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

Moneylife Foundation’s Insurance Helpline has solved three cases of life insurance sold with a bait of fraudulent “interest-free loans”. In all the cases, Reliance Life’s corporate agent AB Capital was involved

Moneylife Foundation’s Insurance Helpline has helped three persons to get refunds of Reliance Life Insurance policy premium as the product was fraudulently sold by enticing the customer with a fake “interest-free loan” of 10 times the premium from Reliance Capital. The latest case was of Shailendra Dheer (name changed) who had paid Rs30,000 premium to AB Capital with hope of getting Rs3 lakh “interest-free loan”.
 

With Moneylife Foundation’s intervention, Mr Dheer immediately got a call from head–customer care of Reliance Life who helped to get refund of Rs30,000 within two days. The fourth case has just been reported to AB Capital wherein the customer paid Rs20,000 premium for lure of Rs2 lakh loan. Customers even get a fake loan reference number to make it look authentic. The waiting period for the fake loan is ‘forever’.
 

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

In the previous two cases, Prashant Gupte (name changed) got a refund of Rs2 lakh and Dr Sujay Verma (name changed) got a refund of his premium of Rs60,000.  Mr Gupte had taken a personal loan of Rs2 lakh to pay the premium. Clearly, these are cases 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. 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.
 

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

We had stated in our previous article without mincing any words, “Will the Insurance Regulatory and Development Authority (IRDA) act quickly to cancel AB Capital’s license before it cheats more people?”AB Capital, a corporate agent of Reliance Life has written to Moneylife Foundation probably after facing the heat of its name entangled in the three cases that were resolved.
 

AB Capital’s email states that “We would like to bring to your attention that AB Capital is committed to protecting its customers' interests and ensure customer delight. We are therefore taking these reported incidents very seriously. As a result, based on our internal vigilance, we plan to lodge FIRs against the perpetrators and terminate their employment. We have strengthened our pre-login verification calling wherein each and every customer is called for verification and confirmations.”
 

AB Capital asks Moneylife readers to bring any such incidence of spurious selling to their notice by writing to them at [email protected] . Please drop a line to Moneylife Foundation Insurance Helpline [email protected] so that we are kept in the loop and can ensure justice to the hapless consumer. AB Capital’s email ends with “We would also like to caution your readers to not let greed get the better of them and not fall prey to any such lucrative and bogus offers.” If only such bogus offers were never made by those associated with AB Capital, the problem would not have arose.
 

AB Capital should evaluate at all the policies sold by them instead of waiting for policyholders to make complaints. Reliance Life has also a lot to answer even if it did not directly make such fraudulent offers. IRDA can surely get the menace to stop, in case, it acts. Reliance Life and IRDA—are you listening?
 

Read:

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

Reliance Life ULIP mis-selling: Justice served

Life insurance: Don’t fall for assured returns, look for comprehensive cover and avoid dubious agents who promise you fantastic combination plans

Are your insurance details all in the public?

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COMMENTS

Paresh

5 years ago

Same case happen with Me.
A B CAPITAL AND RELIANCE BOTH INVOLVED in this type of fraud.
DO not procure any thing from Reliance as well as A B Capital.
Also dont believe on phone call received from Delhi.
All calls are for cheating purpose.

Deepak Sholapurkar

6 years ago

One ore Great service by money life

Vaibhav Dalvi

6 years ago

I am also one of the victim of them. I have also paid premium of Rs. 50000/-.

Kindly help me out.

-Vaibhav Ramchandra Dalvi.
9892489511

REPLY

Moneylife Foundation

In Reply to Vaibhav Dalvi 6 years ago

Greetings!

Moneylife foundation has launched a FREE Insurance helpline for Moneylife foundation members and subscribers to Moneylife magazine, providing one to one basic help and guidance on issues and problems regarding insurance. Click on the link to know more
http://moneylife.in/promotion/insuranceh...

To avail the free insurance helpline. We would suggest you to become a moneylife foundation member. It is FREE and simple. Click on the link to become a member http://www.moneylife.in/register.html

Our helpline is on a best effort basis. We would request you to send us a synopsis of your issue in not more than 500 crisp words at [email protected]

MDT

In Reply to Vaibhav Dalvi 6 years ago

Thanks for your comment.
Kindly use our FREE Helpline for insurance related grievances. http://moneylife.in/promotion/insuranceh...

Regards,
MDT

IRDA bancassurance guidelines put on hold: Will the core issues be addressed?
IRDA guidelines on bancassurance were expected to be released in August 2013, but are now on hold after the Department of Financial Services questioned the rationale of insurers tying up with banks on a geographical basis and asking for wider consultation with stakeholders  
 
The Insurance Regulatory and Development Authority’s (IRDA) guidelines on bancassurance, which were expected to be out by next month have hit a hurdle. The department of financial services (DFS), which works under the finance ministry, has questioned the rationale of insurance companies tying up with banks on a geographical basis. DFS also wants to have a wider consultation with stakeholders. DFS directive has asked for IRDA’s bancassurance guidelines to be put on hold.
 
Bancassurance guidelines specify the rules for insurance companies to appoint banks as their corporate agents to sell policies. Currently, a bank is allowed to sell the products of only one life and non-life insurance company as a corporate agent. The proposed draft divides the country into three zones comprising of 40 regions. A bank could tie up with only one insurer for a minimum of 10 regions and a maximum of 20. It means that banks can tie-up with a minimum of two insurance companies while the maximum can be four. 
 
