O R D E R

By Sri. C.T. Sabu, President :

          The complainant’s case is that she had taken a Unit linked policy with the opposite party on 23/08/2007.  Policy details are as follows : 

Policy No. 28007083501. Premium Rs.1,00,000/-.

Its maturity was on 23^rd August 2012.

It was advised by the Insurance Advisor that the complainant could withdraw the amount on her free will any time after the maturity period in full as stated by the complainant. Accordingly the complainant visited the office in the month of May 2013 and she was informed that the amount had been commuted to a pension plan on maturity and the amount could be claimed only as such. Furthermore it was informed that an option mentioned in the policy document would be binding on the complainant ie, claim one third of the amount and commute the remaining to a pension policy. Complainant alleges that transferring her money without her consent and disproving her of right to choice amounts to unfair trade practice. Opposite parties claims that they have only intimated by registered post all the details. Later it is under stood that no such intimation has been done by them. Complainant apprehends that there is  some unholy alliance and nexus between the Manager and other Officers involved in the claim processing section to deprive the complainant from what is due to her. Complainant submits that the above investment was made for the sole purpose of constructing / acquiring a home for her daughter. The entire purpose was defeated by the opposite parties and the complainant was put to great hardships, sufferings and mental agony. Opposite parties have no right to act like this and they have not been authorised by words or deeds and the complainant had not been explained so far about the nature of transaction as acted by the opposite parties.  Therefore, finding unfair trade practice and deficiency in service complaint may be allowed directing the opposite parties to

1. Pay maturity value of the policy as per the applicable NAV of the fund.
2. Pay interest from 09/06/2013 to the date of settlement at the current rates.
3. Pay Rs.50,000/- towards compensation for mental agony.
4. Pay Rs.1,50,000/- compensation for inconvenience and monetary loss.

          2) Case was admitted. Ordered notice to opposite parties. 1^st to 3^rd opposite parties appeared before the Commission through counsel and filed version. 4^th to 5^th opposite parties remained absent even after repeated notice and they are set ex-parte. In the version it is stated by the opposite parties 1 to 3 that the policy holder does not have the option of receiving the maturity amount in lump sum, except to the extent of 33% of the accumulated sum. As per policy opposite party gives several options of annuities and the insured has to choose his/her preferred types of annuity and accordingly will get the annuity. Opposite parties further state that the policy in dispute is a pension policy in which the policy holders contributions will be accumulated in the personal pension account (PPA) so as to choose the types of annuities. Besides, opposite parties advance certain preliminary objections viz.

1. Complainant is not maintainable for want of territorial jurisdiction.
2. Complaint is barred by limitation and the same is not followed by any application for condonation.
3. The policy was issued strictly based on the details provided in the proposal form.
4. The policy documents stipulate the terms and condition and the benefits payable under the policy and mode of payments.
5. Both the insurer and the insured are bound by the terms and conditions of the policy.
6. Acting as per the terms and conditions of the policy does not amount to deficiency in service or unfair trade practice.
7. Opposite party has sent an intimation letter dtd. 08/05/2012 to the complainant requesting her to choose the type of annuity she prefers to opt along with the list of requirements. It seems that the complainant has not submitted annuity option sheet along with requirements.
8. Annuity payment will be initiated soon after the receipt of the mandatory requirements from the complainant.
9. There is no cause of action.
10. There is no deficiency in service on the part of answering opposite parties and therefore complaint may be dismissed in limine with costs.

          3) Then the case posted for evidence. The points for considerations are the following.

1. Is there any deficiency in service or unfair trade practice on the part of opposite parties ?.
2. If yes reliefs and costs ?

4) Complainant and opposite parties 1^st to 3^rd filed proof affidavits. Complainant produced two documents and marked as Ext. P1 to P2. Opposite parties produced 4 documents that are marked as Ext. R1 to R4. No oral evidence was tendered.

Ext. P1 is the Policy Schedule, receipt of premium and terms and conditions.

Ext. P2 is the Postal Acknowledgement

Ext. R1 is the duly filled proposal Form

Ext. R2 is the Terms and conditions of SBI Life – “UNIT PLUS II PENSION”

UNIT LINKED PRODUCT-NON-PARTICIPATING.

Ext. R3 is the Letter dtd.08/05/2012 for selecting option.

Ext. R4 is the Equity Pension Fund Statement.

5) Appreciation of Evidence :

We have examined proof affidavits, documents, argument notes and points raised during its final hearing and are convinced that on both sides there are lapses. In the proof affidavit complainant affirms that an insurance advisor who is the respondent No.4 had advised that complainant could withdraw the amount on her free will, any time after the maturity period in full. As a party to the proceeding he had a pious duty to appear before the Commission and to submit his versi0n with regard to the veracity of the allegation of the complainant. Even after giving an opportunity to submit his version failure to do the same is viewed seriously by this Commission and find no other alternative but to find that the Insurance Advisor might have given tall promises while soliciting the business. In the capacity of an agent the principal company has to bear the responsibility.

