One of India’s leading life insurer, ICICI Prudential Life Insurance Company has been directed by The Maharashtra State Consumer Commission to pay Rs 2.25 lakh in compensation to a Mumbai-based complainant Dr. Balasaheb Gaikwad. The Commission has also asked ICICI Prudential to reinstate the policy.
Dr. Gaikwad availed a ULIP policy named ICICI Pru Life Time in 2002 for a premium paying term of seven years. He paid quarterly premium instalments of Rs.5,000 totalling to an amount of Rs.1,50,000.
In 2009, ICICI Pru sent a letter to the complainant mentioning that the policy has been terminated post speaking to him. The company wrote that due to a technical error, the premium amount calculated was less than the applicable mortality charges and because of this the policy value had reduced to zero. Therefore, due to non-sustainability of the policy, the company had decided to cancel the policy and refund all the premiums paid under the policy. ICICI Pru cited a clause in the policy which stated that the policy would be terminated if the Unit Value is found insufficient to pay mortality charges.
Dr. Gaikwad said that he had not spoken to anyone in ICICI Prudential and he wanted to reinstate the policy. But the insurer refused to do so unless the differential amount of premiums was paid by the policyholder. The Commission refused to accept the ground on which the insurance company had terminated the policy and asked them to reinstate the policy as soon as Dr. Gaikwad paid them back the money which was refunded to him. Moreover, the state commission expressed its dissatisfaction on the insurer’s act of terminating the policy without issuing any notice. It also stated that the error was as a substantial error on part of the life insurance company for which the policyholder shall not be penalised.
