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

=============

Sawraj Singh Bedi, R/o H.No.424, Phase 3A, SAS Nagar, Mohali.

                   --- Complainant

V E R S U S

1.       ICICI Prudential Life Insurance Co. Limited, Registered Office: ICICI PruLife Towers, 1089, Appasaheb Marathe Marg Prabhadevi, Mumbai – 400 025, through its Managing Director/ Chairman.

2.       ICICI Prudential Life Insurance Co. Limited, Vinod Silk Milk compound Chakravarty, Ashok Nagar Ashok Road, Kandivali East, Mumbai – 400 101, through its Executive Director Mr. Madhivanan Balakrishnan.

3.       ICICI Prudential Life Insurance Co. Limited, SCO No. 137-138, 1^st Floor, Sector 9, Chandigarh, through its Manager.

4.       SMS Insurance Broker Pvt. Limited, Advisor/ Broker/ Corporate Agent ICICI Prudential Life Insurance Co. Limited, through its Managing Director/ Chairman, Netaji Subash Nagar, Daryaganj, New Delhi – 110002.

---- Opposite Parties.

BEFORE:      MRS. MADHU MUTNEJA                      PRESIDING MEMBER

                   SH.JASWINDER SINGH SIDHU             MEMBER

Argued By:             Sh. Mashwinder Singh, Counsel for Complainant.

Sh. Gaurav Bhardwaj, Counsel for Opposite Parties No.1 to 3.

Opposite Party No.4 ex-parte.

PER JASWINDER SINGH SIDHU, MEMBER

1.                Briefly stated, in the month of April 2011, at the instance of one Mr. Bhargav, the Complainant had purchased a policy of ICICI Prudential Life Insurance Company Ltd. by paying a premium of Rs.50,000/- (copy of Policy Annexure C-1).  After two, again on the asking of aforesaid Mr. Bhargav, the Complainant purchased another policy of Kotak Life Insurance by paying a premium of Rs.20,000/- (copy of Policy Annexure C-2). It is asserted that the said Mr. Bhargav assured the Complainant that both the aforesaid plans are one time premium plans and the Complainant need not to pay any further amount and that the Complainant would get Rs.90,000/- and Rs.33,000/- against the above policies after one year. However, later on, on coming to know that the term of both the policies are 15 years and 10 years respectively, the Complainant sent letters to the Opposite Parties for discontinuation and cancellation of the above said Policy of OP-Company on 24.11.2011 and 30.12.2011, to which no reply was ever received (Annexure C-3 & C-4). Eventually, a legal notice dated 14.03.2012 (Annexure C-7) was also served upon the Opposite Parties, to which an evasive reply was given. The Complainant claims that receiving Rs.50,000/- for above said plan by the Opposite Parties and forcing him to continue the plan for 15 years, without his consent, amounts to deficiency in service and unfair trade practice. Hence. The present complaint. 

2.                Notice of the complaint was sent to Opposite Parties seeking their version of the case.  Despite service, nobody has appeared on behalf of Opposite Party No.4; therefore, it was proceeded against exparte on 06.11.2012.

3.                Opposite Parties No.1 to 3 in their joint reply, while contesting the claim of the Complainant have pleaded that the Opposite Parties issued the policy as per the clear instructions of the Complainant in the proposal form. Further, the Complainant has signed the proposal form which clearly shows that he was aware of the features and the nature of policy being taken by him. It is submitted that the payment premium term is 07 years and not 15 years as alleged. A welcome call on behalf of the company was made for the subject policy in the month of April, 2011, thereby explaining the terms & conditions of the policy and that the subject policy was a regular premium policy whereby the Complainant was required to make annual payment of premiums for a period of 07 years.  It is denied that the answering Opposite Parties ever received letters dated 24.11.2011 and 30.12.2011. While admitting receipt of legal notice, it is submitted that the same was duly replied vide letter dated 28.03.2012. Denying all other allegations and stating that there is no deficiency in service or unfair trade practice on their part, answering Opposite Parties have prayed for dismissal of the complaint.  

