DISTRICT CONSUMER DISPUTES REDRESSAL FORUM,

PATIALA.

                                      Consumer Complaint No. 25 of 25.1.2016

                                      Decided on:                    28.3.2018

Mohinder Kaur aged about 76 years wife of Sh. Labh Singh Bhangu  son of Sh.Kehar Singh, resident of House No.749 Amardeep Colony, Patiala Road, Rajpura.

                                                                   …………...Complainant

                                      Versus

1. Managing Director M/s Birla Sun Life Insurance Company one India Bulls Centre Tower Ist Floor Jupitar Mills compound 841 Sena Pati BpatMarg, Elphinstore Road, Mumbai 400013.
2. Branch Manager Birla Sun Life Insurance Company Leela Bhawan, Patiala.

                                                                   …………Opposite Parties

                                      Complaint under Section 12 of the

                                      Consumer Protection Act, 1986.

QUORUM

                                      Smt. Neena Sandhu, President

                                      Smt. Neelam Gupta, Member                                       

ARGUED BY:

                                      Sh.Labh Singh Bhangu,Advocate, counsel for the

                                          complainant in person.

                                      Sh.Amit Kumar Bedi, Advocate, counsel

for opposite parties.

 ORDER

                                    SMT.NEENA SANDHU, PRESIDENT

Smt.Mohinder Kaur, complainant has filed this complaint under Section 12 of the Consumer Protection Act,1986 ( hereinafter referred to as the Act) against the Opposite Parties (hereinafter referred to as the O.Ps.)

2.                In brief, the case of the complainant is that she got himself insured with the OPs vide insurance policy No.001213428 for Rs.50000/-. The policy was issued by the OPs on 20.9.2007 alongwith the circular showing the way of ‘claim surrender value’ of the policy after every year, up to its maturity of 8 years. The complainant paid Rs.50,000/- in the year 2007-2008 in four installments as premiums and Rs.10,000/- in October,2008 and Rs.10,000/- in November/2009, as reduced premium as per policy norms. It is stated that as per the provisions of the policy, the consumer could get the surrender value of the insured amount after the lapse of three years without any deduction and the survival benefits were to be paid on the completion of the policy. It is stated that on maturity of the policy  on 19.9.2015, she approached the  branch manager of the OPs, who told that no survival benefits were to be paid. There is thus deficiency of service on the part of the OPs which caused mental agony and physical harassment to the complainant. Hence this complaint with prayer for giving directions to the OPs to pay the survival benefits of the insured amount of Rs.70,000/- alongwith interest @10% per annum  till realization.

3.       On being put to notice, OPs appeared through counsel and filed the written version. It is admitted that the complainant purchased the insurance policy from the OP, which  matured in the year 2015 and surrender value of the same amounting to Rs.32963.30 had already been given to the complainant vide cheque No.647594 dated 24.11.2015. However, it is stated that the document sent alongwith the policy was not the circular but was one page of illustrations. The complete illustrations were signed by the complainant at the time of signing the proposal form, wherein it has been mentioned that the investment risk in investment funds chosen by you were borne by you meaning thereby that if all the three installments would be paid by the life assured, the fund value could enhance after the completion of 8 years. There are no survival benefits under the terms and conditions of the policy. No amount on account of survival benefit was payable to the complainant. There is no deficiency of service on the part of the OPs.After denying all other averments made in the complaint, it was prayed to dismiss the complaint. 

4.       On being called to do so, the complainant has tendered in evidence Ex.CA her affidavit alongwith documents Exs.C1 toC10 and closed the evidence.

          The ld. counsel for the OPs has tendered in evidence Ex.OPA affidavit of Ms. Kshama Priyadarshini, Sr.Chief Manager(Legal) alongwith documents Exs.OP1 to OP6 and closed the evidence of the OPs.

5.       We have heard the  ld. counsel for the parties and have also gone through the record of the case, carefully.

6.       At the outset, the ld. counsel for the OPs has vehemently argued that the policy in question was matured in the year 2015 and as per policy conditions, the surrender value of Rs.32963.30, had been paid vide cheque No.647594 dated 24.11.2015 and no amount on account of survival benefits were payable to the complainant under the policy in question and prayed that the complaint may be dismissed with heavy costs.

7.       The ld. counsel for the complainant has argued that at the time of issuance of the policy in question, the OPs assured the complainant that she would get Expected Investment return @6% is 3.08% and @10% is 6.83% as is evident from Your Sales Illustrations Gold Plus, Ex.C3. But on maturity the OPs had paid only the surrender value amounting to Rs.32963.30 to the complainant. The OPs may be directed to pay the remaining amount, out of Rs.70,000/- alogwith interest.

8.             It may be stated here that all the insurance companies are governed by the guidelines and policies of the Insurance Regulatory And Development Authority (hereinafter referred to as IRDA). The surrender value calculated by the OPs was in contravention of the guidelines issued by the IRDA vide notification dated 16.2.2013.Under Regulation 15 of the said notification, the insurer is under obligation to pay the surrender value to the insured as per Regulation No.13(a)(vi) of the said notification, which reads as under:

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

1. For Annual Premiums

AP-Annualized Premium

FV- Fund Value

b.     Provided that where a policy is discontinued, only discontuned charge and fund management charge, which shall not exceed 50 bps per annum on discontinuance fund/policy account value, as applicable, may be levied by the insurer and no other charges by whatsoever name shall be levied.

c.      Provided that no discontinuance charges shall be imposed on top-ups premiums.

9.     In the present case, admittedly, the policy in question was issued in favour of the complainant on  20.9.2007 and  she paid a total sum of Rs.70000/-.From the receipt dated 15.9.2007, Ex.C4, receipt dated 12.2.2008, Ex.C5, receipt dated 24.4.2008,Ex.C6, receipt dated 26.7.2008,Ex.C7, it is evident that the complainant paid a total  sum of Rs.50000/- as first installment. From the receipt dated 24.10.2008, for Rs.10,000/- Ex.C8,  and receipt dated 4.11.2009 for Rs.10,000/-, Ex.C9,  it is evident that the complainant had paid Rs. 20,000/- as 2^nd and 3^rd installments. Since the policy was issued in the year 2007 and the prescribed lock- in- period of five years as per regulation No.11, of the above said notification dated 16.2.2013, has already been expired, therefore, as per regulation No.13(a)(vi) , referred above, the OPs are liable to pay the surrender value to the complainant  to the tune of Rs.66000/-  (Rs.70,000/- minus Rs.4000/-) as provided in the above quoted table .The OPs had already paid  Rs.32963.30 as surrender value. In this way the OPs are still liable to pay the balance amount of Rs.37037/- rounded off Rs.37000/- to the complainant.

10.     In view of the aforesaid discussion, we partly allow the complaint and direct the OPs  to pay the remaining surrender value of Rs.37037/- as calculated above, to the complainant alongwith interest @7% per annum w.e.f. 24.11.2015 i.e. the date on which the OPs paid the surrender value of Rs.32963.30 till realization .The OPs are also directed to pay Rs.5000/- as litigation cost, to the complainant. The said order be complied by the OPs, within a period of 45 days, from the date of the receipt of the certified copy of this order. Certified copies of this order be sent to the parties free of cost under the Rules. Thereafter file be indexed and consigned to the Record Room.

ANNOUNCED

DATED:-28.3.2018                                             NEENA SANDHU

                                                                                   PRESIDENT

                                                                             NEELAM GUPTA

                                                                                     MEMBER