Chandigarh

DF-II

CC/40/2015

Krishan Pal Sharma - Complainant(s)

Versus

ICICI Prudential Life Insurance Company Limited - Opp.Party(s)

Sh. Devinder Kumar Adv.

12 Feb 2016

ORDER

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

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Consumer Complaint  No	:	40 of 2015
Date  of  Institution	:	29.12015
Date   of   Decision	:	12.2.2016

 

 

 

 

 

Krishan Pal Sharma s/o late Sh. Faqir Chand, aged about 79 years r/o H. No.3010, Town Road, Tehsil Kharar, District Mohali, Punjab.

                …..Complainant

Versus

 

1. ICICI Prudential Life Insurance Company Ltd. SCO No.134-135, First floor, Sector 8, Chandigarh through its Branch Manager.
2. ICICI Prudential  Life Insurance Company Ltd. regid office ICICI prulife towers, 1089, Appasaheb Marathe Marg, Prabhadevi, Mumbai 400 025 through its Managing Director.
3. Rahul C/o ICICI Prudential Life Insurance Co. Ltd. SCO No. 134-135, First Floor, Sector 8, Chandigarh.
4. Sahil C/o ICICI Proudential Life Insurance Company Ltd. SCO No. 134-135, First Floor, Sector 8, Chandigarh.

….. Opposite Parties

 

BEFORE:  SH.RAJAN DEWAN                 PRESIDENT

         SH.JASWINDER SINGH SIDHU       MEMBER

         MRS.PRITI MALHOTRA             MEMBER

 

 

For complainant(s)      :     Sh. Devinder Kumar, Advocate 

 

For Opposite Party(s)   :     Sh. Gaurav Bhardwaj, Advocate.

 

 

PER PRITI MALHOTRA, MEMBER

 

 

          As per the case, the complainant on the assurance of the OPs regarding double return of money with life insurance in case of investment of money with them, purchased five different policies i.e. 13242572, 13289305, 13426827, 13683152 and 14009420 from the Opposite Parties and paid Rs.1 lac to the OPs towards the premium. Thereafter in the month of July 2010 paid Rs.55000/- as next premium towards the policies in question to OPs No.3&4 and they issued receipts Annexure C-6 to C-8. It is averred that the complainant surprisingly received another policy from the OPs bearing No.14207277 and when he approached Opposite Party No.1 regarding the same he was shocked to know that Opposite Party No.3&4 instead of depositing amount of Rs.55000/- received from him towards the previous policy issued the aforesaid fresh policy by using Rs.15,000/-against the same out of Rs.55000/- and did not deposit the remaining 40,000/-. Under these circumstances the complainant vide letter dated 15.9.2010 sought refund of the amount and cancellation of all the policies and thereafter sent letter dated 8.10.2010. The representative of the OPs intimated the complainant that the amount would be refunded to him after expiry of three years. Accordingly the complainant after expiry of three years approached the Opposite Party No.1 but instead of refunding the amount Opposite Party No.1 vide letter dated 1.11.2010 intimated the complainant to approached Insurance Ombudsman for redresal of dispute. Alleging the said act of OPs as deficiency in service, this compliant has been filed.

 

