DISTRICT CONSUMER DISPUTES REDRESSAL FORUM,

BATHINDA (PUNJAB)

CC No. 499 of 12-10-2011

Decided on : 28-03-2012

Surinderpal Kaur, aged 43 years, daughter of Sh. Malkiat Singh R/o V.P.O. Laleana,Tehsil Talwandi Sabo, District Bathinda.

... Complainant

Versus

1. Bajaj Allianz Life Insurance Co. Ltd., Plot No. 271, Industrial Area, Phase 2, Panchkula (Haryana) through its Manager

2. Bajaj Allianz General Insurance Co. Ltd., First Floor, ICICI Bank Building, 100 Ft. Chowk, Bathinda, through Branch Manager

   ..... Opposite parties

Complaint under Section 12 of the Consumer ProtectionAct,1986

QUORUM

Smt. Vikramjit Kaur Soni, President

Sh. Amarjeet Paul, Member

Smt. Sukhwinder Kaur, Member

For the Complainant : Sh. Sukhmander Singh, counsel for the complainant

For the Opposite parties : Sh. M.L. Bansal, counsel for opposite parties.

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 Jasveer Kaur, agent of the opposite parties approached her with the proposal to purchase the insurance policy and that amount would be invested in stock market. The complainant would be paid the profit and after three years the amount would be refunded alongwith interest. Accordingly, the complainant purchased policy No. 0090931323 (Bajaj Allianz New Unit Gain) and paid premium of Rs. 24,000/- commencing from 28-03-2008. On 24-06-2011, the complainant requested the opposite parties to refund Rs. 24,000/- with interest @18% P.A. alongwith profit, but the opposite parties informed her that the policy has been cancelled. The complainant alleged that the opposite parties have no right to cancel the policy of the complainant and forfeit her amount. No such condition was disclosed to the complainant at the time of effecting the insurance. The complainant further alleged that it is settled law that she is still entitled to the surrender value from the opposite parties. The complainant repeatedly requested the opposite parties to refund the amount and also got served legal notice in this regard, but to no effect. Hence, she has filed the present complaint seeking directions to the opposite party to refund the insurance amount of Rs. 24,000/- alongwith interest and pay compensation and cost.

2. The opposite parties filed their joint written reply and pleaded that complaint is barred by limitation as the policy bearing No. 0090931323 was issued with date of commencement as 28-03-2008 and the same was lapsed w.e.f. 28-03-2009 due to non-payment of yearly premiums. It has been pleaded that original policy bond containing terms and conditions of the contract was dispatched to her through BFC courier POD No. 193776405 dated 10-04-2008 and the receipt of the said policy document was never disputed by the complainant. The complainant was given 10 days free look cancellation period to review the terms and conditions of the policy and make written request for cancellation of policy with return of policy document if she was not satisfied with the policy in question. The complainant herself out of her free will opted for the Unit Linked Regular Premium paying Bajaj Allianz 'New Unit Gain' plan of the opposite parties with a premium paying term of 20 years after fully understanding the terms and conditions of the proposed plan. The complainant did not pay the regular yearly premiums due on 28-03-2009 and onwards knowing well that her policy would lapse and the same would be terminated if the same is not revived within a period of 2 years from first unpaid premium. The complainant did not make any effort to get her policy revived within the revival period of 2 years which ultimately expired on 27-03-2011. The contract of insurance stands terminated strictly in accordance with the terms and conditions of the policy and nothing is payable under the policy. The opposite parties have denied that any of the representative of the opposite parties ever assured the complainant that the amount would be refunded with interest. The opposite parties have pleaded that the complainant opted for the Unit Linked Insurance policy wherein the investment risk of the investment portfolio is borne by the policy holder and the performance of the underlying fund is subject to market risks. The silence on the part of complainant for more than 3 years and non receipt of any written request for cancellation of policy within free look cancellation period by the opposite parties clearly indicates that the complainant was fully satisfied with the terms and conditions of the policy.

