Punjab

Ludhiana

CC/19/543

Gurmeet Singh - Complainant(s)

Versus

ICICI Prudential Life Ins.co.Ltd - Opp.Party(s)

Sushil Kumar Adv.

03 Jan 2024

ORDER

DISTRICT CONSUMER DISPUTES REDRESSAL COMMISSION, LUDHIANA.

                                                Complaint No:543 dated 26.11.2019.                                                         Date of decision: 03.01.2024.

 

Gurmeet Singh Aged 59 years son of Sh. Nikka Singh, R/o. H. No.55, Ward No.11, Dr. Ishar Singh Street, Doraha, Distt. Ludhiana-141412.                                                                                                               ..…Complainant

                                                Versus

ICICI Prudential Life Insurance Co. Ltd., Vinod Silk Mils Compound, Chaarkravarty Ashok Nagar, Ashok Road, Kandiwali (East) Mumbai-400101, through its Director/Managing Director/Secretary/Manager.                                                                                                                …..Opposite party 

Complaint Under section 12 of the Consumer Protection Act, 1986.

QUORUM:

SH. SANJEEV BATRA, PRESIDENT

MS. MONIKA BHAGAT, MEMBER

 

COUNSEL FOR THE PARTIES:

For complainant             :         Sh. Sushil Kumar Rana, Advocate.

For OP                           :         Sh. Karnish Gupta, Advocate.

 

ORDER

PER SANJEEV BATRA, PRESIDENT

1.                Shorn of unnecessary details, the facts of the case are that the complainant obtained ICICI Pru Health Saver Mediclaim Policy No.11718020 in the year 2009 from the OP for which the complainant paid 5 years regular p4remium of Rs.15,000/-. The last premium was paid on 05.04.2013. The complainant stated that there is clause in policy as per which the policy holder has option to pay first five years, which is reproduced as under:-

          “Cover continuance option:

This option ensures that your policy continues in case you are unable to pay premiums, any time after payment of first five years of premium. A applicable charges will be automatically deducted from the units available in your fund.”

The complainant further stated that reimbursement expenses of Rs.1072/- was credited in his account in January 2018. Then he approached the officials of OP for reimbursement of medical expenses in the month of May 2018 but OP company told him that his policy has been foreclosed. Even the reason for foreclosure of policy was not disclosed. However, OP told that said policy will be revived after payment of full 5 years installments, which is against the revival norms of the policy, which is reproduced as under:-

          “Policy foreclosure:

If fund value falls below 110% of one full Year’s premium, the policy holder will be informed and option to reduce the health Savings Benefit claim amount so that the fund value does not fall below 110% if the policy holder does not option to reduce the health saving benefit claim, the benefit shall be paid and the policy will be foreclosed.”

According to the complainant, the OP has not followed the terms and conditions of the policy. On 20.05.2018, the complainant made a complaint to the OP but the OP had not revived the policy. Rather the OP vide letter dated 31.07.2018 offered to refund an amount of Rs.26,774/- but they did not accept the request of revival. The complainant claimed to have suffered mental tension and agony on account of deficiency in service on the part of the OP for which the OP is liable to pay compensation. In the end, the complainant has prayed for issuing direction to the OP to revive the insurance policy without charging any further amount as premium from him and also to pay compensation of Rs.1,00,000/-.

