According to CCI, United India Insurance does not seem to hold a position of strength in the services of medical insurance, which can enable it to operate independently of the competitive forces along with its TPA
The Competition Commission of India (CCI) has rejected allegations of abuse of dominance against United India Insurance Co and its third party administrator (TPA) E-Meditek.
The CCI in an order issued on 1st July, said it was “appropriate to close this case...as no contravention of the provisions of the (Competition) Act is prima facie found to exist”.
As per the complaint filed by an individual, United India Insurance had obtained the business of “Mediclaim Insurance for the CanCard Holders under group insurance from the year 2005-06”.
It was alleged that since United India Insurance was the only and dominant service provider to “CanCard Group Medi insurance policy holders”, all holders who opted for these mediclaim policies were necessarily required to carry out all the transactions through the insurance company and its TPA.
“... Opposite Party 1 (United India Insurance) does not seem to hold a position of strength in the relevant market (services of medical insurance) which can enable it to operate independently of the competitive forces prevailing in the relevant market or affect its competitors or consumers or the relevant market in its favour,” CCI said.
The complainant had also alleged that E-Meditek failed to fulfil its obligations pertaining to renewal/termination of the policy, claim intimation and repudiation of claim, among others, under its agreement with United India Insurance.
However, CCI noted that if E-Meditek was not fulfilling its obligations under the agreement, then the insurer could have terminated the contract or take legal remedies and that the policyholders could have complained to the IRDA.
Moneylife Foundation’s Insurance Helpline has received a second case of fraudulent “interest-free loan” offer from AB Capital. This time, the victim took a loan of Rs2 lakh to pay the high insurance premium, lured by the carrot of a fat, interest free loan of Rs10 lakh
On 4th July Moneylife Insurance Helpline received an email from Prashant Gupte (name changed) saying that he had purchased two Reliance Life Insurance policies for himself and his wife by paying a Rs1 lakh premium each. Worse, Mr Gupte did not have the money. He took a personal loan to pay the premium, because AB Capital, a corporate agent for Reliance Life promised him an “interest-free” loan on Rs10 lakh on buying the Reliance Money Back Guaranteed Plan. He wrote to us on reading out reports about Dr Sujay Verma (name changed) who was similarly trapped and how our intervention led to a refund. Also, there was no sign of the interest-free loan he was promised. Clearly, a second case of outright cheating ought to make the regulator sit up, but until they do, people are getting trapped into taking a loan to buy high premium insurance plans of trivial value with the lure of an “interest-free” loan of 10 times the premium.
Moneylife Insurance Helpline immediately wrote to the head–corporate communications of Reliance Capital. While we are still to hear form the company, our communication had immediate effect. Mr Gupte has written to say that he received a call from AB Capital on the same day (4th July) and from Reliance Life customer care asking the bank details for refunding the amount. He also received another call from the Senior Manager, Compliance, at AB Capital. Mr Gupte says he was very apologetic and promised to refund the full amount shortly and he also promised to initiate strict action against the persons involved in the fraudulent sale. He also requested Mr Gupte not to take the complaint to the next level for fear of damaging the company's reputation.
Earlier, the intervention by Moneylife Foundation’s Insurance Helpline had helped Dr Verma in getting refund of Rs60,000 premium for Reliance Life policy fraudulently sold by the same corporate agent—AB Capital, with the false promise of an “interest-free” loan of Rs6 lakh from Reliance Capital. Dr Verma was running pillar to post for six months to get the refund without any success, but within two hours of our taking up his case with the company, Reliance Life promised to make amends.
At that time, Reliance Life Insurance had claimed to us that “the calls are made by spurious callers, a menace faced by the industry, and not part of any mis-selling. The industry has sought help from the EOW and we, as Reliance, have also filed over 170 FIRs against these spurious callers.” Reliance Life pointed to an article in the Times of India which assures us: “These complaints have not made much headway since there was no transaction.” This is not entirely true. Moneylife Insurance Helpline has now forwarded two such cases with full details, which are not about nuisance calls of “interest-free loan” but actual transactions involving a Reliance Life insurance policy purchase which amount to outright cheating because they customers were denied the promised ‘interest free’ loan from Reliance Capital.
Moreover, AB Capital is clearly listed as a corporate agent of Reliance Life on its website http://www.reliancelife.com/Contactus/CorporateAgents/CorporateAgentsDetail.aspx?CityId=1. It has IRDA license number 5484516 and IRDA agent code 20879724. The license is valid from 22 June 2012 to 21 June 2015. The name of director is Raj Kumar Bhatter / Padma Bhatter /Anubhav Bhatter. Sharmistha Banerjee is the chief insurance executive. Its address is: 14/1, Paul Mansion, 6 Bishop Refroy Road, Kolkata, West Bengal-700020.
Can Reliance Life adopt a hands-off attitude? If the agent is peddling lies on its own, shouldn’t Reliance Life discontinue its relationship with AB Capital? Will the Insurance Regulatory and Development Authority (IRDA) act quickly to cancel AB Capital’s license before it cheats more people? We will be tracking this story to bring you updates.
UPDATE: Reliance Life has refunded Rs2 lakh to Mr Prashant Gupte