Tamil Nadu

North Chennai

CC/159/2016

Muralidharan Thothathiri - Complainant(s)

Versus

Bajaj Alliance Life Insurance .com Ltd The Mananger - Opp.Party(s)

Krishna Ravindran

10 Feb 2022

ORDER

                                                                     Complaint presented on : 19.07.2016

                                                                Date of disposal            : 10.02.2022

                                                                                  

DISTRICT CONSUMER DISPUTES REDRESSAL COMMISSION,

CHENNAI (NORTH)

@ 2^ND Floor, T.N.P.S.C. Road, V.O.C. Nagar, Park Town, Chennai – 600 003.

 

                PRESENT: THIRU. J. JUSTIN DAVID, M.A., M.L.               : PRESIDENT

                        THIRU. S. BALASUBRAMANIAN, M.A., M.L.          : MEMBER

 

C.C. No.159/2016

 

DATED THIS THURSDAY THE 10^th  DAY OF FEBRUARY 2022                                

Muralidharan Thothathiri,

S/o. Thothathiri,

No.604, Block, Ceebros Boulevard,

3/381, Mettukuppam,

Old Mahabalipuram, Road,

Chennai – 600 097.

 

                                                                                               …..Complainant

 ..Vs..

1.The Grievance Redressal Officer,

Bajaj Allianz Life Insurance Co.Ltd.,

GE Plaza, Airport Road, Yerawada,

Pune  -411  006.

 

2.The Manager,

Bajaj Allianz Life Insurance Company Limited,

Sriji Majestic, 2^nd Floor,

Plot No.6, along E Road,

Opp. To Flower Market,

Koyembedu Wholesale,

Chennai – 600 107.

.....Opposite Parties

Counsel for Complainant                   : Krishna Ravindran and another

 

Counsel for   opposite parties              : M/s.S.Namasivayam and another

ORDER

 

THIRU. J. JUSTIN DAVID, PRESIDENT

          This complaint has been filed by the complainant against the opposite party under section 12 of the Consumer Protection Act, 1986 prays to return the sum of Rs.2,96,714/- and to pay a sum of Rs.1,00,000/- as compensation for mental agony with   cost of the complaint.

1.THE COMPLAINT IN BRIEF:

          The complainant is working as consultant and intend to invest his savings planning to subscribe the policy. The representative of the opposite party’s  approached the complainant and informed about the Super Saver Policy  which has so many features and benefits, such as tax exemptions and high rate of returns. The complainant and his wife are specifically accepted the super Saver Policy scheme which has so many features viz the premium has to be paid only for initial 3 years and withdrawal surrender could be made any time after 36 months and substantial benefit offered was much more than the amount invested. The complainant has paid premiums as offered and assured by the representative for the first 3 years (2010- Rs.97,920/- 2011-Rs.99,361, & 2012-Rs.99,433/- all totaling Rs.2,96,714/-. The complainant decided to surrender the above said policies before the 1^st opposite party. Thereafter, the complainant approached the agent for surrender, however he advised to contract T.Nagar office, Chennai. Hence, the complainant approached  the opposite party office and requested to inform the status of the interest accrued in the above said policy.  To utter shock and surprise of the complainant, the representative of the opposite party informed that the quote of surrender value payable as on date was only Rs.98,136,86/-.  The complainant enquired  about the above said aspect, no proper response was given by the 1^st opposite party office. Hence, the complainant approached the higher officials of the company regarding the basis of the above said surrender value arrived by the company, however no proper response and reply as forthcoming  from the opposite parties office. Hence, the complainant approached the 2^nd opposite party office, after attending the complainant’s issue the representative assured to solve the issue in the weeks time, however no proper reasons and reply the 2^nd opposite party.  The complainant caused demand legal notice on 15.04.2015 and the same was acknowledged by the opposite parties on 18.04.2015. Thereafter also there has been no proper response from the opposite parties office.  As per clause 3 C of the policy document when the policy is surrendered (After the first three policy years) the minimum surrender value should be the higher of quote. However the opposite parties office does not show any details of the GSV or SSV as mentioned in the policy document.  The complainant is eligible for additional rider benefits and vested bonuses. The above benefits are not added in the quote given to the complainant. The complainant submits that he has verified the status of the policy and other details in the IRDA office, but to utter shock and disbelief the policy is indicated as lapsed and no NAV was provided. Hence, the opposite party company doing unfair trade practice thereby deficiency in service to the complainant.  The opposite parties did unfair trade practice and deficiency in service and violate the terms and conditions and guidelines issued by the authorities. Unilateral and illegal actions have caused wrongful loss to the complainant and wrongful gain to the opposite party this is nothing but unfair trade practice and pure deficiency in service. It is further submitted that the financial loss and hardships suffered by the complainant due to the illegal actions and through deficiency in service and unfair trade practice entail to be adequately compensated. Hence this complaint.