2.                Upon notice, the OP appeared and filed written statement and by taking preliminary objections assailed the complaint on the ground of maintainability, lack of jurisdiction; lack of cause of action etc. The OP stated that it had received duly filled and signed application for insurance policy from the complainant and on the basis of duly filled proposal form dated 31.03.2009, they issued subject policy on 15.04.2009. That as per the policy availed by the complainant, he had to pay premium for the entire policy term and mode of premium was 'Annual'. The OP received only 5 premiums i.e., from the year 2009 till the year 2014 and the subsequent renewal premiums remained unpaid since 15.04.2014. The OP further stated that even after non-payment of the due renewal premiums the policy survived till April 2018, i.e. for a period of 9 years on the basis of the sustainable fund value. Since this is a ULIP policy which is based on market fluctuations, the customer was also given the facility of Cover Continuance Option (CCO) which gives the customer an option to continue with the life cover even if he is not paying the premiums for some time and that all applicable charges will be automatically deducted from the units available in the Policy's funds. The complainant had opted for CCO under the policy on 14.05.2014 and the same was effective from 16.05.2014. The OP had also informed the complainant vide its letter dated 16.05.2014 that the CCO facility opted for by him has been processed and will be activated on 16.05.2014. Further if the fund value falls below the specified foreclosure limit (applicable as per the policy terms and conditions), the policy shall be terminated by paying the surrender value. As per clause 26 of the applicable terms and conditions, if the fund value went below 110% of the one annual premium, the policy shall be foreclosed. The complainant was duly informed well in advance and the company also requested the complainant to pay the premiums under the policy vide letter dated 29 June 2017. In the said letter, the OP had informed the complainant that his policy was reaching the foreclosure limit and he should pay the premiums in order to avoid foreclosure of the policy and continue to enjoy the benefits under the policy. Despite the said intimation, the complainant did not pay any premium even after receiving the pre-foreclosure intimation letter. Although he was applied for a claim benefit on 29.11.2017 which was paid to him on 30.12.2017. According to the OP, the complainant cannot just pay premiums for 5 years and continue to claim benefits for 9 years without paying any additional premiums knowing fully well that the policy is a ULIP plan and the constant outflow from the funds without appropriate inflow of funds in the policy, will make his policy unsustainable at one point or the other in future. But the complainant stopped paying premiums from 15.04.2013 but was reaping the benefits under the policy till 2018. As the fund value under the policy fell below the foreclosure limit, the policy was foreclosed on 28.04.2018 as per the relevant clause of the policy.

                   The OP further stated that the complainant did not opt the free look cancellation period, if he was not satisfied with the terms and conditions of the policy in question. However, the complainant had submitted total five claims and the same were paid by the OP on 13.03.2012, 17.03.2012, 21.08.2015, 12.10.2015 and 30.12.2017 respectively. The said claims were assessed and accepted by the complainant and he never disputed the same. The OP further stated that it has already paid Rs.48,256/- towards various claims to the complainant till December 2017. The complainant had two other previous policies bearing No.06163370 and 06165366, out of which he surrendered the policy No.06163370 on 26.11.2010 and a surrender value of rs.44,260.32 was paid to him vide NEFT. And the other policy No.06165366 was foreclosed on 20.09.2010. As such, he was aware regarding the touch points of the company etc.

                   On merits, the OP reiterated the crux of averments made in the preliminary objections. The OP stated that on the basis of duly filled proposal form No.HS00023453 dated 31.03.2009 by the complainant, policy no.11718020 ICICI Pru Health Saver (U56) plan was issued on 15.04.2009, particulars of which are reproduced as under:-

Application Number	HS00023453
Policy Number	11718020
Policy Plan	ICICI Pru Health Save, U 56
Policy Status	Foreclosed on 18.04.2018
Life Assured	Gurmeet Singh
Servicing Agent	Khuswant Singh
Sum Assured	Rs.5,00,000/-
Proposal Received Date	March 31, 2009
Risk Commencement Date Policy Issue Date	April 15, 2009
Premium	Rs.15,000/-
Total Premium Paid	Rs.75,000/-
Premium Frequency	Annual
Paid to Date	15.04.2014
Dispatch Date	18.04.2009

 

The OP further stated that the complainant had availed five prior health claims under the policy during its existence, which were duly assessed and paid to the complainant as per terms and conditions of the policy. The complainant duly accepted these benefits without any protest or demeanor. The detail of previous five claims is reproduced as under:-