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. The submissions of the learned counsel for the opposite parties is that the original policy bond containing terms and conditions of the contract was dispatched to her through BFC courier POD No. 193776405 dated 10-04-2008 and the receipt of the said policy document was never disputed by the complainant. The complainant was given 15 days free look cancellation period to review the terms and conditions of the policy and make written request for cancellation of policy with return of policy document if she was not satisfied with the policy in question. The silence on the part of complainant for more than 3 years and non receipt of any written request for cancellation of policy within free look cancellation period by the opposite parties clearly indicates that the complainant was fully satisfied with the terms and conditions of the policy. He further submitted that although the complainant is not entitled to any refund yet if any amount is payable, that is payable according to the terms and conditions of the policy.

6. The learned counsel for the complainant submitted that the complainant has not received the policy document alongwith terms and conditions and as such, the question of applying for cancellation within free look period and for revival of policy does not arise. He submitted that it was informed to the complainant by the agent of the opposite parties at the time of effecting the insurance that the policy in question is a one time premium policy and she can get refund alongwith interest after three years. The complainant has not received any letter from the opposite parties regarding cancellation of the policy in question.

7. The opposite parties have produced on file proposal from Ex. R-2 filled and signed by the complainant for getting the insurance policy in question. A perusal of this proposal form reveals that in the last para of said proposal form a condition of Free Look Period has been given that too applies on receipt of policy document alongwith terms and conditions. The opposite parties have not placed on record the complete policy document alongwith terms and conditions which were supplied to the complainant. The opposite parties in para No. 4 of their written reply have stated that the original policy bond containing terms and conditions of the contract was dispatched to her through BFC courier POD No. 193776405 dated 10-04-2008. To prove that the policy documents have been sent to the complainant, the opposite parties have produced on file document Ex. R-4. A perusal of Ex. R-4 reveals that it is a computer generated document of the opposite parties which shows that policy in question of the complainant has been sent through courier on 10-04-2008. No courier receipt has been produced on file by the opposite parties to prove that actually policy in question alongwith terms and conditions were delivered to the complainant. In the absence of any evidence, it cannot be believed that policy in question alongwith terms and conditions was supplied to the complainant. 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 either on the proposal form or on the first premium receipt Ex. C-2. However, a perusal of Ex. R-5 computer generated policy document reveals that policy term is 20 and date of maturity is 28^th March, 2028. A perusal of proposal form Ex. R-2 further reveals that at page 2 the premium is mentioned as 24,000/- and sum assured is also mentioned as Rs. 24,000/-. In the end of proposal form under the heading 'Insurance Consultant Report' sum assured is mentioned as Rs. 1,20,000/-. This declaration itself reveals that complainant was not aware of the actual policy terms. Hence, such type of practice i.e. not making aware of the consumers about terms and conditions of the insurance policies, of the insurance companies keeps the consumers in dark. In such circumstances, she could not apply for cancellation of policy within free look period or for revival of policy. Moreover, the opposite parties have not produced on file that they had written any letter to the complainant making her aware regarding cancellation of policy for non-payment of installment of premium.

8. The opposite parties before issuance of insurance policy in question neither informed her the terms and conditions of the policy nor sent her the policy alongwith terms and conditions and misguided her, resultantly, she deposited Rs. 24,000/- with the opposite parties under the bonafide impression that the policy in question is a single premium policy and she would receive its refund alongwith interest as well as remained covered under policy.

9. 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 parties 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 the complainant. 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

10. In view of what has been discussed above, this complaint is partly accepted with Rs.2,000/- as cost and compensation against the opposite parties. The opposite parties are directed to refund the fund value to the complainant, after deducting 15% amount from the deposited premium of Rs. 24,000/- as the policy period is more than 10 years and the complainant has paid single/one premium.

11. 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. 12-10-2011 till realization.

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

Pronounced

28-03-2012 (Vikramjit Kaur Soni)

President

(Amarjeet Paul)

Member

(Sukhwinder Kaur )

Member