Insurance
Life insurance fraud continues with impunity

Fraudulent life insurance is being sold with impunity, often using IRDA’s name. Intermediaries have neither been penalised nor have they lost their license. There is a need for stern action from IRDA and insurers to curb the menace. Will the regulator act?

Moneylife Foundation Insurance Helpline has been receiving increased number of complaints regarding fraudulent calls to sell insurance policy. The modus operandi has been to fool a gullible person by playing with their greed. The offers can range from bonus offer by Insurance Regulatory and Development Authority (IRDA), interest-free loan from Reliance Capital, Airtel mobile tower rent, call to surrender ULIP without loss, investing in initial public offerings (IPOs) of life insurance companies at attractive price, sharing of agent contest offer to sharing of commission given in form of gold, etc. The callers try to build trust by giving personal details of policyholders’ and their policies. Is your personal data freely available?
 

There are talks about such information being sold on CD/DVD in locations around Delhi. Imagine, a shady character getting hold of such data of different insurance companies and mis-using it to wreck you financially. Often, the trap is about making good of earlier bad investment by buying another insurance policy. The end result is that the customer is stuck with multiple policies from different insurance companies. Unfortunately, these products are regular premium policies with no option of single premium and hence, the customer is made to choose between a difficult decision to give up the one premium paid or to continue the premium payment each year for a crappy product.
 

One email to Moneylife stated that, “He told me he is a fund manager of IRDA (soft copy of the ID card send to me is attached)” The ID card was made to resemble an IRDA employee card. IRDA has told life insurance companies to warn their customers against falling prey to fictitious calls and false offers. The regulator has asked all insurers to highlight warning messages in their product advertisements on the same. Insurers have been asked to include the above messages, along with voice-over of this content in clear terms with every advertisement/commercial issued in electronic media (TV/cinema halls, etc). All ads/commercial issued from 1 February 2014, should contain this message. Those receiving such phone calls “are requested to lodge a police complaint along with details of phone call and number.”
 

But, instead of only putting the onus on the call recipient to make police complaints, will the regulator look at the actual cases of fraud and punish the guilty? After all, the fraudsters in most cases are not collecting the premium payment in cash. The customer will be alarmed if demand is made by cash payment. The payment is made by cheque and a valid policy is given to the customer who is told to wait for the lucrative promises made during the sale. After the “free-look” period is over, the fraudster stops taking the calls from the customer. The policy is logged under a valid corporate agent or broker. Obviously, there is a link between the fraudster (who may be operating as distance marketer, etc) and the corporate agent/broker. The insurance company, corporate agent and broker claim to be a victim, but why not track the link that made the policy sale possible? The truth is not hard to search.
 

Moneylife Foundation has been successful in getting Rs16.31 lakh refunded by Reliance Life for 27 customer fraudulently sold by its corporate agent AB Capital. Moneylife Foundation has written to IRDA at various senior levels in July 2013 and January 2014 about the issue, but there has been no response. Will IRDA be interested in details of the customers, policies that were fraudulently sold and punish the culprit? It will send a strong signal to ensure the life insurance companies severe ties with dubious corporate agents and insurance brokers. Will IRDA revoke license of corporate agents and insurance brokers who are clearly guilty? Today, consumers cannot even trust an insurance broker to act in the interest of the consumer, even though they represent the customer and not the insurance company.
 

Reliance Life had been proactive in quickly refunding premium for the cases taken up by Moneylife Foundation. After making over Rs16 lakh refund, Reliance Life has changed tactics. They call the policyholder and ask for proof. If there is voice recording of fraudulent promises or a fake document signed by customer regarding the “interest-free” loan offer, then Reliance Life promptly gives a refund. In other cases, it has started rejecting the refund request. How are these cases any different from the 27 customers who were promptly given refund? How many thousands are still out there who were fraudulently sold by its corporate agent AB Capital? Will IRDA investigate AB Capital and levy a hefty penalty? Moneylife Foundation will keep taking up the issues and fighting to ensure justice is given to all the aggrieved customers.
 

You may also want to read…
 

Fraudulent selling of life insurance– What are IRDA and insurers doing?
 

Reliance Life refunds Rs60,000 in a suspicious transaction: Another Moneylife success
 

Bharti AXA Life: Senior citizen sold policy with lure of rent from Airtel tower?
 