 

 

2.WRITTENVERSION FILED BY THE OPPOSITE PARTIES IN BRIEF:

          The opposite party is a leading player amongst the private life insurance policy provides in India, offering all types of life insurance policy such as term insurance health pension retirement plan, child plan policy, child education plan, saving and investment planning plans. Under the IRDA Regulation for Protection of Policy holder’s Inters, as changed from time to time, it has put in place an internal grievance redress mechanism to ensure effective and timely resolution to policy holders concerns. The Insurance Policy will be issued on the basis of a duly signed proposal form submitted by the complainant to the Bajaj Allianz Life Insurance Policy and we will issue him with a policy document with policy Number and date which would clearly reflect the installment premium, the terms and frequency of premium and other salient features and conditions. The policy is an Evidence of a contract of the life assurance between Bajaj Allianz Life Insurance Company Limited and the policy holder. The policy is based on the application and declaration which the complainant made in the proposal form. It is compassionate to the claimants and claims are always honoured so long as they are not in breach of the elementary insurance principle of uberrimae fidei or utmost faith. At the time of surrender the complainant has agreed to the terms and conditions relating to surrender as extracted from the policy document. The Insurance policy is based upon contract whereby the proposal along with the first insurance premium is received from the proposer, who intends to take the Insurance Policy from the Insurance Company. The proposer who intends to procure a insurance policy has to fill in the material details in the proposal form, amongst which the medical, income details, as well nomination details have to be provided. The same is as per the Insurance Act. Therafter both the policy holder and the company are bound by the terms and conditions of the Insurance Policy which is issued by the company, based upon the proposal given by the policy holder. All the allegations and statements made in the complaint are contrary to the terms and conditions of the policy documents and on the principles of “Nullus commodum capere potest ex sua injuria propria” as the complainants cannot derive an advantage from her own wrong. The policy in the name of the complainant is super saver with policy number No.0187406341. The date of commencement was 20^th of October 2010 and date of FUP was 20^th October 2013. The sum assured is Rs.14,89,000/- and premium is Rs.97976. PPT is 20 and benefit term was 20 and the present status is lapse paid up. The complainant had not invoked free look period for cancellation of the policy within 15 days from the date of receipt of policy. Further by paying the premium for 3 years including 2 renewal premium, the complainant had shown her acceptance to the policy terms and it is not open to her to revisit the contract which is based on the standard terms as approved by IRDAI. As per clause 8 of the policy terms and conditions, nonpayment annual regular premium shall be subject to Non Forfeiture Condition per section 9.  As per the policy conditions policy can be surrendered after completion of three policy years provided first three years premiums have been paid in full. The minimum guaranteed surrender value (GSV) will be equal to GSV =30% X (Total premiums paid till date less premium paid in the first year less any extra premiums and additional rider benefit premiums, if any) The company may also declare a  Special Surrender Value (SSV). SSV will be calculated by multiplying SSV factor to the paid-up value, as per section 10, at the time of surrender. The higher of GSV and SSV will be paid as the Surrender Value. The complainant has enjoyed the benefits of the policy since five years along with insurance cover and had raised this issue of surrender value in the year 2015 April itself and the same was suitably replied through e-mail communication dated 25.04.2015. The complaint is frivolous, vexatious and is not maintainable in law.

