premiums on time under the said policy, the status of the said policy was changed to lapse mode firstly on 7.9.2007 and thereafter on 7.9.2008. Earlier the lapse occurred when the complainant discontinued the premium payment within 36 months from the date of commencement and grace period was also over in the said policy. The complainant had requested for reinstatement on 28.9.2007 and then on 24.10.2008 and paid the outstanding premiums. As such the policy was reinstated firstly on 1.10.2007 and then on 5.11.2008. The complainant again failed to pay the renewal premium of the said policy in the year 2009, hence the said policy lapsed as per the terms and
conditions of the policy and went into paid up status. At present the fund value is Rs.12,337/- and accordingly it has been paid to the complainant.
8. On receiving the request of the complainant, the amount of Rs.12,127/- was refunded to the complainant out of the full deposited amount of Rs.30,000/-. Nothing has been placed on file to show that how the fund value of the complainant to the tune of Rs.12,337/- has been calculated by the opposite party. Furthermore no explanation is given by the opposite party in its reply that how they have calculated Rs.12,337/- as fund value what was the market price at that time or rate of the single unit etc. Nothing has been placed on file to prove that the terms and conditions were ever supplied to the complainant regarding the procedure of the fund value. No detailed calculation or account statement is placed on file.
9. As discussed above, when no terms and conditions were either supplied or communicated to the complainant, she is not bound by such terms and conditions. The opposite party cannot garb the hard earned money of the consumer on false pleas/pretexts. In these circumstances, the complainant is entitled to get the refund as per the Insurance Regulatory and Development Authority (IRDA) which are applicable on all the insurance policies. The deductions of the Surrender Charges as per IRDA (Insurance Regulatory and Development Authority) (Standardization of terms and conditions of ULIP products and treatment of lapsed policies) Regulations, 2010 can be done as under:-
“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 terms 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
---------- ----------------------- ---------------------
1st 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 250%
7 year & onward Nil Nil.”
14. Thus in view of what has been discussed above and a perusal of proposal form shows that this is the Life Long Plan, but term in years or premium paying term in years is not specified. The complainant had paid 3 premiums to the tune of Rs.30,000/-, the policy is in the 4th year and she has already received an amount of Rs.12,127/- whereas she is entitled to get the refund of Rs.30,000/- after the deduction of 7.5% (as it is a life long plan). Thus the complainant is entitled to get the amount of Rs.30,000/-Rs.1250-Rs.12,127/-=Rs.16,623/-.
15. Therefore in view of what has been discussed above, this complaint is accepted against the opposite party with Rs.3000/- as cost and compensation and the opposite party is directed to pay the amount of Rs.16,623/-. The compliance of this order be done within 45 days from the date of receipt of the copy of this order.
In case of non-compliance the interest @ 9% per annum will yield on the amount of Rs.16,623/-.
16. A copy of this order be sent to the parties concerned free of cost and file be consigned to the record room.
Pronounced in open Forum:-
20-11-2012
Vikramjit Kaur Soni
President
Amarjeet Paul
Member