Reliance Life’s drive against fraud callers – Will it take action against its corporate agent AB Capital?
 

Is Reliance Life’s corporate agent AB Capital involved in fraudulent “interest-free loan” offers? Will Reliance or the regulators initiate action?
 

Reliance Life’s corporate agent AB Capital offers to help victims of fraudulent “interest-free loan”
 

Is Reliance offering 10-year interest-free loan for buying insurance?

User

COMMENTS

Vasuda Verma

2 years ago

Hi,

Misselling of RLI Policy with a false promise of returning the LIC premium paid for 6 years.

I have been duped by an RLI agent and mine is exactly the same case as mentioned in your article. I was told that if I buy a new RLI policy, my LIC premium amount will be refunded. I have the names, email addresss, and the phone number of the people involved. It's been one month since I bought this policy. My policy papers were also sent to my parent's address (even when I asked to send them to my current address to be able to read them) confirming that she is my relationship manager and can get the refund within 3 months. Request you to please help me get the refund.

Thanks!
[email protected]

Shri Gopal Soni

2 years ago

A culture of impunity is created when people in power break the law,
escape social or legal punishment, and then continue breaking the law.
Impunity allows the powerful to get away with it – to break existing
laws but also to exploit legal loopholes...
During 2010-2013 those in the Public Sector Undertaking (PSU) New
India Assurance company head office mumbai deliberately misread the
notice(s) of the Central Information Commission (with copy to
appellants ,e.g. the complainant) to attend video conference.
The complainant witnessed systematic loss of public money of approx. Rs. 10000/- to 25000/- per person to claim habitual ,uncalled for Delhi tour to embezzle public money ..

http://www.citehr.com/407111-right-infor...
https://twitter.com/revribhav

Dayananda Kamath k

2 years ago

even tata aig genral insurance also is the same. for enhancemnt of limit they issued new policy and i had 2 policies running simultaneously. matter brought to the notice of cmd of the company ombudsman irda but nobody is bothered. even now i receive telephone for renewing my policies.

manpreetsingh

2 years ago

Even I have been a victim of mis selling of policies from Bharti Axa and had written many time to them , but there has been no proper response. I had even tried to get in touch with higher officials to have alook where the name of company is getting spoil. But I believe they are equally involved in running and selling these kinds of polices through agents.

Its really sad that the TOP management has closed their eyes and are running their business at customers cost.

JR

3 years ago

INDIA HAS BECOME A COUNTRY OF ROGUES & RASCALS AT EVER LEVEL - FROM POLTICIANS TO PUBLIC & CORPORATES TO COPS!

NO CITIZEN CAN THINK OF A SINGLE THING THAT (S)HE CAN THINK OF & DO PEACEFULLY - WITHOUT HASSLES & HEADACHES!

MOST OF THE LARGE BUSINESSES & INDUSTRIES ARE ALSO AS CROOKED AS THE REST OF THE COUNTRY IS!

REAL ESTATE, INSURANCE, TELECOM, FINANCIAL SERVICES & MANY MANY! ON TOP OF ALL THIS, WE ARE SUPPOSED TO PAY A 'CHIDAMBARAM' - SERVICE TAX FOR (NON)/ROTTEN SERVICE YOU ALWAYS GET IN THIS COUNTRY!

CAN GOD SAVE INDIA? NO. UNLESS THERE IS A REVOLUTION OF THE KIND HAPPENING IN MANY OTHER PARTS OF THE WORLD, THIS COUNTRY IS DOOMED, UNLESS MODI COMES TO POWER & DOES A MIRACLE!

Dayananda Kamath k

3 years ago

i have filed a complaint with irda long back about insurance selling by banks and they have just forwarded it to reserve bank and they have kept quite on the same. it is conspiracy of all the regulators to fleece the public money under upa.

REPLY

nagesh kini

In Reply to Dayananda Kamath k 3 years ago

QED - IRDA acts as a glorified Post Master.
You might as well sent your comp-laint to the RBI Customer Services Department.
IRDA leads in Inter-Regulator spats - RBIand SEBI in the matter of MF instruments.
When it is itself involved in fighting fires of its own creation, where will it get time to deal with complaints filed by the aam janata?