3. POINTS FOR CONSIDERATION:

1. Whether there is deficiency in service on the part of the opposite parties?
2. Whether the opposite parties are liable to pay Rs.2,96,714/- with interest to the complainant ?

 

3. Whether the complainant is entitled for compensation  and cost?
4. To what other reliefs, the complainant is entitled?

04. POINT NO. 1

          The complainant Muralidharan Thothathiri  accepted the Super Saver Policy scheme from the opposite parties in the year  2010  and paid annual premium for three years. The 1^st opposite party is the Grievance Redressal Office, Bajaj Allianz Life Insurance Co. Ltd., and 2^nd opposite party Bajaj Allianz Life Insurance Co.Ltd., Koyembedu.

          05. There is no dispute between both the parties that the complainant Muralidharan Thothathiri  sent a proposal form for Life Insurance to the head office of the opposite parties for the product namely  Super Saver Policy on 08.10.2010. Head office  of the opposite parties accepted the proposal form and issued a insurance policy on 30.10.2010 to the complainant. The head office  opposite parties in his letter dated  31.10.2010 addressed to the complainant stated as follows. “ Bajaji Alliance Super Saver Regular Premium, name of the policy Holder Muralidharan Thothathiri ,  Policy No.0186930314, Product name Bajaji Alliance Super Saver, Police commencement date 20.10.2010  Annual Premium, with tax Rs.97992+979.20 policy term 20 years maturity date 28.10.2030. The complainant paid the first premium of Rs.97,920/- on 24.09.2010 and the opposite parties issued receipt for the same. The complainant accepted the Bajaj Allianz Life Insurance Policy and paid for the premium for three years. To prove the above fact  the complainant filed Ex.A1 & Ex.A2 and opposite parties filed Ex.B2 and Ex.B3.

          06. The allegations of the complainant is that he paid the premium for three years and decided to surrender the said policy and approached the opposite parties company and informed  that the policy is lapsed and no NAV was provided. Further the complainant alleged that as per clause 3(C) of the policy after completion of three years, provided first three years annual premium have been paid, the policy holder is entitled to surrender the policy and  eligible to receive guaranteed surrender value of special surrender  value whichever is higher,  and as per clause 9 (ii) of the policy document, during auto cover period (ending in 20^th October 2015),  when the policy is surrendered the complainant is  eligible for additional rider  benefits and vested bonuses, but the opposite parties committed unfair trade practice and deficiency in service by indicating the complainant policy as lapsed  policy  and no NVA  was provided.

          07. The opposite parties  contended the insurance policy will be issued on the basis of the duly signed proposal form submitted by the complainant to the Bajaj Allianz Life Insurance Company  and policy document is an evidence of a contract of the life assurance between Bajaj Allianz Life Insurance Company Ltd., and policy  holder, that the complainant has agreed the terms and conditions mentioned in the policy document and policy name is Super Saver, Policy No.0186930314, date of commencement 20.10.2010 date of  FUP was 28.10.2013  annual premium of Rs.97,920/- terms was 20 years. The opposite parties further contended the present status is lapsed paid up and complainant has not invoked free look period for cancellation of the policy within 15 days from the receipt of policy and he paid a premium for three years and since the premium amount is consideration of covering risk of the insured and risk is covered till the lapsed of the policy, the complainant is not entitled for anything more. The opposite parties further contended as per clause of 8 of the policy terms and conditions, nonpayment Annual Regular Premium shall be subjected to following non Forefeiture clause 8 of the policy.

NON –FOREFEITURE CLAUSE OF THE SAID POLICY

          “If premium payment ceases after atleast first three years annual premiums have been paid, then on expiry of the Auto Cover period, the policy will be converted  to paid-up-policy. The paid up value will be equal to the Sum Assured multiplied by a factor equal to the proportion of number of Annual premiums paid to the total number of annual premiums payable under the policy, plus the  guaranteed addition accrued as per section 3(e) and the vested bonuses till the due date of first unpaid annual premium”

          “A paid up policy will not accrue any further bonus or Guaranteed Additions”.

