Sri. Jai Prakash Agarwal
V/s
M/s ICICI Prudential Life Insurance Co.Ltd
Brief Facts of the Case: Mr. Jai Prakash Agarwal filed a complaint that M/s ICICI Prudential Life hard unilaterally foreclosed his ULIP policy without any prior intimation. The complainant stated that in case he was informed in advance, he would have remitted the premiums due immediately.
On the other hand, the insurer contends that since the fund value fell down to less than 110% of the annual premium, the policy has been automatically terminated as per the policy terms and conditions as per clause 2.2. Since the complainant’s appeal for a review of the decision has been rejected by the Customer Relations Officer of the insurer he approached this forum with a complaint.
Cause of Complaint:
a) Complaint: In his complaint letter dated 09.11.2017, the complainant submitted that he had taken Premier Life Gold (ULIP) policy from ICICI Prudential Life for a coverage of Rs.1.3 Crores for 19 years term and 3 years premium paying term. After payment of the first premium, the complainant exercised the option for reduction of premium amount to Rs.100000/- under the policy provisions. Thereafter, the complainant paid the premiums for the next two years of the premium paying term of three years at the revised rate of Rs.100000/-. Thereafter there was no communication from the insurer pertaining to the policy, except the normal account statements. But suddenly the complainant received a letter from the insurer on 18.07.2017 stating that a cheque for Rs.93791.85 had been attached towards the final foreclosure payout as per the policy terms. When the complainant raised a query, the insurer informed by mail dt.30.09.2017 that the said policy got foreclosed as the fund value fell below 110% of annual premium due to non-payment of all premiums due since 2011. The complainant contends that the question of discontinuation of premiums does not arise since he had paid all premiums for the premium paying term of three years.
As a similar response was received on appeal to the Complaint Redressal Officer, Corporate Office of the insurer, he approached this forum for a Redressal of his grievance.
b) Insurer’s argument: In its self contained note dated 22.11.2017, the insurer. submitted that on receipt of duly filled and signed application form the complainant, Policy No.08155221 has been issued on 15.03.2008 under Premium Life Gold Plan.
The policy document is delivered to the address of the complainant on 24.03.2008 via Blue Dart Courier AWB No.44107419683. But the complainant never approached the company with any discrepancy in the policy within the mandatory 15 days free look period.
The complainant approached the company on 15.03.2009 with a request to decrease the premium to Rs. 100000/- and it was processed by them. Afterwards the complainant paid the yearly renewal premium for March, 2009 and March, 2010 by way of Cheque and he had also done online fund `switchover’ on 20.02.2013. The insurer submits that it is therefore evident that the complainant is well aware of the policy terms and conditions. It is clearly stated under clause 9 of policy terms and conditions that if premium has been paid for three full policy years and after three policy years have elapsed and the fund value across all funds under the policy falls below 110% of one full year’s premium, the policy shall he terminated by paying the Fund Value after applying surrender charges if applicable as per clause 2.2 of the policy terms and conditions.
Accordingly the insurer stated that the refund of the foreclosure amount of Rs.93,791.85 had been processed as per the policy terms and conditions. The insurer denied the complainant’s contention that the policy had been mis-sold to him without disclosing the policy charges and pleaded for dismissal of the complaint by this forum as the allegations made by the complainant are baseless.
Reason for Registration of Complaint: – Scope of the Insurance Ombudsman Rules-2017: Any partial or total repudiation of claims by the life insurer, general insurer or the health insurer.
The following documents were placed for perusal.
a) SCN dt.22.11.2017
b) Complaint letter dated 09.11.2017
c) Foreclosure letter dt.18.07.2017.
d) Copies of Policy Schedule & Proposal.
Result of hearing with both parties (Observations & Conclusion) :
Pursuant to the notices issued by this office, both the parties attended the hearing held at Hyderabad on 8.8.2018 and 28.8.2018.
Complainant has reiterated that he has taken ICICI Prudential Life coverage for Rs.1.3 Crores for 19 years term and 3 years premium paying term in 2008. After payment of the first premium Rs. 10,50,000, he exercised the option to reduce the premium to Rs. 1 lakh for next two years. He had received a letter from the insurer on 18.07.2017 after 9 years stating that a cheque for Rs.93791.85 is final foreclosure (termination) payout. The letter also contained that “if you wish to revive your policy, you can’ return this cheque and pay your due premium by visiting the nearest ICICI Prudential life insurance branch. But when he had taken up the matter with concern for revival no satisfactory reply was furnished to him. So he approached this forum for a Redressal of his grievance.
Insurer reiterated that it is clearly stated under clause 9 of policy terms and conditions that if premium has been paid for three full policy years and after three policy years have elapsed and the fund value across all funds under the policy falls below 110% of one full year’s premium, the policy shall be terminated by paying the Fund Value after applying surrender charges if applicable as per clause 2.2 of the policy terms and conditions. Accordingly the insurer stated that, the refund of the foreclosure amount of Rs.93791.85 had been processed as per the policy terms and conditions and Policy cannot be revived after foreclosure.
The forum is of the opinion that the need for revision of the life cover when premium was reduced was never explained to insured. Had the insured been told about it by the insurer the insured would have modified the life cover accordingly. Since he was not apprised of the consequences and kept in dark, the forum feels that this is a grave mistake on the part of the insurer. No sensible person would invest Rs.12.5 lakhs for 9 years to receive Rs.93791.85. The Forum also feels that great injustice has been done to insured by not explaining the provisions and rules as and when required. This has caused huge financial loss to the insured which needs to be compensated. Hence the forum directs the insurer to return the amount paid by the insured along with interest @8.25% on the actual premium paid.
Hence the complaint is allowed.
AWARD
Taking into account the facts & circumstances of the case and the submissions made by the insurer, the insurer is directed to refund the premium paid with interest.
In result, the complaint is allowed.