4.                Parties were permitted to place their respective evidence on record in support of their contentions.

5.                We have heard the learned proxy counsel for the contesting Parties and have perused the record.

6.                The Complainant through his present complaint has claimed that while subscribing for the insurance policy of the Opposite Party had paid Rs.50,000/- as its 1^st premium and a Policy bearing the name of ICICI Pru Guaranteed Savings Insurance Plan was issued on 21.04.2011. The said policy was to mature on 21.04.2026 and the premium paying term was for 07 years. The policy term was for 15 years. The sum assured was Rs.3,45,800/-. The Complainant after a gap of nearly 07 months requested the Opposite Party to cancel the policy and refund him the premium amount by writing two letters dated 24.11.2011 and 31.12.2011. The Opposite Parties have denied receipt of these communications.  The Complainant has attached the postal receipts as Annexure C-5 & C-6 as proof of dispatch of these communications. It is also important to mention here that the Complainant failed to quote the exact date of receipt of these policies, so as to enable us to treat his communication dated 24.11.2011 to be within the free look period of fifteen days.  Hence, the Opposite Parties cannot be held to have acted in a wrong manner, while not discontinuing his policy, on a request, which was not made within a free look period.  Though the Complainant has levelled many allegations against the officials of the Opposite Parties, but he has not adduced any evidence to prove his allegations.

7.                It would not be out of place to mention here that the Opposite Parties while entertaining the proposal form for the issuance of the policy and having accepted Rs.50,000/- as premium amount, which was to be continuously paid for 07 years, the Opposite Parties did not satisfy us that they have followed the KYC (Know Your Customer) Guidelines, as well as AML (Anti Money Laundering) Guidelines which was mandatory as per the Insurance Regulatory & Development Authority.

8.                The Complainant having disclosed that he is a pensioner and was getting a pension of Rs.9500/- per month only, it was incumbent upon the Opposite Parties to consider the proposal form for the issuance of the policy, after taking into consideration the last three income tax returns of the Complainant, so as to ascertain that the Complainant was in a capacity to pay Rs.50,000/- of annual premium continuously for the next seven years.  Hence, this act of Opposite Parties of not adhering to the mandatory IRDA Guidelines is an act of deficient services.   

9.                Furthermore, it is also noticed that the Complainant has preferred the present complaint on 06.09.2012, and had also not paid the 2^nd premium, which was due in the month of April, 2012. Hence, when the present complaint was preferred against the Opposite Parties, the said policy was already lying in a discontinued mode and in a situation, the Opposite Parties were bound to refund the premium as per Insurance Regulatory and Development Authority (Treatment of Discontinued Linked Insurance Policies) Regulations, 2010, as notified vide notification dated 1.7.2010,  Regulation 7 of which reads as under:-

“ Obligation of an insurer upon discontinuation of a policy

7.   The obligation of an 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 ceiling on commissions and        expenses and

v.   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:-

 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.”

                   Hence, the act of the Opposite Parties in not treating the case of the Complainant as per the Regulation 7 ibid, amounts to deficiency in service.

10.              In the light of above observations, we are of the concerted view that the Opposite Parties are found deficient in giving proper service to the complainant. Hence, the present complaint of the Complainant deserves to succeed against the Opposite Parties, and the same is allowed, qua them. The Opposite Parties are directed to:-

[a]    To pay the claim amount of Rs.50,000/- - Rs.3,000/- = Rs.47,000/- to the Complainant, as per above mentioned Regulation 7;

[b]    To pay Rs.10,000/-on account of deficiency in service and causing mental and physical harassment to the Complainant; 

[C]    To pay Rs.7,000/- as cost of litigation;

11.              The above said order shall be complied within 45 days of its receipt by the Opposite Parties; thereafter, they shall be liable for an interest @18% per annum on the amount mentioned in per sub-para [a] & [b] of para 10 above, apart from cost of litigation of Rs.7,000/-, from the date of institution of this complaint, till it is paid.  

12.              Certified copy of this order be communicated to the parties, free of charge. After compliance file be consigned to record room.

Announced

14^th June, 2013. 

Sd/-

(MADHU MUTNEJA)

PRESIDING MEMBER

Sd/-

(JASWINDER SINGH SIDHU)

MEMBER