          “Any additional rider benefits, as specified in the schedule, would cease to exist if policy lapses or gets converted to paid up policy”.

The opposite parties further contended the complainant has venture of the benefit of the policy since five years along with insurance cover and had raised the issue of surrender value in the year 2015 and hence there is no unfair trade practice and deficiency in service on the part of the opposite parties.

          08. The complainant has taken Bajaj Allianz Super Saver Policy No.0186930314 from Bajaj Allianz Life Insurance Company Limited on 20.10.2010. As per  insurance policy the annual premium payable is Rs.97,920/- and date commencement of risk is 20.10.2010 on the terms ends on 20.10.2035. The complainant paid annual premium of Rs.97,920/- in the year 2010, Rs.99,361 in the year 2011, and Rs.99,433/- in the year 2012. The complainant paid a total sum of Rs.2,96,714/- towards annual premium for three years from 2010 to 2012. The complainant willing to surrender the policy to the opposite parties in the year 2014 and opposite parties treated the policy as lapsed and arrived the surrender value payable is  Rs.98.136.86/- as per clause of 8^th of the terms and conditions of the policy. The opposite parties deducted the amount as per the terms and condition mentioned in clause 8 of the policy.

          09. On perusal of the policy, this commission finds that clause 3 of the policy  surrender value reads as follows.

(c) SURRENDER VALUE

        (i) “After completion of three policy years, provided first three years, Annual Premiums have been paid, the policy holder is entitled to surrender the policy and receive Guaranteed Surrender Value (GSV) or Special Surrender Value (SSV) whichever is higher.

        (ii) GSV = 30%* (Total Annual Premium paid till date less Annual Premium paid in the first policy year less any extra premium and any Additional Rider Benefits Premium).

        (iii) The Special Surrender Value shall be calculated by multiplying SSV factor, as declared by the company, to the paid-up Value Calculated per Section (9) (ii) as on date of surrender.

(d) ADDITIONAL RIDER BENEFIT

The Additional Rider Benefit in the form of Accidental Permanent Total/Partial Disability Benefit rider and family income benefit rider, if chosen, as specified in the schedule shall be subject to the terms and conditions of the respective riders.

 

(e)   GUARANTEED ADDITIONS

          At the end of each policy year, Guaranteed Addition equal to 4% of the Sum Assured shall be added provided all due Annual Premium have been paid”.

The complainant complied the conditions stipulated in clause (C) of the policy. The complainant paid 3 years annual premium and he surrenderd the policy after completion of three years. Therefore, the policy holder entitled to receive guaranteed surrender value or special surrender value whichever is higher.  Further the complainant is entitled for addition rider benefit and guaranteed addition mentioned in clause 3 (C) d and (e) of the terms and conditions mentioned in the policy.

          10. On the other hand clause 9 of the terms of conditions of the policy reads as follows:

Non forfeiture

          “If the Annual Premium have not been paid for at least three years, then on expiry of the Auto-Cover period, the policy will lapse for all benefits without any Surrender value.

          If premium payment ceases after at least first three years Annual Premiums have been paid, then on expiry of the Auto-Cover period, the policy will be converted to a paid-up policy. The  paid up value will be equal to the Sum Assured multiplied by a factor equal  to the proportion of the number of Annual Premium. paid to the total number of Annual Premiums payable under the policy, plus the Guaranteed Additions accrued per section 3 (e) and the vested Bonuses till the due date of first unpaid Annual Premium.

The terms and conditions in clause 7 stated about auto cover period  as follows: “In case of nonpayment of due annual premium any time after second policy anniversary, the policy shall remain in force for the full some assured for two success year from the due date of first unpaid annual premium”. Here, in this complaint, the complainant surrendered the policy within two years from the due date of first unpaid annual premium and therefore, the complainant  is entitled for the surrender benefit mentioned in clause 3 (C) of the policy condition. But the opposite parties failed to comply the policy conditions and the same amounts to deficiency in service. Therefore, the deficiency in service on the part of opposite parties.

