Chandigarh

DF-II

CC/402/2014

Narinder Pal Singh - Complainant(s)

Versus

Bajaj Allianz Life Insurance Company Limited - Opp.Party(s)

Deepak Aggarwal, Adv.

02 Jan 2017

ORDER

DISTRICT CONSUMER DISPUTES REDRESSAL FORUM-II, U.T. CHANDIGARH

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Consumer Complaint  No	:	402 of 2014
Date  of  Institution	:	7.8.2014
Date   of   Decision	:	2.1.2017

 

 

 

 

 

Narinder Pal Singh Son of Sh. Lahmber Ram Mahi resident of H. No.1546, Sector 50B, Chandigarh.

                …..Complainant

Versus

 

Bajaj Allianz Life Insurance Company Ltd. through its Director SCO No.45, Pocket 1, Near V-mart, NAC, Manimajra, Chandigarh.

….. Opposite Parties

 

BEFORE:  SH.RAJAN DEWAN                 PRESIDENT

         MRS.PRITI MALHOTRA             MEMBER

         SH. RAVINDER SINGH             MEMBER

 

 

For complainant(s)      :     Sh. Deepak Aggarwal, Adv.  

 

For OP                  :     Sh. Varun Chawla, Adv.

                   

 

 

PER PRITI MALHOTRA, MEMBER

 

 

     As per the case, the complainant was allured with the rosy picture presented by the official of OP regarding featurs of its policy product, who claimed that  the policy in question is single premium policy where the complainant is required to pay one premium only and lock in period for the policy is 3 years from the date of commencement; who also claimed  that further on the commencement of fourth policy year  the complainant is duly entitled to the mature value of the policy, also claimed that the policy cannot be terminated within the lock in period in order to get refund/surrender value.  Believing  the salient features as explained to be true, complainant purchased Bajaj Allianz New Unit Gain policy  from the OP and paid the single premium of Rs.30,000/-. It is averred that the OP also assured the complainant that he would get multiple return on his investment. It is alleged that after waiting sufficiently when the complainant enquired about the status of the policy it transpired that the amount invested by him in the scheme of the OP instead of increas had  been lapsed without value and now the complainant is entitled only for Rs. 1967/-, which according to the OP is as per the terms and conditions of the policy in question. The complainant took up the matter with the OP and exchanged  good amount of correspondence but nothing fruitful came out. Ultimately, the complainant served a legal notice dated 7.10.2013 to the OP claiming refund of his entire amount but to no avail. Alleging the said act of OP as deficiency in service, this compliant has been filed.

 

2.     The Opposite Party in its reply stated that the complainant after fully understanding the features, benefits, risk, terms and conditions of whole life regular premium “New Unit Gain” plan, himself out of his free will proposed for the policy vide proposal form. It is denied that the complainant was ever promised any fixed amount upon payment of single premium as alleged.  Averred that the complainant himself opted for a regular premium policy, thus, the question of asking him to pay single premium does not arise.  It is further asserted that the schedule of policy document clearly indicates that regular premiums are payable under the policy and complainant never disputed or challenged the terms of the contract for more than 5¼  as contained  in the policy document received by him. Further averred that no cause of action has arisen in favour of the complainant against the answering OP as contract under the policy in question stands already terminated due to non-payment of regular premiums & strictly in accordance with the terms and conditions of policy an amount of Rs.1967.27 already stands paid to the complainant as permissible surrender value vide cheque NO.636945 dated 6.3.2012 upon termination of contract of insurance due to non-payment of regular premiums under the policy and nothing more is liable to be paid. It is further asserted that the   OP has acted strictly as per the terms and conditions of the policy and  nothing is payable to the complainant.  Pleading no deficiency in service and denying rest of the allegations, it is prayed that the complaint be dismissed.
3.     The Complainant also filed rejoinder thereby reiterating the averments as made in complaint and controverting that of the Opposite Party made in the reply.
4.     Parties led evidence in support of their contentions.
5.     We have heard the ld. Counsel for the Parties and have also perused the record.
6.     Factually, the complainant availed the “New Unit Gain” policy from the OP after being allured by the assured returns claimed by the agent of the OP by paying premium amount of Rs. 30,000/-. After paying single premium the complainant stopped paying further payment as was allegedly assured that after three years of lock in period the invested amount be doubled. The complainant when approached after lock in period he got surprised when the OP declared that the complainant is entitled only for Rs. 1967.27 as his policy has been auto-foreclosed.  It is also matter of record that the OP paid an amount of Rs.1967/- in the account of the complainant, which is disputed by the complainant vide the present complaint. The matter was also disputed by the complainant by issuing legal notice to the OP.
7.     In our considered opinion the OP rendered deficient services as well resorted to unfair trade practice while calculating and  disbursing the surrender value/foreclosure amount to the complainant, which it claimed to have calculated as per terms and conditions of the policy; as it ignored the provisions of Insurance Regulatory and Development Authority (Treatment of Discontinued Linked Policies)  Regulation, 2010. It is necessary to quote here that all insurance policies are issued as per the IRDA guidelines applicable at the point of issue and further such policies do also stands modified in terms of any IRDA regulations that comes thereafter and has a bearing on such policies.  Accordingly, the case of the complainant was to be dealt as per the guidelines of (Treatment of Discontinued Unit Linked Policies) Regulation, 2010 issued by the IRDA. The relevant extract of the said regulation is reproduced as under:-

