Insurance
Personal Finance Exclusive
PNB Metlife online premium payment: You may lose your money for a minor fault!

PNB Metlife online premium payment does no verification of the policy number with date of birth, mobile and email address. One policyholder made a mistake in keying in the policy number. Amazingly, PNB Metlife refunded the premium to the wrong policyholder and is washing its hands off!

In June 2012, Asha Kapoor (name changed) used the online premium payment facility of PNB Metlife to pay Rs25,000 for her ULIP policy. While she put correct date of birth and mobile number, the policy number had a typo with one digit switched (e.g. policy number 37012645 instead of 37012654). Without any cross-check with the entered date of birth and mobile number, the payment was accepted for a wrong policy.

 

To make the matter worse, PNB Metlife refunded in full to the policyholder of the wrong policy (also a ULIP) to which payment was applied. It must be first case in history of ULIP that an insurance company claims to have refunded full premium!

 

A ULIP has premium allocation charge, policy administration charge, surrender charge and also mortality charge for risk cover. Once you make a premium payment to an existing policy there is just no way to get back your full premium. How did PNB Metlife ‘refund’ the full amount?

 

On not receiving an electronic receipt, Ms Kapoor filed a complaint with the grievance cell in November 2012. After couple of interactions, she finally got a reply in February 2013 that the premium had been paid to a wrong policy and that PNB Metlife had refunded the full premium to the policy owner of the wrong policy in Septmber 2012. Ms Kapoor should have asked for statement or logged in to see if the payment was indeed used to buy units for her policy in June 2012. It was a mistake that proved too costly.

 

PNB Metlife gave Ms Kapoor the name, address and landline number of the wrong policyholder and asked her to follow-up on her own and get her refund. According to PNB Metlife’s reply to the policyholder, We would like reiterate that the user is responsible for the accuracy and authenticity of the instructions provided to Metlife and/or service provider and the same shall be considered to be sufficient to operate the payment gateway. Metlife have no liability or obligation to independently verify the instructions or the authenticity of any transaction.”

 

Ms Kapoor has tried contacting the wrong policyholder on many occasions, but has not succeeded since the telephone number does not exist. The wrong policyholder’s address is in a different state which makes it difficult to physically visit and find out.
 

The case gets interesting based on what Ms Kapoor found out about the wrong policyholder. According to Ms Kapoor, “The person had enrolled for a ULIP policy in 2008. No premiums were paid thereafter. The policy was probably in a suspended state. This person got a refund of Rs25,000 and closed the policy. He was a PNB MetLife agent till 2010 or thereabouts. It is clear that there has been collusion between this person and PNB MetLife.”  

 

The questions that arise in this case are:

 

1. Why does PNB Metlife online premium payment ask for the date of birth, email and mobile number when it is not cross-checked with the policy number for which the payment is made? Even if it is accepted, can they not know that details entered do not match and then alert the bank account holder at some later time?
 

2. How did the wrong policyholder come to know that someone has made premium payment towards his policy?
 

3. If he somehow came to know about it, did he ask for a refund? If so, how is it possible that PNB Metlife gave full refund of Rs25,000 by cheque? Does any life insurance policy give back the full premium paid at anytime?
 

4. Why did PNB MetLife refund the Rs25,000 to the wrong person and not to the bank account from where the money originated?
 

5. Did the wrong policyholder commit a fraud by asking for a refund knowing that someone else had made premium payment by mistake?
 

6. Did he get an SMS alert or email when Rs25,000 premium was paid towards his policy.
 

7. How will PNB Metlife account the refund with its database of policyholders? The exact amount of Rs25,000 may not be what was due from the wrong policyholder. That should have also alerted PNB Metlife before they even thought of making any refund. How will the refund be accounted for against a wrong person?
 

8. Why did PNB Metlife take such a long time to find out what really happened?  Why did PNB Metlife take over two months to tell Ms Kapoor that they refunded her premium payment to wrong policyholder? Does this represent usual customer service delays?
 

9. Is it good customer service to tell your policyholder to go and retrieve your the money you lost from someone else?
 

10. Was the wrong policyholder a PNB agent and if so, was a there a collusion between PNB Metlife staff and the wrong policyholder?

 

PNB Metlife has kept a stony silence on the issues raised by Moneylife even after couple of emails and a phone call.