11. POINT NO: 2

          The opposite parties issued a policy in the name of complainant in the year 2010. The policy is of contract the life assurance between the complainant and opposite parties.  The terms and conditions mentioned in the policy are binding upon both parties. The opposite parties treated the insurance policy as a lapsed to policy without following the terms and conditions. Further the representative of the opposite parties approached the complainant and informed that the super saver policy have many features and also have many benefits and in turn,  the complainant took the policy. The complainant paid annual premium for three years thereafter surrender the policy for payment. But the opposite parties treated  the policy  as lapsed one and ready to pay only Rs.98.136.86/-  which is much lesser than the total premium paid by the complainant.  But, the complainant is entitled for surrender value as per clause 3 © of the terms and conditions mentioned in the policy. Under these circumstances the opposite parties are jointly or severally liable to pay the surrender value amount as per clause 3 of the terms and conditions of the policy. This point is answered accordingly.

12. POINT NO:3

          The complainant taken super saver policy from the opposite parties company on the representation of one agent from the opposite parties company. The complainant paid annual premium for three years totaling Rs.2,96,714/- . In the year 2014 the complainant surrender the policy, but the opposite party incline  to pay   the lesser amount in violation of terms and conditions mentioned in clause 3 of the policy. The same caused mental agony and financial loss to the complainant. Therefore, the complainant issued a legal notice on 15.04.2015 to the opposite parties. Ex.A4  is the copy of legal notice issued by the complainant. The opposite parties received the legal notice 18.04.2015 and failed to send any reply. Therefore, the complainant approached this commission for the relief. The opposite parties have not follow the terms and conditions mentioned in the policy and same caused mental agony and financial loss to the complainant. Therefore, the opposite parties are jointly or severally liable to pay a sum of Rs.30,000/- towards compensation and a sum of Rs.10,000/- towards cost to the complainant.

13. POINT NO:4

             In the result, this complaint is allowed in part. The opposite parties 1 & 2 are jointly and severally directed to pay the surrender value amount as per clause 3(C) of the terms and conditions mentioned in the Policy No.0186930314  within two  months from the date of receipt of the order.

Further, the opposite parties 1 & 2 are jointly and severally directed to pay a sum of Rs.30,000/-(Rupees thirty thousand only) towards compensation besides a sum of Rs.10,000/-(Rupees ten thousand only) towards cost of  proceedings to the complainant. The above amount of (30,000 + 10,000) = Rs.40,000/- (Rupees forty thousand only) shall be payable within two months from the date of receipt of this order failing which the above said amount shall carry 9% interest from the date of this order to till the date of payment.

Dictated to the Assistant transcribed and typed by her corrected and pronounced by us on this 10^th  day of February 2022

 

MEMBER – I                                                                PRESIDENT

LIST OF DOCUMENTS FILED BY THE COMPLAINANT:

Ex.A1 dated 31.10.2010                   Policy include 1^st premium exceipt

Ex.A2 dated 17.11.2011                   Payment receipt 2^nd premium receipt

Ex.A3 dated 13.11.2013                   Mail sent by the opposite party

Ex.A4 dated 15.04.2015                   Legal notice with acknowledgement card

Ex.A5 dated 01.09.2015                   Calculation sheet given by the opposite party

though mail

 

Ex.A6 dated 26.09.2017                   Super Saver Policy closure nefore IRDA

LIST OF DOCUMENTS FILED BY THE   OPPOSITE PARTIES:

 

Ex.B1 dated 18.06.2018                   Authorization letter

 

Ex.B2 dated 08.10.2010                   Proposal Form

 

Ex.B3 dated 05.12.2016                   Copy of policy with terms and conditions

 

 

 

MEMBER – I                                                               PRESIDENT