Udupi, July 15, 2019: Ravindranath Shanbhag, president of Human Rights Protection Foundation (HRPF), has said that the Karnataka State Consumer Disputes Redressal Commission had recently heard a complaint filed by HRPF against LIC of India for deficiency in service.
Addressing presspersons here, Dr. Shanbhag said that the commission found that it was a fit case for admission and accordingly passed orders to issue a notice to LIC to submit objection, if any.
The matter is posted for submission of objections by LIC on July 31, 2019.
The HRPF had been struggling for the last two years to protect anganwadi teachers and poor farmers of Chikkamagaluru district, who had been duped by agents appointed by LIC.
In 2009, to extend the scope of insurance cover to economically weaker sections, LIC floated Jeevan Madhura micro insurance product, which ranges from 5 to 15 years, with ₹ 50,000 maximum sum assured.
Unlike the conventional insurance process, in micro insurance product, a middleman (the Micro Insurance Agency) was to be appointed under special agreement between the insurer LIC and NGO as MI agency, authorised by LIC, to gather insurance and collect regular premiums from policy holders.
The policy holders, thus, were compelled to pay premiums to the MI agency authorised by LIC. On behalf of LIC, the MI agents propagated the benefits of MI and garnered huge business in the rural areas of Chikkamagaluru district.
Thereafter, as prescribed by LIC, the premiums were collected by the sub-agents from the policy holders and handed over to the MI agents that is, to the NGO. As per the policy terms, the policy holders were entitled to the refund of the entire premiums paid along with the accrued benefits/sum assured in case of death contingency. However, in 2014 when an insurance claim (in view of death of the policy holder) was made before LIC, an astonishing fact came to light that the MI policy had lapsed and hence, the claim could not be allowed. On hearing this, the policy holders started enquiring thoroughly, which revealed that the collected premiums were not at all remitted to LIC.
Policy holders suspected sub-agents of misappropriating the collected premiums. The policy holders approached the MI agents, sub-agents and local LIC office to sort out the issue of refund of their premium amount along with the accrued benefits, but to no avail. They then approached the HRPF, Dr. Shanbhag said.