Delhi

North

CC/47/2015

AKSHAY GARG - Complainant(s)

Versus

IDBI FORTIS LIFE INSURANCE CO. - Opp.Party(s)

09 Feb 2023

ORDER

District Consumer Disputes Redressal Commission-I (North District)

[Govt. of NCT of Delhi]

Ground Floor, Court Annexe -2 Building, Tis Hazari Court Complex, Delhi- 110054

 

Consumer Complaint No.: 47/2015

In the matter of

Akshay Garg

2/68, Roop Nagar

Delhi-110007                                                       …      Complainant

VERSUS

Ages Fedreral Life Insurance Company Limited

(Formerly IDBI Fortis Life Insurance Co. Ltd.)

Regd. Office: 22^nd Floor, A Wing, Marathon Futurex

N M Joshi Marg, Lower Parel

East Mumbai City, MH- 400013

(Email: corporate.relations@ageasfederal.com)

Also at: Office No. 907&908, 9^th Floor, Kanchanjunga

Plot No. 18, Barakhamba Road

Connaught Place, New Delhi- 110001

Also at: 903, 9^th Floor, Aggarwal Corporate Heights

Plot No. A-7, Centre Netaji Subhash Place

Pitampura, New Delhi- 110034                                      …      Opposite Party

 

ORDER

09/02/2023

(Divya Jyoti Jaipuriar)

By way of this complaint, the Complainant has alleged that the erstwhile company namely M/s IDBI Fortis Life Insurance Company Limited has not made the payment of the claim filed by the Complainant.

At the onset, it is to be noted that subsequent to completion of pleadings, the original Opposite Party namely M/s IDBI Fortis Life Insurance Co. Ltd. has been taken over by M/s AGEAS Group and the name of the said Opposite Party has changed to M/s Ageas Federal Life Insurance Company Limited. Accordingly, on the application filed by the Complainant, the name of the OP was changed.

The mother of the Complainant namely Late Mrs Seema Gupta purchased the policy “IDBI Fortis Wealthsurance Foundation Plan” on 10.08.2010 for a policy term of 20 years. The sum assured of the policy was Rs. 14,00,000/-. The Policy Holder was required to pay the half-yearly premium of Rs. 15,000/- on 10^th August and 10^th February every year till February 2030. Accordingly the OP issued the policy certificate and the terms and conditions applicable to the said policy, which form part of the complaint. The name of the Complainant herein appears as nominee including under section 39 of the Insurance Act, 1938 with 100% share of the proceeds receivable after her death.

The Complainant alleges that his mother made the payments regularly till February 2014, which was duly acknowledged in the emails so sent by the OP. When the payment of half yearly premium due in the month of August 2014 was attempted, because of some error in the payment gateway and website of the OP, the payment was not successful. In this regard, the Complainant’s mother also communicated with the OP through channels of customer care and emails. However the OP has terminated the policy of the Complainant’s mother on policy month anniversary as “Fund Value after deducting surrender charge was falling below one annualised premium and policy status was policy discontinuance”.

On 17.09.2014, the OP has addressed a letter to the policy holder that the policy was terminated on 10.09.2014 as the policy was in lapse status and was not revived within the revival period of 2 years. Accordingly the policy holder filed a complaint before Insurance Regulatory and Development Authority of India (IRDAI) through email, which was also forwarded to OP.

In reply to the complaint made to the IRDAI, the OP has intimated to the Insured on 10.12.2014 that based on OP’s evaluation, the policy holder would be given option to terminate the policy which would be processed on receipt of (i) duly signed Personal Health Statement and (ii) Outstanding premium of Rs. 15,000/- which was due on 10^th August 2014.

By the time, this letter was communicated to the Complainant, the insured namely Smt. Seema Gupta had expired on 07.11.2014. The Complainant herein informed the OP about the death of the insured and his mother through his letter dated 03.01.2015 and asked for releasing the insured amount in his favour as his name appears as the nominee in the policy. By the same letter, he also replied to the communication dated 10.12.2014. It is interesting to note here that the communication about the death of the insured was sent by the Complainant through email on 03.01.2015 at 12:32 pm and the said email was replied by the OP on the same day at 06:36 pm. But it appears that the officer replying to the email of the Complainant did not go through the contents of the email of the Complainant and asked the Complainant to submit the documents as communicated vide OP’s letter dated 10.12.2014 for “availing the option of termination of the policy by the insured”. The officer of the OP did not note the fact that the insured has already expired and the Complainant herein has lodged the claim for release of death benefits.

