BEFORE THE DISTRICT CONSUMER DISPUTES REDRESSAL FORUM

VAZHUTHACAUD : THIRUVANANTHAPURAM

PRESENT

SHRI. G. SIVAPRASAD                              :         PRESIDENT

SMT. SATHI. R                                  :         MEMBER

SMT. LIJU B. NAIR                           :         MEMBER

                                    C.C.No:  20/2011          filed on 25/01/2011

                                             Dated: 15..01..2014

 

Complainants:

1. Preman Ritchie, S/o R.S. Miranda, resident of Meena Cottage, Murukumpuzha – P.O., Thiruvananthapuram.

2. Kavitha Preman, w/o Preman Ritchie     of    ..do..   ..do..

         (By Adv. Idicula Zachariah)

Opposite parties:

1. The Director,  Aviva Life Insurance Company India (P) Ltd., 2^nd Floor, Prakashdeep Building, 7 Tolstoy Marg, New Delhi – 110 001.

2. The Director, Aviva Life Insurance Company India (P) Ltd., Ashirwad Towers, Plot No.2 (Old No.182) 3^rd Floor, Kodambakkam High Road, Nungambakkam, Chennai – 600 034.

         (By Adv. A.G Syam Kumar)

This C.C having been heard on 30..12..2013, the Forum on 15..01..2014 delivered the following:

ORDER

SHRI. G. SIVAPRASAD, PRESIDENT:

         The facts leading to the filing of the complaint are that, 1^st and 2^nd complainants are husband and wife, that complainants had taken growth fund policies from the opposite parties, Aviva Life Insurance Company India (P) Ltd by paying the first year full premium, that company had issued receipts and policy certificates to the complainants, that complainants had paid a total premium amount of Rs. 4,20,000/- in the year 2007 vide policy No. LSP 1684888, RPG 1708888, LSP 1702948 & LSP 1658235, that the 1^st 3 policies are issued in the name of Preman Ritchie and last one is in the name of Kavitha Preman, but due to their financial difficulties they could not remit the subsequent premiums, that on elapse of 3 years complainants demanded the surrender value of the policies, but opposite party initially reluctant to pay any amount, that complainants  issued legal notice on 09/09/2010 and on accepting the legal notice, opposite parties remitted a total amount of Rs.87,092/- in connection with policy No. LSP 1684888 (Rs. 24,661/-), LSP 1702948 (Rs. 20,830/-) & LSP 1658235 (Rs. 41,601), that the amounts remitted were not to the tune of surrender value, that again complainants sent legal notice on 20/10/2010 to the opposite parties and demanded the balance amount towards the surrender values, but opposite parties did not reply to the same, that opposite parties are liable to pay the amount towards the surrender value after deducting 30% towards the surrender loss, that complainants are entitled to get Rs. 2,06,908/- from the opposite parties. Hence this complaint to direct opposite parties to pay Rs. 2,06,908/- towards surrender value of the policies to the complainants along with Rs. 50,000/- as compensation and Rs. 7,000/- as cost.