Claim No.	Intimation Date	Ailment	Claimed	Paid	Status
CL9034976	7/3/2012	Urinary Tract Infection	2410.00	1908	Accept
CL9034984	7/3/2012	Urinary Tract Infection	10405.830078125	8261	Accept
WC9199030	18/8/2015	Health Checkup	4500.00	4500	Accept
CL9203992	6/10/2015	Acute Febrile Illness with Thrombocytopenia, Dengue Fever, Hypertension	41624.00	31515	Accept
CL9295732	29/11/2017	Enteric Fever	1470.00	1072	Accept

 

 

The OP further stated that the complainant filed a complaint before the Insurance Ombudsman dated 17.07.2018 after foreclosure of the policy. Thereafter, the OP as a goodwill gesture gave an offer to the complainant vide letter dated 31.07.2018 to cancel the policy and refund of amount of Rs.26,744/- i.e. balance premium amount remaining with it after deduction of health claim amount paid to the complainant, but the complainant refused to accept the offer. Thereafter, vide letter dated 06.06.2019, the OP again as a goodwill gesture offered the complainant to instate the policy subject to submission of documents and to pay the outstanding total premium of Rs.1,20,000/- due from April 2014 onwards for 6 years but the complainant failed to comply with the same and the policy could not be revived. However, the Insurance Ombudsman vide its order dated 20.06.2019 dismissed the complaint in favour of the OP company with observation that the premium amount is the consideration amount required to keep the policy alive and that the complainant cannot deny paying the unpaid premium if he wants to revive the policy. The OP further stated that at all times it was trying to provide best services to the complainant and also covered the life of the complainant for the period for which premium was paid. The OP has denied that there is any deficiency of service and has also prayed for dismissal of the complaint.

3.                In support of his claim, the complainant tendered his affidavit Ex. CA in which he reiterated the allegations and the claim of compensation as stated in the complaint and also tendered affidavit Ex. C1 is the copy of welcome letter, Ex. C2 is the copy of policy certificate, Ex. C3 is the copy of first premium receipt and statement of account, Ex. C4 is the copy of premium deposit receipt dated 25.03.2010, Ex. C5 is the copy of premium receipt dated 09.04.2011, Ex. C6 is the copy of renewal premium receipt dated 16.04.2012, Ex. C7 is the copy of premium paid certificate for the year 2010-2011, Ex. C8 is the copy of premium deposit receipt dated 09.04.2013, Ex. C8/A is the copy of  key feature document, Ex. C9 is the copy of letter dated 16.05.2014 of the OP, Ex. C10 is the copy of letter dated 08.08.2014 of the OP, Ex. C11 is the copy of letter dated 17.05.2018 of the complainant, Ex. C12 is the copy of letter dated 31.07.2018 of the OP and closed the evidence.

4.                On the other hand, the counsel for the OP tendered affidavit Ex. RA of Ms. Archana Nair, Manager-II, Legal of ICICI Prudential Lie Insurance Company Ltd.  along with documents i.e. Ex. R1 is the copy of health insurance application form received on 31.03.2009, Ex. R2 is the copy of policy document, Ex. R3 is the copy of letter dated 16.05.2014 of the OP, Ex. R4 is the copy of letter dated 29.06.2017 of the OP, Ex. R5 is the copy of letter dated 31.07.2018 of the OP, Ex. R6 is the copy of letter dated 06.06.2019 of the OP, Ex. R7 is the copy of award dated 20.06.2019 of Insurance Ombudsman, Chandigarh and closed the evidence.

5.                We have heard the arguments of the counsel for the parties and also gone through the complaint, affidavit and annexed documents and written statement, affidavit and documents produced on record by both the parties. We have also gone through the written arguments submitted by the OP.

6.                Admittedly, on the basis of proposal form duly filled by the complainant, received on 31.03.2009 (Ex. R1), the OP issued an ICICI Pru Health Saver plan Ex. C1 = Ex. R1 on 31.03.2009. The complainant was required to pay the premium of Rs.15,000/- annually and the risk commenced from April 15, 2010. The following are the clauses which are relevant for the adjudication of the mater in controversy:-

                   “22.3 Cover continuance option:

This option ensures that your policy continues in case you are unable to pay premiums, any time after payment of first five years of premium. A applicable charges will be automatically deducted from the units available in your fund.”