The Complainant has replied to the email of the OP on 08.01.2015 again informing about the death of insured and lodging the claim for release of death benefit. This email was replied by the OP on 14.01.2015 informing that as the policy was already terminated, the policy claim could not be processed. A formal communication dated 12.01.2015 was also sent by post to the Complainant by the OP by which it was informed that as the policy was terminated on 10^th September, 2014 due to fall in fund value below one annual premium and refund check has already been dispatched on 19^th September 2014, the “request for premium” cannot be processed after death of the insured. This is again surprising that the official of the OP considered the claim of the death benefit as “request for refund of premium”. Identical letter was again sent to the Complainant by the OP on 19.01.2015.

Thereafter, the Complainant filed this complaint. After our notice, the OP has filed its reply. Surprisingly, OP has denied every allegations of the complaint but in support of its averments, OP has not filed a single document. Even at the time of filing evidence, OP did not file any document. It is also very surprising that the OP has even denied its own letters. One such example is in para 15 at 9 of the reply, in which the OP has categorically denied writing the letter dated 10.12.2014 and their own emails dated 08.01.2015 and 14.01.2015. Similarly, in para 5 at page 5 of the reply, the OP has also denied the policy premium payment acknowledgment mail dated 08.02.2014. While denying their own emails, the OP has not filed any documents in support of their averments. If it is accepted that the Policy holder did not pay the policy premium regularly, the OP should have placed on record the complete account statement indicating the status of payment of premiums. But the OP has not filed any document in support of its averments. It appears that the reply was prepared and filed by the OP in a mechanical manner without any application of mind.

Parties have filed their respective affidavits of evidence and written arguments. Thereafter, this matter was taken up for final arguments.

The arguments of the Complainant is of two folds- first that the termination of policy on 10.09.2014 (communicated on 17.09.2014) was wrong and without valid reason and second that the OP failed to fulfil its commitments with respect to releasing the insured value to the Complainant after death of the insured as guaranteed by the terms and conditions of the policy.

On behalf of the OP it is argued that as the policy was in lapse status and was not revived within the revival period of 2 years, the policy was terminated before the death of the insured and for that reason the death benefits could not be granted to the nominee of the insured, i.e. the Complainant herein.

We have perused the documents and pleadings of the parties. It is a fact that the policy premium was being paid half yearly since its inception in August 2010. In absence of any document indicating non- payment of premiums, it is assumed that the policy premium was paid regularly till February 2014. This assumption is also based on the communication dated 10.12.2014, by which the OP has demanded the payment on only one outstanding premium Of Rs. 15,000/- falling due on 10.08.2014. As the OP has not sought payment of any other previous policy premium, it can be assumed that the previous policy premiums prior to 10.08.2014 were paid by the insured. In the Complaint too, the Complainant has also pleaded that premiums till February 2014 were paid in time and the policy premium due on 10.08.2014 could not be paid because of some technical problem on the payment gateway of the OP website. In this regard the communications were also made with the OP which finally culminated into this complaint.

In view of the above we conclude that the insured namely Late Smt. Seema Gupta made the payments of the premiums regularly since August 2010 to February 2014. Accordingly we also hold that the reason giving in the communication of the OP dated 17.09.2014 for termination of policy w.e.f. 10.09.2014, on account of lapsed status of policy and non-revival within the revival period of 2 years, is not correct.

The other reason for termination of policy viz “fund value after deducting surrender charge was falling below one annualised premium and policy status was policy discontinuance” appears to be incorrect in absence of any document showing the calculation of fund value of the policy as on 10.09.2014.

Condition 8 of the policy wordings indicate that the Insured may opt for discontinuation of the payment of policy premium after regular payment of premium for three years. In such an event, the policy can be terminated if the fund value falls below the annual policy premium. However the fund value was never communicated to the insured and the same was also not furnished before us by the OP. Further the “option of termination of policy” offered by the OP vide its letter dated 10.12.2014 suggests that the initial termination of policy w.e.f. 10.09.2014 was wrong and withdrawn by the OP. Although the letter dated 10.12.2014 does not explicitly state that the termination of policy w.e.f. 10.09.2014 has been withdrawn, but giving option of “termination of the policy” to the complainant, which was based on the “evaluation” by the OP, clearly indicates that the OP has withdrawn its earlier decision to terminate the policy w.e.f. 10.09.2014. As a result, the policy was in force in accordance with the terms and conditions of the policy. The policy terms and conditions clearly provides that once the payment of policy premium after initial three years is discontinued, the insured would get an option to get the policy revived after paying the revival charges and outstanding premium.

In the case in hand, in absence of any document to suggest that the fund value of the policy fell below the annualised premium and also in view of the letter dated 10.12.2014, we are of considered opinion that the policy in question was in force at least till 10.12.2014.