2.     Opposite Parties in their joint reply stated that the complainant had not obtained the policies in question from the agents/employees of the  answering OPs as has been alleged by him.  In fact the complainant had availed the services of an independent insurance broker M/s Net Ambit Value Ltd. and SMC Brokers. An insurance broker is an independent   entity licensed by  IRDA (Insurance Regulatory & Development Authority)who advise their customers about their insurance needs and thereafter arrange insurance policy from any insurance company as per their own judgment and as per the customer’s choice.  The Insurance companies have not any administrative control over the insurance brokers as  they are governed by the provisions of IRDA (Insurance Brokers) Regulations, 2013 and IRDA also entertain  applications against insurance brokers. But the complainant failed to make a party to the said entity in the complaint. As such the complaint is liable to be dismissed for non-joinder of parties.  It is averred that the complainant was duly furnished policy documents alongwith copy of proposal form.  If the complainant was not satisfied with the policy he could have availed the  provision of free look period but he did not do so. It has been admitted that the complainant approached the insurance company on 15.9.2010 with an allegation that the premium amount given by him has been used in sourcing a new policy with premium amount of Rs.15000/- and the remaining amount was not deposited. On this the answering Opposite Parties vide letter dated 1.11.2010 informed the complainant that the receipt of premium submitted by him does not bear the stamp of the company. It has been denied that the answering OPs assured the complainant that the amount invested in policies in question would get doubled in three years.  Further averred that the complainant only paid one premium of the policies in question and all subsequent premiums remained unpaid as a result of which the policy NO.13242572 lapsed and all the remaining policies were foreclosed. 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 Parties 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.     It is admitted on the part of the Opposite Parties that the complainant duly applied for the five policies in question i.e. 13242572, 13289305, 13426827, 13683152 and 14009420 by paying an amount of Rs.1 lakh. The controversy arose when the complainant paid Rs.55000/- to one Rahul and Sahil (Opposite Party 3&4)the alleged employees of Opposite Party No.1&2 towards the next premium due under the above said policies. It is alleged by the complainant that the said employees of OPs by manipulating the things managed to issue a new policy bearing No.14207277 after adjusting Rs.15,000/- out of  Rs.55000/- paid by the complainant and usurp the remaining amount of Rs.40,000/-, which they never accounted for towards the premium due under the earlier policies issued by them.  The complainant also alleged that for such betrayal by the OPs he applied for the cancellation of all the policies vide letter dated 15.9.2010 and claimed refund of the whole amount paid towards the policies, which  OPs denied.
7.     The OPs in their defence pleaded that all the policies, in question, were duly  issued against the proposal forms submitted alongwith premiums. The OPs categorically denied that MR. Rahul and Mr. Sahil i.e.  O P NO.3&4 are  their employees and claimed that the complainant had sourced his policies through independent broker M/s Net Ambit Value Ltd.  and  the complaints against insurance brokers are triable by the IRDA only. Further claimed that the OPs have no role to play for the conduct of the said brokers. In its reply the OPs submitted that they duly issued all the policies and had received the premium for the first year only and  thereafter no premium was  received as per payment schedule and resultantly one of the policy NO. 13242572 lapsed and the others were foreclosed by the OPs for non payment of premium.  
8.     The OPs admitted that the complainant approached them for cancellation of the policies vide letter dated 15.9.2010 and the said request was declined for the reason that the complainant approached them beyond the period of 15 days provided as free look period under the terms and conditions of the the policies. Regarding the complaint of issuance of fresh policy by the employees of the OPs out of the amount paid towards premium of earlier policies, no satisfactory reply has been given by the OPs.
9.     It is observed that  the denial of the OPs-company  that Mr. Rahul and Mr. Sahil  are on  their pay rolls to whom the complainant claims to have given Rs.55000/-(premium of the policies for the second year) stands falsified when the OPs-company submitted their defence/written statement and evidence on behalf of all the OPs including MR. Rahul and Mr. Sahil. Nothing more is left to prove that MR. Rahul and Sahil are the employees of the insurance company (Opposite Party No.1&2) and also that both the employees have received Rs.55000/-  from the complainant on behalf of the OPs NO.1&2 and issued receipts Annexure C-6 to C-8 accordingly. The claim of the Opposite Parties that those receipts were not issued on their behalf as the same does not bear the stamp of their company, is useless and not trustworthy.
10.     It is further observed that the status of the all the policies issued has not been disclosed by the OPs as mandated under the notification dated July 2010 issued by the IRDA; the apex regulatory authority of the OPs. Only one line submission has been made in this regard by the Opposite Party company that out of these policies one of the policy lapsed and others have been foreclosed. In our opinion the act and conduct of the OPs is completely contradictory to the notification issued in July 2010 by the IRDA as they failed to act as per the guidelines prescribed in the notification and apparently never ever issued any notice to the complainant regarding the non payment of the premium. Further more the application dated 15.9.2010 submitted by the complainant for cancellation of the policies had also been ignored by the OPs. In these set of circumstances the clear case of deficiency in service on the part of the OPs is made out. The act and omission of OPs not only caused  financial loss to the complainant but also caused mental and physical harassment to the complainant.
11.  By virtue of non payment of premium,  the policies resultantly fell in the category of discontinued policies, which  shall be treated as per notification issued by IRDA in this regard in year July 2010.   The relevant  clause 7 of the regulation 2010 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.

 

12.     The above mentioned Clause No.7 of the Treatment of Discontinued Unit Linked Policies Regulations, 2010, is clearly applicable to the following five policies availed by the complainant;

 

	Policy NO.	Premium paid
1.	13242572	Rs.20,000/-,
2	13289305	Rs.20,000/-,
3	13426827	Rs.10,000/-,
4	13683152	Rs.20,000
5	14009420	Rs.30,000/-,

 

        As such the Opposite Parties are liable to refund the amount to the complainant in accordance with clause 7 as mention above. It is clear on record that for the above policies the complainant paid premium for the first year and thereafter due to misconduct of the employees of the Opposite Parties the second premium could not be adjusted towards the policies although the same was paid by the complainant, which caused the policies to lapse/foreclose. In addition to above the OPs are also liable to refund the amount of Rs.55,000/- paid by the complainant to the employees of Insurance Company which they failed to account towards the premium as instructed. The failure of the OPs in not conducting any enquiry in this regards proves not only deficiency in service on their part but also shows their indulgence into unfair trade practice.

        

13]          In view of the above discussion, we are of the opinion that the complaint deserves to be allowed.  Accordingly, the complaint is allowed and the Opposite Parties are jointly & severally directed as under:-

        

a]  To refund the complainant the premium amounts of each policies in the manner  prescribed under Clause 7 of the aforesaid noting dated July 2010 of IRDA.

 

b]  Also refund Rs. 55000/- with interest @9% p.a. from the date of deposit.

 

 C] To pay compensation of Rs.10,000/- for mental agony and physical harassment.

 

d)  To pay litigation cost of Rs.7000/-

 

 

         The above said order shall be complied with by the Opposite Parties within 45 days of its receipt, failing which they shall be liable to pay interest on  the amount awarded at (b) and (c) @18% p.a. from the date of this order till it is paid, besides paying litigation expenses.

 

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

 

Announced

12.2.2016                                                                                                                                                                                          sd/-

                                                                    (RAJAN DEWAN)

PRESIDENT

Sd/-

 (JASWINDER SINGH SIDHU)

MEMBER

 

Sd/-

(PRITI MALHOTRA)

MEMBER