2. Opposite parties, on being served, entered appearance and filed version contending inter alia that complaint is barred by limitation, that complaint lacks cause of action, that complainants are at liberty and obligation to go through the terms and conditions of the policy on receipt of the policy documents, that complainants did not raise any objections regarding the policy either within the free look period of 15 days or within any reasonable time thereafter, that the contract of insurance attained finality, that after the expiry of free look period the policy terms and conditions permits surrender of the policy only after completion of 3 years, where surrender value as payable in accordance with the policy terms and conditions shall be payable on surrender of the policy, that refund of the  amount as paid as premium cannot be sought as the request for the same is made beyond the free look period of 15 days, that complainants having availed a Life Insurance Cover from the opposite party and enjoyed coverage for more than 3 years cannot be permitted at this belated stage to claim refund of the premiums paid contrary to the terms and conditions of the respective policies, that complainants are only entitled to the surrender value under the said  policies on account of the risk bore by the opposite parties associated with the policy for 3 years, that after duly deliberating and understanding all the terms and conditions of “Life Saver Plus” plan, complainants also filled and signed the proposal forms bearing No.NNU11311057 dated 28/09/2007 after duly deliberating on the terms and conditions of the “Pension Plus Unit Linked”plan in which proposed a premium amount of Rs. 1,20,000/- for a term of 19 years, that based on the declaration made and information provided in the proposal forms, the policies bearing No. LSP 1684888, RPG 1708888, LSP 1702948 & LSP 1658235 dispatched vide speed post to the complainant, that the said policies were due for premiums for the year 2008, however on account of non-payment of the premiums, the said policies went under early lapse status where risk cover along with rider benefit ceases and the policy holder can reinstate the said policy within two years of the due date of the first unpaid instalment of regular premium as per the terms and conditions of the policy, that as the request for cancellation was received after the free look period of 15 days from the date of receipt of the policy documents, the complainants are not entitled to any refund under the said policies, that during the stage the policy get terminated and the surrender value is paid to the policy holder as per the terms and conditions of the policy, that on change of the statuses of the said policies an amount of Rs. 87,092/- was paid as surrender value under policies bearing No. LSP1684888, LSP1702948 & LSP 1658235 respectively. Hence opposite parties prayed for dismissal of the complaint.

         3.The points that arise for consideration are:

         (i)Whether complaint is barred by limitation?

         (ii)Whether there is deficiency in service on the part of the opposite parties?

      (iii)Whether complainant is entitled to get any of the reliefs as prayed for?

         4.Points (i) to (iii): There is no dispute on the point that complainants availed 4 policies bearing No. LSP1684888, RPG 1708888, LSP 1702948 & LSP 1658235 of the opposite parties  Aviva Life Insurance Company India (P) Ltd. The premium of all the said policies except RPG 1708888 (bearing premium Rs.1,20,000/-) premium is Rs. 1,00,000/- each. There is no dispute on the point that complainants had remitted the first year full premium amount of Rs. 4,20,000/-. Admittedly, the said amount was remitted on different dates 27/09/2007, 30/09/2007 & 25/08/2007. It has been the case of the complainants that due to their financial difficulties they could not remit the subsequent premium. Admittedly, the policy terms and conditions permits surrender of the policy only after completion of 3 years. It has been the case of the complainants that on elapse of 3 years, the complainants demanded the surrender value of the policies, but initially opposite parties reluctant to pay any amount, that thereafter on issuance of legal notice to the opposite parties, opposite partis refunded an amount of Rs.87,092/- towards 3 policies except RPG 1708888. Opposite parties also admitted that they have paid Rs.87,092/- as surrender value under the said 3 policies. The date of refund of surrender value is not mentioned in the version or in the complaint, but it is stated in the complaint that they have claimed surrender value on elapse of 3 years (lock-in-period). As per the terms and conditions of the policies only after completion of 3 years from the date of issuance of policy can permit surrender of the policy. If that be so, we cannot afford to overlook the contentions of the complainants that on completion of 3 years complainants demanded the surrender value of the policies. Though initially opposite parties were reluctant to pay any amount, on issuance of legal notice on 09/09/2010, opposite partis remitted Rs. 87,092/- towards surrender value. Complainants further pleaded that they sent further notice on 20/10/2010 demanded the balance amount towards the surrender value of 3 policies and the entire surrender value of the policy RPG 1708888. It has been contended by the complainants that eventhough opposite partis accepted the said notices, they did not reply to the same. Hence this complaint. It is pertinent to point out that the terms and conditions of the policy permits surrender of the policy only after completion of 3 years. Complainants claimed surrender value after completion of 3 years. The amount refunded by the opposite parties is not satisfied by the complainants. Hence complainants approached this Forum on 25/01/2011 which is within two years after completion of the lock-in-period. Hence complaint is not barred by limitation. Complainant has claimed 70% of the premium amount after deducting 30% towards surrender loss. Complainant has led evidence by oral testimony of the 1^st complainant and Exts. P1 to P3. Ext. P1 series are the original premium receipts dated 27/09/2007 (Policy No. LSP1684888), 30/09/2007 (Policy No.RPG 1708888), 30/09/2007 (Policy No.LSP 1702948) and 25/08/2007 (Policy No. LSP1658235. Ext. P2 is the copy of advocate notice addressed to the opposite parties dated 20/10/2010 claiming refund of surrender value. Ext. P3 is the postal receipt. Opposite party has led evidence by way of proof affidavit and Exts. D1 to D8. Ext. D1 is the copy of the key feature document of life saver plus. Ext. D2 is the copies of the proposal forms filled and signed by complainants. Ext. D3 is the copy of the key feature of pension plus. Ext. D4 is the copy of the proposal form. Ext. D5 & D6 are the copies of the terms and conditions of pension plus unit linked policy and the life saver plus policy. Ext. D7 is the copy of the proof of delivery. Ext. D8 is the copy of the legal notice dated ‘Nil’ received on 25/10/2010. These policies are laid down by the IRDA guidelines. Admittedly, no refund of surrender value given to policy No. RPG1708888. The annual premium of the said policy is Rs. 1,20,000/-, for other 3 policies annual premium of each policy is Rs. 1,00,000/-. Each policy has risk coverage along with other benefits. As such complainants have provided 3 year risk coverage till the surrender of the policy. Out of the total premium collected a portion will be allotted to investment plan which would go to units linked plan. A portion will be used for insurance coverage. Since rider benefit is depending on the market fluctuation of the unit price, complainant cannot claim the entire amount remitted as surrender value. Herein complainant has claimed surrender value after deducting 30% of surrender loss. Opposite parties has not produced any document showing the mode of calculation of surrender value. Nothing is mentioned in the version also. Simply opposite parties have offered Rs. 87,092/- as surrender value. No surrender value is given to policy No. RPG 1708888. Taking the over all situation we are of the view that the claim of the complainants that they are entitled to get surrender value after deducting 30% towards surrender loss is reasonable and genuine. Non-payment of the said claim will definitely amount to deficiency in service. In view of the evidence available on record we are of the view that complainants are entitled to get 70% of the premium amount as surrender value. Complainants had received Rs. 87,092/- as surrender value for 3 policies. After adjusting the said refunded amount of Rs. 87092/- complainants are entitled to get Rs. 2,06,908/- as balance due after 30% surrender loss (which includes Rs. 84,000/- as surrender value of the policy RPG 1708888).