 

We have checked other websites like ICICI Pru Life and HDFC Life for online premium payment. They have much more checks than PNB Metlife. At the minimum each website stopped from online payment if policy number and date of birth did not match. Can PNB Metlife put a simple check to verify the details it takes from policyholder before accepting the payment or are they too eager to get payment from anyone by hook or by crook?

User

COMMENTS

P S MANI

3 years ago

Pnbmetlife insurance should take care of the online payment of the policy holder to get his/her receipts through email without fail and avoid sending postal correspondence on renewal policy payment.

srinivasan M

3 years ago

This case is ripe to be taken to IRDA and Banking Ombudsman to see if they truly stand for justice. To set up online system and that also to accept payments, but still not have any online validation for the data taken from customer,Whose fault is this ? This is also a deficient service to the customer as he is dealing with a very dangerous online system where the system cannot recover from simple data errors.

REPLY

CA PRADEEP AGARWAL

In Reply to srinivasan M 3 years ago

TOTAL DEFECIENCY on the part of the Insurance Company.

CA PRADEEP AGARWAL

3 years ago

Metlife if had done in their country the establishment might have closed their shop or heavy penalty might have been imposed so that they do not dare it again but in our country laws are OK but operations is very weak due to............

manish wani

3 years ago

Alarming but interesting in other way. PNB Metlife's add emphasizes about value of double checking. So are they indirectly telling the customer that you double check before paying :) If confidence and trust is the foundation for insurance company and I am assuming that is what they are trying to convey in ad then how come they do not have this simple double check before processing?

REPLY

CA PRADEEP AGARWAL

In Reply to manish wani 3 years ago

Yes, they are adding value by cheating the customers, I feel a direct complaint may be sent to RBI GOV. today he said about strictness on Banks and Insurance Companies and their nexus.

CA PRADEEP AGARWAL

3 years ago

Should file a case with the Insurance regulator i.e IRDA

N Kanitkar

3 years ago

One morre revelation. You can key in any random number as policy number and all other fictitious details and it still takes you to Bill desk for payment.Cheers. Then who keeps the money and for how long??

REPLY

raj

In Reply to N Kanitkar 3 years ago

that's terrible....

Dayananda Kamath k

3 years ago

their advertisement it self should have been an eye opener for the customer the person double checks the cash being counted by cashier and again he himself to be double sure. and tag line that is why 2 have joined together to form pnb metlife. and 2 together have looted the policy holder. long back one of the nationalised bank provided mobile recharge through atm. here the atm will recharge the mobile and recredit the amount back to your account instead of the service providers account. this was brought to the notice of the bank management, reserve bank of india, the charman of the service provider and even a police complaint was lodged. but no action was taken. rbi conducted a special inspection of the bank on my followup and some times a nsaty letter which forced them to do the inspection. they found the irregularity but did not bothere to initiate action. the telecom service providers where also not bothered that they are loosing revenue. police once enquired what is the actual situaton and gone.

REPLY

raj

In Reply to Dayananda Kamath k 3 years ago

Yes, Mr Kamath. You are right about PNB Metlife advertisement on double checking the money. Unfortunately, PNB Metlife online payment does not seem to cross check anything. So, forget about double checking there is not even single checking with PNB Metlife online payment.

Rajeev Sharma

3 years ago

She should raise the issue with IRDA.

REPLY

CA PRADEEP AGARWAL

In Reply to Rajeev Sharma 3 years ago

YEAH YOU ARE RIGHT

MCX-SX starts listing services; Dabur first company to list its shares

The capital market and futures and options segments of MCX-SX were inaugurated by finance minister P Chidambaram in Mumbai on 9 February 2013

MCX Stock Exchange (MCX-SX) today said it has started its listing services as three companies including FMCG major Dabur India has listed its securities on the capital market segment of the exchange.

 

Dabur India was the first company to come on board, other two being Pennar Industries and DPSC.

 

Welcoming the three companies on board, MCX-SX MD and CEO Joseph Massey said, “We remain committed to offer issuers and ecosystem intermediaries best of service standards, which will be way above the current benchmark.”

 

Massey further added, “We would ensure continuous innovations for enhancing issuers’ experience.”

 

“With this, MCX-SX is now geared up to list shares of companies that are already listed on other exchanges and of those companies proposing to come out with initial public offerings,” MCX SX said in a statement.

 

The capital market and futures and options segments of MCX-SX were inaugurated by finance minister P Chidambaram in Mumbai on 9 February 2013.

 

Commenting on the development, Dabur India director Mohit Burman said: “We are sure that the new stock exchange, with its wide network, will reach out to every nook and corner of the country and help the company as well as country in broad basing the investor base.”