Dayananda Kamath k

In Reply to nagesh kini 3 years ago

but rbi to kept quite even after my enquiring fate refering above complaint. it is strange system that if some thing is forwarded from other deparment they wont reply. anything sent to them will be forwarded to other department.even the rti activist arvind kejriwal's govt also is following the same principle as per recent news reports.

R P SHIVKUMAR

3 years ago

JUST ABOUT A HOUR AGO, I RECIEVED A PHONE CALL FROM A LADY (PHONE NO 01165471270) CLAIMING TO BE FROM IRDA AND ASKING ME TO INVEST ADDITIONAL AMOUNT TO GET AN AMOUNT INVESTED AGAIN THROUGH AN AGENT ON A FRAUDLENT PROMISE. AMAZINGLY, ALL MY POLICY DETAILS ARE AVAILABLE WITH THEM. IRDA DOES NOT ACT AND SIMPLY ASKS INVESTORS NOT TO BELIEVE THEM.
INVESTORS GENERALLY RELY ON SUCH PHONE CALLS AS THE POLICIES ARE IN THE NAME OF REPUTED COMPANIES AND THIER CONFIDENTIAL INVESTMENT DATA IS AVAILABLE WITH THESE AGENTS
REGARDS
R P SHIVKUMAR
9820213945

REPLY

raj

In Reply to R P SHIVKUMAR 3 years ago

Most of these fraud calls from Delhi (011- as in your case). If IRDA has difficulty in finding such culprits, they just have to link the dots for a policy already sold. The fraud seller have to log the policy with corporate agent/broker id.

raj

In Reply to R P SHIVKUMAR 3 years ago

Most of these fraud calls from Delhi (011- as in your case). If IRDA has difficulty in finding such culprits, they just have to link the dots for a policy already sold. The fraud seller have to log the policy with corporate agent/broker id.

jaideep shirali

3 years ago

Insurance is supposed to be primarily for risk, yet companies misguide customers. Bharti AXA's latest ad promises "upto 10%" guaranteed return, I'm sure the asterisk and "conditions apply" are possibly not even readable. A radio ad says that an insurance customer could not get his son married off lavishly, because he received less returns on his "insurance policy". If investment return was the requirement, why invest in "insurance", why not, say, mutual funds? And yet, the ad will say that, "Insurance is the subject matter of solicitation, etc." If this is not misleading customers, what is ?

Sanjay M Shah

3 years ago

I HAD MENTION EARLIER ALSO THAT BANKS ARE DOING WHITE COLLAR BLACKING BUSINESS BY SELLING INSURANCE & OTHER FINANCIAL PRODUCTS, BECAUSE CLIENT IS UNDER OBLIGATION & DO NOT KNOW WHAT HE IS TAKING/ BUYING. BANKS HAVE TIE UP & TARGET TO FULFILL. WHY IRDA IS ALLOWING SUCH BUSINESS?
REGARDING PHONE CALLS WHEN DATA IS GIVE TO IRDA THEY HAVE TO ACT ON THAT AGAINST BROKER AND INSURANCE CO., IF INSURANCE IS NOT ACTING AGAINST BROKER. POLICE COMPLAINTS IF ANY RECEIVED BY IRDA THEY HAVE TO TAKE UP MATTER COLLECTIVELY WITH THE TOP MOST AUTHORITY OF POLICE DEPT., THIS WILL HAVE MORE IMPACT THEN INDIVIDUAL COMPLAINT. IRDA CAN NOT BE SILENT SPECTATOR IN THIS MATTER.

nagesh kini

3 years ago

Under the previous Chairman, the IRDA was acting, but these days it neither barks nor bites but merely acts as a PO for passing on complaints to the defaulting insurance companies. We don't need a white-elephant of a Regulator to do just that!
Sometime back there was an inter-Regulator spat over ULIP?
Its time such dysfunctional Regulators are packed off rather than citizens pinning faith on them to redress gross mis-selling.

REPLY

Dayananda Kamath k

In Reply to nagesh kini 3 years ago

every regulator, and govt authority does the same thing. and it is treated as closed by the authority. and some times they just forward the reply received without going into the content and suitablity of the reply received. dont they have any obligation to see to the logical consclusion of the complaint.

