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Crores of rupees not paid to LIC by agencies around Udupi

Crores of rupees not paid to LIC by agencies around Udupi


Mangalore Today News Network

Oct 25, 2016: Reports speak of Micro insurance agencies in UCrores of rupees not paid to LIC by agencies around Udupi

Reports speak of Micro insurance agencies in Udupi division appointed by the LIC have put hundreds of its sub-agents into difficulty by not paying the premium amounting to crores of rupees, Human Rights Foundation, Udupi, president Dr Ravindranath Shanbhag has charged.

He said they have received complaints from some specific persons regarding improper implementation of Jeevan Madhur scheme. The foundation, along with Basrur Consumer Forum, found names of thousands of micro insurance (MI) policy holders dropped from the scheme by LIC, for reportedly not paying premium. In most of the lapsed policies, the records showed only one or two instalments of premium paid while some claims were rejected for this reason. It was also found that every policy holder, whose policy was lapsed, had receipts for payment of premium all these years. Further, all these receipts carried LIC’s official logo, claimed Shanbhag.

He added that three NGOs - M/S Samanvaya Health, Education and Rural Development Society, Tiptur, Sri Makkanneswari Yuvathimandali, Arasikere and Shobhodaya Health and Rural Development Society, Chikkamagaluru - were the MI agents appointed by the LIC. They had appointed sub-agents with LICs approval to collect money from policy holders. Prima facie, it is observed that the sub-agents collected the premium and recorded it in the "Deed of Agreement". They handed over the collection to the respective MI agents as prescribed by the LIC.

The system continued till some MI claims were rejected saying that the policies had lapsed due to non-payment of premium. Both policy holders and sub-agents were shocked. Primary investigations show that the cash handed over to the MI agent by sub-agents was not given to the LIC and DDs were adjusted to some other policies defrauding the LIC, sub-agents and policyholders as well. As a result, 57,873 out of the 5,80,86 policies (99.63%) had lapsed, he explained.

Shanbhag said most policy holders were illiterate villagers and suspected sub-agents of pocketing the premium amount. The sub-agents, who are mostly anganwadi teachers, are unable to face the public, for fear of being manhandled and beaten by irate mobs. Most of them were forced to refund to the policy holders from Rs 1 lakh to Rs 3 lakh, to remain in the villages. Some others have taken loan banks and pawn brokers by pledging jewellery to pay off policy holders. Some have even sold small pieces of land they owned. The financial crunch has driven most of them to disappointment and disgust in life. FIRs were filed at Arsikere and Chikkamagaluru police stations. It is believed that the MI agents have defamed the LIC and cheated policy holders at least to the extent of Rs.1.75 crore in Udupi division. Although LIC is not involved in the fraud, it has failed in supervising and monitoring its agents. This systemic failure has led to such a big fraud, he said.

One of the victims, Sumitra, said that she was misguided by the NGO. The only way is to end lives. Each sub-agent at least has to bear the burden of Rs 3 to 4 lakh, which is impossible, she added.dupi division appointed by the LIC have put hundreds of its sub-agents into difficulty by not paying the premium amounting to crores of rupees, Human Rights Foundation, Udupi, president Dr Ravindranath Shanbhag has charged.

He said they have received complaints from some specific persons regarding improper implementation of Jeevan Madhur scheme. The foundation, along with Basrur Consumer Forum, found names of thousands of micro insurance (MI) policy holders dropped from the scheme by LIC, for reportedly not paying premium. In most of the lapsed policies, the records showed only one or two instalments of premium paid while some claims were rejected for this reason. It was also found that every policy holder, whose policy was lapsed, had receipts for payment of premium all these years. Further, all these receipts carried LIC’s official logo, claimed Shanbhag.

He added that three NGOs - M/S Samanvaya Health, Education and Rural Development Society, Tiptur, Sri Makkanneswari Yuvathimandali, Arasikere and Shobhodaya Health and Rural Development Society, Chikkamagaluru - were the MI agents appointed by the LIC. They had appointed sub-agents with LICs approval to collect money from policy holders. Prima facie, it is observed that the sub-agents collected the premium and recorded it in the "Deed of Agreement". They handed over the collection to the respective MI agents as prescribed by the LIC.

The system continued till some MI claims were rejected saying that the policies had lapsed due to non-payment of premium. Both policy holders and sub-agents were shocked. Primary investigations show that the cash handed over to the MI agent by sub-agents was not given to the LIC and DDs were adjusted to some other policies defrauding the LIC, sub-agents and policyholders as well. As a result, 57,873 out of the 5,80,86 policies (99.63%) had lapsed, he explained.

Shanbhag said most policy holders were illiterate villagers and suspected sub-agents of pocketing the premium amount. The sub-agents, who are mostly anganwadi teachers, are unable to face the public, for fear of being manhandled and beaten by irate mobs. Most of them were forced to refund to the policy holders from Rs 1 lakh to Rs 3 lakh, to remain in the villages. Some others have taken loan banks and pawn brokers by pledging jewellery to pay off policy holders. Some have even sold small pieces of land they owned. The financial crunch has driven most of them to disappointment and disgust in life. FIRs were filed at Arsikere and Chikkamagaluru police stations. It is believed that the MI agents have defamed the LIC and cheated policy holders at least to the extent of Rs.1.75 crore in Udupi division. Although LIC is not involved in the fraud, it has failed in supervising and monitoring its agents. This systemic failure has led to such a big fraud, he said.

One of the victims, Sumitra, said that she was misguided by the NGO. The only way is to end lives. Each sub-agent at least has to bear the burden of Rs 3 to 4 lakh, which is impossible, she added.


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