         In the result, complaint is allowed. Opposite parties are directed  to pay Rs. 2,06,908/- towards balance amount of surrender value to complainants. Out of the said amount Rs.28399/- is to be paid to 2^nd complainant and the balance amount is to be paid to 1^st complainant. Opposite parties shall also pay Rs.5,000/- as compensation to each complainant. Parties shall bear and suffer their respective costs.

         A copy of this order as per the statutory requirements be forwarded to the parties free of charge and thereafter the file be consigned to the record room.

Dictated to the Confidential Assistant, transcribed by her, corrected by me and pronounced in the Open Forum, this the 15^th day of January 2014.

 

          Sd/-  G. SIVAPRASAD            :         PRESIDENT

Sd/-  R. SATHI                          :         MEMBER

Ad.                                   Sd/-  LIJU B. NAIR                  :         MEMBER

C.C.No: 20/2011

APPENDIX

 I. Complainants’ documents:

P1 series      :  Original premium receipts dated 27/09/07, 30/09/07,        30/09/07 & 25/08/07 issued by opposite parties(4 Nos.)

P2                :  Copy of Advocate notice dated 20/10/2010

P3                :  Postal receipts (2 nos.)

II. Complainants’ witness                    :         N I L

III. Opposite parties’ documents:

          D1     :  Copy of the key feature document of life saver plus

          D2     :  Copy of proposal forms

          D3     :  Copy of the key feature of pension plus

          D4     :  Copy of the proposal form

D5 & D6     :  Copies of the terms and conditions of pension plus unit linked    policy and life saver plus policy

          D7     :  Copy of proof of delivery

          D8     :  Copy of the legal notice dated ‘Nil’ received on 25/10/10

IV. Opposite parties’ witness     :         N I L

                                                                                                                    Sd/-

PRESIDENT

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