"26. Policy foreclosure:

If fund value falls below 110% of one full Year’s premium, the policy holder will be informed and option to reduce the health Savings Benefit claim amount so that the fund value does not fall below 110% if the policy holder does not option to reduce the health saving benefit claim, the benefit shall be paid and the policy will be foreclosed.”

 

7.                The complainant paid annual premium for 5 years from 2009 to 2014 and did not pay the annual premium after 15.04.2014. By invoking the aforesaid clauses, the OP foreclosed the policy on 18.04.2018. The grievance raised by the complainant through this complaint is that the OP company did not inform him before effecting foreclosure of the policy, but the counsel for the OP has denied the same and has referred to the letter dated 16.05.2014 EX. C9 = Ex. R3. The operative part of the letter reads as under:-

          “We wish to inform you that your request for CCO facility has been processed and will be activated on 16/05/2014 + 2 years.

CCO gives you the option of continuing your life cover and rider cover (if any) even if you stop paying premiums, all applicable charges will be automatically deducted from the units available in your fond(s). If the Fund Value falls below the specified foreclosure limit (applicable as per policy terms & conditions), the policy shall be terminated by paying the surrender value.

          You can resume your premium payments any time within 2 years from the last premium paid date.”

 

Perusal of letter shows that the complainant was duly intimated so that the policy can be kept alive. Further it can also be borne from the record that on one hand, the complainant did not pay the premium but on the other hand, continued to prefer the mediclaim  and on 18.08.2015, 06.10.2015 and 29.11.2017 received a reimbursement amount of Rs.4500/-, Rs.31,515/- and Rs.1072/- respectively. In all, in a span of 9 years, the complainant availed 5 health claims during the subsistence of the policy. So from the sequel of above said events, it cannot be said that the complainant was not cautioned by the OP well in advance about the foreclosure of the policy. It is a fact that the complainant had approached the OP for reversal of foreclosure and reinstatement of the policy. The company vide letter dated 31.07.2018 Ex. C12 = Ex. R5 had offered a refund of amount of Rs.26,744/- as a gesture of goodwill subject to submission of consent and documents but the complainant did not submit the same. Even during the proceedings before the Insurance Ombudsman, Chandigarh, the OP made an another offer to the complainant to pay the outstanding premium of Rs.1,20,000/- which was due from April 2014 along with documents but that offer was also did not find favour of the complainant. The sum and substance of the litigation was also adjudicated by the Insurance Ombudsman, Chandigarh vide an award dated 20.06.2019 Ex. R7 with the following observations and conclusion:-

          “On going through the various documents available in the file and also hearing both the complainant and the representative of Insurance Company, it is observed that the complainant was informed about the revival of the policy along with amount due and other requirements for underwriting. It is also observed that the insurer has also offered him refund amount if complainant does not want to continue with policy. Since the premium is consideration amount to keep policy in force the complainant cannot deny paying unpaid premium amount. Keeping in view of the above facts, no deficiency in service is observed on the part of the insured.

          Taking into account the facts & circumstances of the case and the submissions made by both the parties during the course of hearing, the complaint is dismissed.”

Keeping in view the facts and circumstances of the case, this Commission is of the opinion that there is no deficiency in service on the part of the OP and as such, this complaint being devoid of any merits, deserves to be dismissed.

9.                As a result of above discussion, the complaint is hereby dismissed being devoid of any merits However, there shall be no order as to costs.  Copies of the order be supplied to the parties free of costs as per rules. File be indexed and consigned to record room.

10.              Due to huge pendency of cases, the complaint could not be decided within statutory period.

 

(Monika Bhagat)                                (Sanjeev Batra)

Member                                              President 

 

Announced in Open Commission.

Dated:03.01.2024.

Gobind Ram.