Case Title : Lakshmy T Iyengar vs Max New York Life Insurance Company Limited and others.
Summary
The Bangalore Urban II Additional District Consumer Disputes Redressal Commission (Karnataka) found Max New York Life Insurance Company Limited responsible for the Complainant’s repeated requests for premium payments, despite the insurance company’s repeated errors in entering the wrong account number. The insurance company had given Mrs. Lakshmy T. Iyengar a policy, which required monthly premium payments of Rs. 1,006.56. The Complainant had arranged for her bank to automatically take the premiums from her account through an Electronic Clearing Service (ECS). The insurance company maintained that the amount was not paid, despite assurances that similar errors would not occur again. The District Commission ordered the insurance company to compensate the Complainant with Rs 10,000/- and reimburse the complaint for Rs. 5,000 as litigation expenses.
About the case
The Bangalore Urban II Additional District Consumer Disputes Redressal Commission (Karnataka) bench, which is made up of members Sri B. Devaraju, Smt. V. Anuradha, and President Vijaykumar M. Pawale, determined that Max New York Life Insurance Company Limited was at fault for the Complainant’s repeated requests for premium payments, despite the insurance company’s repeated errors in entering the wrong account number.
The Max New York Life Insurance Company (“Insurance Company”) had given Mrs. Lakshmy T. Iyengar (“Complainant”) a policy. Starting on October 6, 2004, the policy’s provisions required monthly premium payments of Rs. 1,006.56. The complainant had arranged for her bank to automatically take the monthly premiums from her account, which had enough money in it to meet the payments, through an Electronic Clearing Service (ECS) arrangement.
On February 7, 2008, the insurance company notified the Complainant that the insurance premium was past due and overdue, which raised an issue. Even though ECS was used to deduct the premiums, the insurance company maintained that the amount was not paid. Upon reaching out to the insurance business, the Complainant was notified that the error happened due to the insurance firm entering the incorrect account number twice for the premium deductions. The complainant received assurances that similar errors would not occur again.
In spite of these guarantees, the insurance company notified the Complainant once more on October 6, 2009, that her insurance policy had lapsed as a result of non-payment of the premium. The Complainant tried to resolve the issue by getting in touch with the insurance agent she had bought the policy from, but the company persisted in demanding the January 2008 premium even though they had already issued an apology. The complaint and her family suffered greatly as a result of the constant calls from the call center of the insurance company for payment of insurance premiums as though she were in arrears. The Additional District Consumer Disputes Redressal Commission-II, Bengaluru Urban, Karnataka (“District Commission”) received a consumer complaint from the aggrieved party.
The insurance firm said that by falsifying pertinent information in order to obtain unlawful profit, the complaint was submitted with a hidden agenda. They declared that the premium deductions bounced twice and flatly refuted the complaints raised by the complainant. They also refused to accept responsibility for their error.
The District Commission observed that the bouncing of premiums was caused by the insurance company’s careless entry of the incorrect account number for the ECS. The District Commission concluded after reviewing the Complainant’s evidence that the insurance company was ultimately responsible for the difficulty that the Complainant and her family experienced. The District Commission ordered the insurance firm to compensate the complaint with Rs 10,000/-after deeming the company to have provided inadequate service. In addition, it mandated that the insurance provider reimburse the complaint for Rs. 5,000 as litigation expenses.
