I get a number of mails from readers who have been tricked by authorised insurance agents into buying policies that are in no way meant for them. There are also complaints of agents making all kinds of false promises and enticing consumers into buying policies. Such practices are highly condemnable, besides the fact that they violate several regulations drawn up by the Insurance Regulatory and Development Authority. They also constitute unfair trade practice under the Consumer Protection Act. Yet, such violations continue and the worst part is that insurers often say that they cannot take responsibility for the actions of their agents.
Well, here's an interesting recent order of the apex consumer court — the National Consumer Disputes Redressal Commission — wherein, such a plea of the insurer has been rejected. This order has its origin in the Life Time Super Pension Policy bought by Gurmeet Singh in 2008 through an authorised agent of the insurance company.
The next year, when the annual premium of R25,000 was due, the agent dissuaded the policy holder from issuing an account payee cheque on the ground that it would delay the payment. He, therefore, got him to sign a 'self' cheque for the amount, saying that he would draw cash and make the payment immediately.
Since he was an authorised agent and had sold him the policy, the consumer saw no reason to distrust him. The agent, however, withdrew the money, but never gave it to the insurance company.
Since the insurance company refused to renew the policy on the ground that it had not received the money, Gurmeet Singh sought the intervention of the consumer court, which directed the agent as well as the insurance company to issue an official receipt for R25,000 paid by the consumer towards the yearly premium, regularise the policy and permit Singh to pay the next installment of R25,000 towards the premium for 2010. It also directed that the consumer be paid a compensation of R10,000 and costs of R5,000. (ICICI Prudential Life Insurance Company Ltd Vs Gurmeet Singh, RP No 1059 of 2011, decided on September 1, 2011).
Vinay Sareen: I purchased a cash flow plan from a life insurance company on August 12, 2011, with R20,000 as the annual premium. At the time of selling the policy, the agent said that the policy lock in period was 7 years and the policy was for 22 years. He also told me that after getting the first document, I will receive a second document in which I will get 50% off on the second year's premium, besides, health insurance for the entire family and a gift — a refrigerator. I have received only the first document. Three months have gone by, but I am yet to get the second document. The agent's phone is always switched off and the insurance company says that they have no control over their agents. I want to cancel my policy but they say that the free look period is over.
Answer: The insurance company has to take responsibility for misselling of the policy. Lodge a formal complaint with the insurance company. You can do this online by logging on to www.igms.irda.gov.in. From here, you can access the grievance redress mechanism of the insurer too. If you fail to get any response from the insurance company within a fortnight, register your complaint with the regulator, giving specific details, on the same website.