Once the policy was in force and during such period, when the policy was in force, the death benefits are to be released in favour of the nominee in accordance with the policy terms and conditions. In this context, relevant part of condition 8 is reproduced here:

“8. Discontinuing your premium

Discontinuing your premiums after three years from the commencement date

After you have paid all regular premiums due for at least three full policy years then you may discontinue premiums at any time without notice. In this event we will keep your life insurance, terminal illness and rider benefits in force for the full sum insured for a revival period of two years. During the revival period we will continue to deduct all applicable charges. At any time during the revival period you may pay all the outstanding premiums along with the revival charge and we will then reinstate your policy and riders in full, subject to the insure person meeting our then current underwriting requirements and limits.

If at the end of the revival period you have not paid all the outstanding regular premiums, we will terminate your policy and pay you the surrender value, unless you apply to us at that time to continue your policy. If we agree, subject to our then, current underwriting requirements and limits, we will continue to keep the policy and riders in force for the full sums insured, and to deduct all applicable charges.

…”

Condition 14 of the policy terms and conditions, which deals with death benefits, is also reproduced below:

“14. Death benefits

On the death of the insured person before the maturity date and while this policy remains in force we will pay you the greater of

• the sum insured, and
• the fund value on the date of valid notification of the death to us

and we will terminate the policy and any riders still in force at the time of death

…”

In view of the quoted terms and conditions, it is clear that the policy benefits continue to be in force for a period of two years since the discontinuance of the payment of premium after continuous payment of premium for initial three years. In the case in hand, the policy commenced on 10.08.2010 and the premiums were paid till February 2014, hence the policy terms and conditions for continuation of benefits of the policy during revival period of two years in accordance of condition 8 would remain in force till February 2016. As the insured person namely Late Smt Seema Gupta expired on 07.11.2014, the death benefits of policy would be payable to her nominee in accordance with condition 14 of the terms and conditions of the policy.

In view of the above, we are of the opinion that the termination of policy w.e.f. 10.09.2014 by the OP was not correct and by its letter dated 10.12.2014, such decision to terminate the policy was withdrawn by the OP. Accordingly the policy was in permissible revival period w.e.f. 10.08.2014 as the policy premium was not paid which was due on 10.08.2014. Further as the policy benefits are payable to the insured and the nominee during the permissible revival period of two year in accordance with condition 8, we are of the opinion that the death benefit is payable to the complainant herein, who is also the nominee of the insured namely Late Smt. Seema Gupta. The denial of payment of death benefits to the Complainant by the OP, therefore, is not correct.

Before parting, we would also like to record our displeasure on the approach adopted by the OP. The OP has made averments in their reply and the evidence affidavit, but has failed to file relevant and necessary documents before this Commission. The OP has taken this Commission for granted and has assumed that this Commission would blindly accept their contentions without any documents in support of their averments and pleadings. We strongly record our displeasure on this approach of the OP.

Accordingly, we pass following directions:

1. OP is directed to pay the insured value i.e. Rs. 14,00,000/- (Rupees Fourteen Lakh Only) to the Complainant and nominee namely Mr Akshay Garg, along with an interest @ 6% PA from the date of communication of death of the policy holder namely Late Smt. Seema Gupta by the Complainant i.e. 03.01.2015 within a period of four weeks from the date of receipt of this order.
2. OP is also directed to pay a sum of Rs. 1,50,000/- (Rupees One Lakh Fifty Thousand Only on account of compensation and litigation expenses within a period of four weeks from the date of receipt of this order.
3. If the payments so directed above is not made within the time so indicated, the OP shall be liable to pay interest @9% PA on the entire amount payable at the end of four weeks period after receipt of this order.
4. As the OP has not filed any documents in support of their averments made in their reply and evidence, we impose a cost of Rs. 50,000/- on the OP to be deposited in Consumer Welfare Fund as managed by Hon’ble Delhi State Consumer Disputes Redressal Commission within a period of four weeks from the date of receipt of this order and file compliance report to this Commission.
5. As the OP has not filed any documents in support of their averments made in their reply and evidence, we also direct that appropriate authority of the OP not below the rank of Vice President in the Company shall conduct an enquiry against the officials who signed the reply and evidence which were filed before this Commission and take appropriate action against such official including recovery of the cost so imposed by this Commission.

Office is directed to supply the copy of this order to the parties as per rules. Thereafter, file be consigned to the record room.

Ordered accordingly.

 

 

(Harpreet Kaur Charya) Member

(Divya Jyoti Jaipuriar) President