The District Consumer Disputes Redressal Commission has penalised an insurance company for not refunding the balance amount to a 70-year-old retired Colonel, noting that company had misrepresented policy benefits.
The complainant, Colonel Yogesh K Sharma (retd) of Chandigarh, had filed the case against Aditya Birla Sun Life Insurance Company, Chandigarh, while a similar complaint had also been filed by his daughter Pooja Sharma against the company.
Yogesh said he had bought two policies, one for himself and one for his daughter Pooja Sharma in 2010 and paid three yearly premiums of ₹1 lakh each.
After completion of 10 years, he surrendered it with the insurance company and sought refund of Guaranteed Surrender Benefit. “The company instead of paying ₹3,64,473 being guaranteed surrender amount along with accumulated bachat additions as per the policy, remitted an amount of ₹2,40,748, which was ₹1,23,725 less on January 26, 2021,” he alleged.
Despite requests, the company did not pay any heed and he moved the complaint with commission.
The company pleaded that Yogesh paid a premium of ₹1 lakh for three consecutive years amounting inclusive of taxes, but did not pay further premiums as result of which the policy lapsed.
“He surrendered the policy in 2021 and the company has remitted ₹2,40,748 in favour of the complainant as per terms and conditions of the policy and nothing is due and payable,” the company stated while denying other allegations.
{{/usCountry}}“He surrendered the policy in 2021 and the company has remitted ₹2,40,748 in favour of the complainant as per terms and conditions of the policy and nothing is due and payable,” the company stated while denying other allegations.
{{/usCountry}}The commission, however, observed that the company’s agent has missold the policy to the complainant by misrepresenting its benefits that the policy does not have. So it is a clear-cut case of unfair trade practice conducted by the representative of the company to make a wrongful loss to the complainant and wrongful gains to the company.
“It is usual with the insurance company to show all types of green pastures to the customer at the time of selling insurance policies, and when it comes to payment of the insurance claim, they invent all sorts of excuses to deny the claim,” it observed, adding that similar facts have been pleaded in another connected complaint and similar evidence has been led in it.
“Therefore, in both the consumer complaints, deficiency in service as well as unfair trade practice on the part of the insurance company is proved,” the commission ordered.
It directed the insurance company to refund the balance deducted amount of ₹1,23,725 and ₹61,858 to the respective complainant(s) along with interest @9% from the date of surrendering the policy.
The insurer was also directed to pay ₹17,000 to each complainant on account of mental agony, physical harassment and litigation cost.