6) In the counter affidavit filed by the opposite party along with Ext. R4 proved that “It is humbly submitted that in the proposal form submitted under 28007083501 under question No. 3.3 . P1 choose the Fund and indicate the % of premium that should be allocated to the funds selected; the complainant have opted for 100% in equity pension fund and the company just invested these funds in deference to the wishes of the policy holders. In Equity, 0% to 20% funds are invested in Debt and Money market instruments. The answering opposite parties have invested accordingly. We may examine the original version and proof affidavit where under para 6 opposite party had sent the maturity intimation letter dtd. 08/05/12 on 10/05/12 vide speed post No. EM 206487285 IN to the complainant and he had not submitted annuity option sheet along with the requirements. Opposite party now alleges that demand of the complainant for full amount of surrender value is ultravires the terms and condition of the policy which are duly approved by the IRDA. This Commission finds fault with the opposite party for the following reasons.

1. The opposite parties had a greater role to understand the intention of the complainant and to explain the terms and conditions if the intention was contrary to the terms and conditions.
2. ULIP schemes were nascent in origin at that time though it was first introduced by Unit Trust of India in 2001. Major guidelines were issued only in 2005 by IRDAI (Insurance Regulatory and Development Authority of India). Unit Linked Insurance Plan is essentially a combination of Insurance and an investment vehicle. A portion of the premium paid by the policyholder is utilized to provide Insurance coverage to the policyholder and the remaining portion is invested equity and debt instruments. The aggregate premium collected by the insurance company providing such plans is pooled and invested in varying proportion of debt and equity securities in a similar manner to mutual funds. Each policy holder has the option to select a personalised investment mix based on her/his investment needs and risk appetite. Like mutual funds each policy holder’s Unit linked Insurance plan holds a certain number of funds units, each of which has Net Asset Value (NAV) that is declared on a daily basis. The NAV is the value up on which net rates of return on ULIPs are determined. The NAV varies based on market condition and fund performance.
3. In the instant case, though the complainant is an educated person, it is crystal clear that her intention was a pure investment for a short period in order to serve a purpose as in the case of a normal customer.
4. The Ext. R3 said to have been sent through speed post is not proved by postal acknowledgment. As denied by the complainant onus is more on the opposite party to establish the same. In the absence of any reply one more letter could have been sent by the opposite parties reminding that if no reply is forthcoming within a specified period we will invest the amount without commutation as per our choice or as given in the original proposal form.
5. The reliance on basis clause by an insurer has got certain positive role as well. The great advantage the insurer derives from the basis clause carries with it the plain duty on the part of insurer to explain the implications of the clause fully to the insured and further to explain each of the questions of which the answers are sought in the personal statement.
6. Utmost good faith and candowe from the insured can only go hand in hand with fair explanation and honourable dealing from the Insurer.
7. If the insurer wants to dishonour a claim on the ground of misstatement by the insured he must establish to the satisfaction of this Commission that he acted fairly and honourably to the insured by explaining properly the implication of the declaration to be signed by the insured and the range or amplitude of the question required to be answered.
8. Once it was observed by Lord Shaw in a historic case (AIR 1921 PC 195) “In a contract of insurance it is weighty fact that the question are framed by the insurer and that, if an answer is obtained to such a question which is up on a fair construction a true answer, it is not open to the insuring company to maintain that the question was put in a sense different from or more comprehensive there the proponent’s answer covered.
9. Section 113 of the Insurance Act provides for accrual of certain benefits to policy holders even if they are unable to keep their policies in full force by payment of further premiums. If premium for at least three consecutive years have been paid, there shall be a guaranteed surrender value. If the policy is not surrendered, it shall subsist as a paid up policy for reduced sum. The policy condition usually provide for a more liberal surrender value and paid up value than those secured by the statutory provisions.
10. Being an educated person the complainant would have remained little more vigilant while signing such proposed forms. As rightly reminded this Commission by the opposite party it is settled that this Commission cannot go beyond the terms and conditions of policy duly entered after compliance fall features of a contract.
11.  We also find that all other question with regard the consumer and limitation are devoid of any merits at all.

7) As we have found lapses on both parties. We give a verdict partly allowing the complaint providing relief to the complainant as follows.

    8) Reliefs and costs :

Opposite partiesare directed to release 33% of total accrued amount on its maturity date with 12% interest from the date of maturity till payment. Opposite parties are also directed to release 33% of the accrued amount with 12% from 2012 to 2021 to the complainant. Opposite parties are directed to get a fresh option from the complainant and complainant should give the option within 30 days from the date of this order. Rs.5,000/- (Rupees Five thousand only) awarded towards cost. Complaint allowed accordingly.

            Dictated to the Confidential Assistant, transcribed by her, corrected by me and pronounced in the open Commission this the 30^th day of June 2021.  

    Sd/-                                                                                           Sd/-

Sreeja S.                                                                                  C. T. Sabu

Member                                                                                                      President

                                                    Appendix

Complainant’s Exhibits :

Ext. P1 Policy Schedule, receipt of premium and terms and conditions.

Ext. P2 Postal Acknowledgement

Opposite Parties’ Exhibits :

Ext. R1 duly filled proposal Form

Ext. R2 Terms and conditions ofSBI Life – “UNIT PLUS II PENSION”

UNIT LINKED PRODUCT-NON-PARTICIPATING.

Ext. R3 Letter dtd.08/05/2012 for selecting option.

Ext. R4 Equity Pension Fund Statement.

                                                                                                     Id/-

                                                                                                President