“Obligations of an insurer upon discontinuance of a policy

7.         The obligations of the insurer in this regard shall be as follows:-

i.          To impose discontinuance charges only to recoup expenses incurred towards procurement, administration of the policy and  incidental thereto.

ii.         To design the discontinuance charges to encourage the policyholder to continue with the contract for the full term;

iii.       To ensure that the discontinuance charges reflect the actual expenses incurred.

iv.        To structure the discontinuance charges within the statutory ceilings on commissions and expenses and

5. To ensure that the charges levied on the date of discontinuance (as a percentage of one annualized premium) do not exceed the limits specified below:-

 

Where the policy is discontinued during the policy year.	Maximum Discontinuance charges for the policies having annualized premium up to Rs.25000/-	Maximum discontinuance charges for the policies having annualized premium above Rs.25000/-
1	Lower of 20% (AP or FV) subject to a maximum of Rs.3000.	Lower of 6% (AP or FV) subject to maximum of Rs.6000/-
2	Lower of 15% (AP or FV) subject to a maximum of Rs.2000.	Lower of 4% of (AP or FV) subject to maximum of Rs.5000/-
3	Lower of 10% (AP or FV) subject to a maximum of Rs.1500.	Lower of 3% (AP or FV) subject to maximum of Rs.4000/-
4	Lower of 5% (AP or FV) subject to a maximum of Rs.1000.	Lower of 2% (AP or FV) subject to maximum of Rs.2000.
5 and onwards	NIL	NIL

  AP - Annualised premium

FV- fund value on the date of discontinuance

Provided that where a policy is discontinued, only discontinuance charge may be levied by the insurer, and no other charges by whatsoever name called shall be levied.

Provided that no discontinuance charges shall be imposed on single premium policies and on top ups.”

            8.         xxxxxxxxxxxxxx

9.         Every insurer shall send a statement of account, on a half yearly basis, within fifteen days, in respect of every policy in force including discontinued policies where the proceeds are yet to be paid to the policyholder or her nominee as the case may be, his last known address, which shall contain the following details :-

(i) The total premium paid by the policyholder

(ii) Next due date of the premium

(iii) Pattern of the investment chosen

(iv) Pattern of investment

(v) Status of the policy

(vi) Total fund value

(vii) Total units

(viii) Detail of charges recovered.”

          The contents of Regulation-9 clearly indicate that these regulations are attracted even to the policies, which are in existence on 1st July, 2010 and also to the policies, which are in the discontinued mode and the proceeds of such policies had not been paid to the insured.  Meaning thereby, that the case of the complainant is squarely covered under Regulation 9 of the IRDA Regulations, 2010, quoted above.  In the present complaint, against the premium of Rs.30,000/- the complainant was paid back Rs.1967.27 vide cheque dated 6.3.2012 on the termination of contract of insurance  due to non-payment of required premium, which clearly projects the bad intention of the OP, who ignored the above quoted instructions while calculating the surrender value

     Although the OP in their written statement contended that the IRDA notification dated 1^st July, 2010 quoted above putting maximum cap in case of discontinued policies is applicable prospectively i.e.  to the prospective policies only and not applicable retrospectively but the said plea stands rejected in view of the above discussion.  The complainant has deposited Rs.30,000/- on 18.2.2009  with OP but it paid back only Rs.1967.27 in 2012.  The OP has miserably failed to justify deductions of Rs.28033/- (30000-1967) out of the invested amount of the complainant. The OP cannot be allowed to usurp the hard earned amount of the complainant by hypothetical reasons.  The basic amount of investment cannot be reduced to such an extent as has lowered in the present case.  The economy of India is growing rapidly but it is unfortunate that the insurance companies always show losses and failed to pay profits to the investors. We are of the considered opinion that the transaction in the present case lacs total transparency. Moreso, the OP has also failed to adhere the provisions of the Regulation 2010 issued by its governing body as discussed earlier. In the given set of circumstances so we deem it proper that the complainant be refunded back his invested amount of Rs.30,000/- less the amount of Rs.1967.27 (already paid) 

8.     In view of the above the OP is found deficient in rendering service to the complainant and is held guilty of resorting to unfair trade practice. Accordingly, the complaint is allowed. The OP is directed as under:-

 

1. To pay Rs.28033/- (30,000-1967.27) to the complainant alongwith interest @9% p.a. from the date of deposit of the premium till realization.

 

2. To pay Rs.10,000/- to the complainant towards compensation for deficiency in rendering service and unfair trade practice.  

 

3. To pay costs of litigation of Rs.5000/- to the complainant.

 

 

9.     The above said order shall be complied  with  by the OP within 30 days  from the date of receipt of the certified copy of this order failing which it shall be liable to pay interest @18% p.a. on the amount at (a) from the date of deposit of the premium of the policy till such amount is paid and also on the compensation amount at (b) from the date of filing the present complaint till realization apart from paying litigation costs.

         The certified copy of this order be sent to the parties free of charge, after which the file be consigned.

Announced

2.1.2017

                                                                                       Sd/-

 (RAJAN DEWAN)

PRESIDENT

 

 

Sd/-

(PRITI MALHOTRA)

MEMBER

 

Sd/-

(RAVINDER SINGH)

MEMBER