P B Vashi

3 years ago

Requesting to send IRDA's email adress.
our email address is

[email protected]

Regards,
Vashi
05-02-2014
==========

K G Krupal

3 years ago

Professional encroachment is the main reason for such irregularities. Now with banks also entering in to the Insurance sector, problems of professional encroachment pressure may increase. Which may become another Stock Market of the country where safety of investor's investment is totally questionable.

kapil bora

3 years ago

IRDA is not a Regulator.It just act as a courier.When you make complaint then IRDA just forward it to the concern insurance company & the company always deny the charges even if you provide the proof.After making the complaint you have to ask the action taken by IRDA under RTI.then only the IRDA may reply you.unless IRDA never reply you on your complaint.

REPLY

raj

In Reply to kapil bora 3 years ago

I agree.

DEEPAK KHEMANI

3 years ago

No action will ever be taken against corporate and large brokers as these are the people who give volumes to the company.Imagine an Insurance Co taking action against the entity giving them maximum business!

REPLY

raj

In Reply to DEEPAK KHEMANI 3 years ago

Why not IRDA taking action to send strong signal?

nagesh kini

In Reply to raj 3 years ago

irda is a sleeping watch dog that can neither bark nor bite, where then does the question of any signals?

Cummins India Q3 net profit falls 37% to Rs147 crore

For the December quarter, Cummins India posted a 37% fall in its net profit due 6% decline in sales volumes

Cummins India Ltd, manufacturer of diesel and natural gas engines, reported a 37% fall in its third quarter net profit on subdued demand in Indian capital goods markets.

For the quarter to end-December, Cummins India said its net profit fell 37% to Rs147.23 crore from Rs234.08 crore while its total revenues, including sales,  declined 6% to Rs1,023.01 crore from  Rs1,089.46 crore, a year ago period.
 

“In spite of very adverse market conditions, we maintained our margins as compared to last year and expanded margins as compared to the preceding quarter mainly due to our focus on improving cost efficiencies. We are not seeing any signs of improvement in the Indian capital goods markets,” said Anant Talaulicar, chairman and managing director of Cummins India.
 

Between December 2012 to December 2013, FIIs shareholding in the company grew to 16.95% from 12.90% in a same period a year ago. While domestic institutional investors (DIIs) shareholding fell to 18.23% from 21.65%, public shareholding fell to 13.82% from 14.45% and promoter shareholding remained same at 51%.
 

Cummins India has declared an interim dividend of 250% or Rs5 per share.
 

Cummins India closed 1.30% up on Wednesday at Rs444.95 on the BSE, while the 30-share Sensex ended the day flat at 20,261.
 

For more stock results, check out this page

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Ranbaxy Q4 loss narrows to Rs396 crore

During the December quarter, the Daiichi Sankyo unit said it loss narrowed to Rs395.96 crore from Rs616.01 crore a year ago

Ranbaxy Laboratories (Ranbaxy), a unit of Japanese Daiichi Sankyo Co Ltd pharmaceutical company said its fourth quarter net loss narrowed despite lower sales and higher expenses on legal and professional fees.
 

For the quarter to end-December, the pharmaceutical company said its standalone net loss narrowed to Rs395.96 crore from Rs616.01 crore while total sales declined 5% to Rs1,327.63 crore from Rs1,401.42 crore, a year ago period.
 

“Ranbaxy has been strengthening its base business in key markets including India, Eastern Europe and Commonwealth of Independent States (CIS) and the US which has helped us recover our margins. We are facing some major regulatory challenges and are disappointed with the developments,” said Arun Sawhney, chief executive and managing director of Ranbaxy.
 

During the quarter, the Daiichi Sankyo unit made higher provisions as it faced legal threats from US Food and Drug Administration (USFDA) which had banned supplies from Ranbaxy’s Toansa plant in Punjab.
 

Ranbaxy made inventory provisions of Rs270.34 crore in concern of matters of its Toansa unit while spending Rs161.03 crore as legal and professional expenses and Rs128.04 crore on research and development (R&D) activities during the fourth quarter.
 

During December quarter Ranbaxy’s domestic market sales increased 8% to Rs591.92 crore from Rs547.64 crore while its overseas sales fell 14% to Rs735.71 crore from Rs853.78 crore, same period last year.
 

Ranbaxy said it had filed three abbreviated new drug application (ANDA) for the US market during the quarter.
 

Ranbaxy closed Wednesday 5.7% higher Rs340 on the BSE, while the 30-share Sensex ended the day flat at 20,261.
 

For more stock results, check out this page
 

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