Consumer commission asks ICICI to pay Rs 2.25 lakh to doc
The Maharashtra State Consumer Commission has directed an insurance company to pay Rs2.25 lakh to a Mulund resident for arbitrarily cancelling his unit-linked insurance policy after seven years of its inception. Kanchan Chaudhari reports.mumbai Updated: Jun 23, 2012 00:34 IST
The Maharashtra State Consumer Commission has directed an insurance company to pay Rs2.25 lakh to a Mulund resident for arbitrarily cancelling his unit-linked insurance policy after seven years of its inception.
The consumer commission has also directed ICICI Prudential Life Insurance Company Ltd. to forthwith revive and reinstate the market-linked insurance plan availed by Dr Balasaheb Gaikwad in April 2002.
Gaikwad had been paying Rs5,000 per quarter towards premium of the insurance policy. However, in October 2009, the insurance company unilaterally cancelled the policy and refunded him an amount of Rs1.50lakh that he had paid towards premium till then.
Gaikwad approached the consumer commission contending the action on part of the insurance company was not only arbitrary and high-handed but also illegal and unfair.
The company, on the other hand, defended the complaint stating the doctor had consented to the extra premium on account of extra-mortality ratings. The company maintained, the amount eligible to be invested under the policy reduced to zero on account of mortality charges exceeding the premium, and therefore policy was cancelled since it had become unsustainable. The company’s counsel Anand Patwardhan also pointed out a clause in the policy which stated that the policy would be terminated if the Unit Value is found insufficient to pay mortality charges, and the action was based on consent of the complainant.
The consumer commission, however, noted that the clause required the company to issue three months prior notice to the policyholder before terminating the policy. “The opponent is not only deficient in rendering service, but it also amounts to unfair trade practice,” the consumer commission said. The commission then directed the insurer to pay the complainant Rs2lakh towards compensation and Rs25,000 towards cost of the litigation. It has also directed the company to revive the insurance policy on complainant paying the amount of Rs1.50lakh received from it as also the amount of premiums due for the period thereafter.