 

As per the listing fee structure, MCX-SX is not charging any processing fee or initial listing fee, while the initial listing fee of the National Stock Exchange is Rs50,000 and for BSE it is Rs20,000.

 

The exchange (MCX-SX) charges only annual listing fees which is significantly less than the existing industry average and is up to 50% less than NSE, BSE slabs.

 

For a company with a paid up capital of up to Rs5 crore MCX-SX would charge an annual listing fee of Rs7,500, while for those firms would paid up capital is more than Rs2,500 crore, the annual listing fee would be Rs12.50 lakh.

 

“MCX-SX has a simple listing fee structure, which is attractively priced in comparison with other exchanges,” the company statement said adding that “this will translate into reduced cost of issuance and continuous listing for the companies listing on MCX-SX.”

 

As on March 2013, NSE has 1,666 companies listed on it, while BSE has 5211 companies listed on it.

User

Should you hold on or sell your HUL shares?

Shareholders holding on to the shares from now on will be living in hope that Unilever wants to delist HUL and will revise its buyback or open offer price from time to time

On 30 April 2013, Hindustan Unilever’s parent company, Unilever Plc, announced an open offer to buy roughly 487 million shares, or 22.52% of the share capital, of  HUL, at 20% above the previous day’s closing market price (i.e. 29 April 2013). The open offer stipulates that Unilever Plc intends to buy back HUL shares, voluntarily, at a price of Rs600 per share. At the moment, Unilever Plc holds roughly 794 million shares in HUL, which forms 36.75% of the latter’s share capital. This means, if Unilever Plc intends acquire the 22.52% of the shares outstanding, it will take its total shareholding to 59.27%.
 

If you are a shareholder what should you do? Tender your shares? Or hold on for more gains?
 

Long-term shareholders will find it hard to make this decision. While HUL is a well-managed company with exceptional return on capital, Rs600 is way above the fair value currently. On the other hand, there is the possibility of Unilever Plc taking complete control (i.e. 100% ownership) in which case the price will head higher.
 

On the negative side, Unilever finds great value in HUL and mines it regularly. Recently, HUL and Unilever Plc signed a ‘New Agreement’ under which HUL will pay higher royalty costs at an increasing rate till 31 March 2018. It will be 0.5% of turnover till March 2014, and thereafter in a range of 0.3% to 0.7% of turnover in each financial year, leading up to a total estimated royalty cost increase of 1.75% of turnover compared to existing arrangement, till 31 March 2018. This means, HUL will have less to distribute to shareholders or reinvest from the pie.
 

Recently, Hindustan Unilever had announced good March quarter results. We had covered it over here (Hindustan Unilever reports robust results; net profit up 14.65%). Both its return on networth and return on capital employed are stupendous at 108% and 123% respectively. The valuations are at a premium though, with market capitalisation at 26.30 times operating profit.
 

In our view, investors are taking a gamble if they hold on to the shares. Three factors will decide the movement of shares: rising earnings, more and more extraction of value by Unilever and possibility of a higher buyback price. Of these three, a shareholder, as an outsider, has a sense of only the first factor. It is impossible to get a sense of the other two. And based on that first factor of earnings, HUL is currently overvalued. The price of Rs600 will act as a magnet and HUL shares will not fall but the upside looks limited. Shareholders holding on to the shares from now on will be living in hope that Unilever wants to delist HUL and will be interested in revising its buyback or open offer price from time to time. Meanwhile, if performance slows down even a little bit, the stock will stay flat or even fall.

User

COMMENTS

Nilesh KAMERKAR

3 years ago

Think again . . . can anyone build another HUL if he had Rs.150000 crores?

Suiketu Shah

3 years ago

Excellent opinion from moneylife.The opinion in the printed press yesterday is all anti-investor asking people to hold on to HUL.

We are listening!

Solve the equation and enter in the Captcha field.
  Loading...
Close

To continue


Please
Sign Up or Sign In
with

Email
Close

To continue


Please
Sign Up or Sign In
with

Email

BUY NOW

The Scam
24 Year Of The Scam: The Perennial Bestseller, reads like a Thriller!
Moneylife Magazine
Fiercely independent and pro-consumer information on personal finance
Stockletters in 3 Flavours
Outstanding research that beats mutual funds year after year
MAS: Complete Online Financial Advisory
(Includes Moneylife Magazine and Lion Stockletter)