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Udupi: The consumer court of Chikkamagalur district gave justice to the policy holders of LIC, Udupi region, where the premium amount was embezzled by its agents. “The Chikkamagalur Police headed by SP Annamalai have arrested LIC agent Devaraj and has sent him to judicial custody. Another accused Shobha Rani has obtained an anticipatory bail”, said Dr. Ravindranath Shanbhag, President, Human Rights Protection Foundation, Udupi.
Addressing the media during a press meet held at Vaikunta Baliga Law College, Kunjbettu here on November 16, Shanbhag said that some time around June-July 2016, some people from Kadur in Chikkamagalur approached the Human Rights Protection Foundation, Udupi for assistance in their problem. They had taken life insurance from LIC under the Jeevan Madhura Micro Insurance Scheme, and were suddenly dropped from the scheme for allegedly not paying their premiums.
An enquiry into the matter was conducted during a visit to Kadur and discussions with the sub agents and policy holders and members of the general public, helped bring the situation to light.
In most of the policy lapse cases, as per the LIC’s records, only one or two instalments of premiums were paid to the LIC. When they investigated further, they found that each of the policy holder, whose policy had lapsed, had the receipts of all the payments made over the last three years. The receipts even carried the LIC’s official logo on them.
Three NGOs, M/s Samanvaya Health, Education and Rural Development Society, Tiptur, Sri Mukkanneswari Yuvathimandali, Arasikere and Shubhodaya Health and Rural Development Society, Chikkamagalur, were the MI agents appointed by the LIC, who in turn appointed several sub agents.
They collected premiums in lakhs of rupees from the policy holders via their sub agents. All the cash and DDs were remitted to the MI agents by the sub agents on a timely basis as per the procedure prescribed by the LIC.
The operation ran smoothly till the MI claims started getting rejected and the policies started lapsing due to non payment. This came as a rude shock to the policy holders and the sub agents.
“From our investigations, we found out that the money that was transmitted to the MI agents, never made it to the LIC and the DDs were adjusted to some other policies, defrauding the policy holders, sub agents and the LIC”, said Shanbhag.
“Most of the policy holders were illiterate and innocent and they believed the sub agents were at fault. The sub agents were mostly Anganwadi teachers and agriculture labourers and they were scared to go out in public and lived in fear of being attacked by angry mobs. Some of the sub agents were forcibly made to refund the amount to the policy holders, which came up to around Rs 3 Lakh. They did this in order to be able to continue living in the villages”, he explained.
“It is unfortunate that the MI policy holders have lost faith in the LIC and that neither the agents nor the LIC came to their rescue. Faith and trust in the LIC needs to be restored at any cost, and we offer our full support for this cause”, he said.
He added that even though the LIC was not involved in defrauding the policy holders, they lacked in their duty of supervising and monitoring its agents.
He stated that after the documents were scrutinised, it was found that the agencies were appointed without conducting proper background checks and even after they had not made payments for three years, the LIC took no action against them.
A case was filed with the consumer court in the Chikkamagalur district and the court passed the order in favour of the policy holders after 16 months of proceedings. The court ordered the LIC to pay Rs 3,000 to each of the policy holders and the court costs of Rs 1,000 within a month of the date of the order.
It has been 25 days since the court passed its judgement but the policy holders are yet to see a single paisa of the payout they are due. They have written a letter to Prime Minister Narendra Modi and Finance Minister Arun Jaitley to direct the LIC to follow the court’s order.