DFS feels that IRDA’s proposal to have a zone-wise tie-up with banks will be complicated. Several banks and insurance companies have raised concerns about logistical problems if the zone-wise tie-up is implemented. But, banks and insurers have their own reasons for either wanting open architecture or to remain with the existing exclusive one life and non-life insurer tie-up. 
 
The insurance companies who are looking for open architecture are the ones who are not promoted by banks and hence have limited bancassurance alliance. Conversely, bank promoted insurance companies would like to have an exclusive tie-up with their parent bank to keep competitors at bay. What is the incentive to be their exclusive corporate agents, considering that banks get a big premium from insurance companies? Insurance companies would rather keep monopoly of exclusive tie-up with their promoter bank and hope that other banks take up a broking license to sell products of multiple insurance companies.   
 
Moneylife is of the opinion that making banks are not accountable to consumers, and going for an open architecture can further complicate the matter. We have highlighted numerous cases of mis-selling of life insurance policies to bank customers? Even senior citizens are not spared; in-fact they are an easy target and are conned by false promises that insurance products will offer better returns than their existing fixed deposits. Young couples fall for expensive schemes that promise to secure their child’s future and buy the products without understanding different charges that decimate the corpus. It is time the DFS addressed these issues rather than restricting themselves to the logistics of bancassurance alliances for multiple insurers.
 
Currently, bancassurance partners do not own the responsibility of mis-selling as they are mere corporate agents and not brokers. An insurance broker represents customers unlike an agent who represents an insurance company. The Reserve Bank of India (RBI) may not be in favour of allowing banks to set up broking arms as their performance will affect the balance sheet of the bank itself, which will not be in the interest of depositors. RBI had said that banks assuming the role of insurance brokers could lead to a conflict of interests where the bank was also the promoter of an insurance company. 
 
RBI's financial stability report’s Chapter III - Financial Sector Regulation and Infrastructure raises several crucial questions on bancassurance model’s use of unfair and restrictive practices. 
 
Here are some important points raised in the report – 
 
Under the ‘bancassurance’ model, banks in India have been permitted to undertake insurance business as agents of insurance companies subject to certain conditions and without any risk participation since August 2000. As announced in the Union Budget 2013-14, it is proposed to permit banks to act as insurance brokers so that the entire network of bank branches will be utilised to increase the penetration of insurance services in the country. As insurance brokers the banks will be able to sell insurance products of any company, as against the restriction of only one company applicable under the agent-principal model. 
 
While banks are well suited to distribute insurance products because of their wide network, several issues have arisen regarding their conduct in the process, generally pertaining to mis-selling and certain restrictive / unfair practices (such as linking provision of locker facilities to purchase of insurance products, selling of unsuitable and/or multiple policies etc). 
 
It was observed that in some cases, banks did not have clear segregation of duties of marketing personnel from other branch functions and bank employees were directly receiving incentives from third parties such as insurance companies, mutual funds and other entities for selling their products. In some cases direct incentives to the bank staff have created distortions in the sales structure. 
 
According to IRDA’s Annual Report 2011-12 the maximum complaints in life insurance related to mis-selling. They also mainly pertained to the private sector, though LIC leads the business with over 70% share. The type of complaints were mainly in the nature of unfair trade practices and mis-selling of products (e.g. malpractices, actual product sold being different from what was proposed, single premium policy being issued as annual premium policy, surrender value being different from projected, free look refund not paid, misappropriation of premiums etc). 
 
As a significant portion of private life insurance companies use banks as their corporate agents, there seems to be an urgent need to revisit the marketing and sales strategies used by the banks in pushing insurance products, especially since insurance is among the more complex of financial products for the common man to fully comprehend. The limits on commission structure and the operating expenses of insurance companies are laid down in the Insurance Act, 1938 and the Rules framed there under. The compliance with these limits is being monitored by IRDA on an annual basis, and instances of breach are dealt with through penal action. In the recent past, there have been instances of both insurance companies as also the corporate agents (banks) being penalised.
 
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IRDA removes hospitals’ ‘minimum bed’ condition for mediclaim
A wrong decision by the insurance regulator bites the dust. The requirement of a hospital to have minimum 15 beds for it to be covered under mediclaim has been scrapped. The benefit to include smaller nursing homes far exceeds the risks of any mediclaim fraud
 
Insurance Regulatory and Development Authority’s (IRDA) guidelines on standardization in health insurance defined hospital with at least 10 in-patient beds, in those towns having a population of less than 10 lakh and with 15 in-patient beds at other places. It was becoming a big issue for small nursing homes as mediclaim policyholders would not been covered there. Nursing home owners had termed the move as ‘unreasonable’. In Mumbai, 684 out of 1,200 nursing homes have less than 15 beds. The Association of Medical Consultants (AMC), a body of over 7,500 doctors in the city, had also filed a petition challenging IRDA’s circular on bed restriction for mediclaim cover. 
 
On 5th July, IRDA told the Bombay High Court that it has withdrawn the bed restriction clause. The hospitals will need to be registered with the local authorities under the Clinical Establishments (Registration and Regulation) Act, 2010, or under the enactments specified under the Schedule of Section 56(1) of the said Act.
 
IRDA’s diktat on bed restriction in the guidelines was seen as not just against smaller healthcare providers but also against the public. Policyholders would have been pushed to undergo treatment at bigger hospitals which in most cases charge more than smaller nursing homes. As such, policyholders feel harassed with partial claims settlement and it will only increase with higher bill amounts from bigger hospitals. 
 
In India, the category of room (private a/c, private non a/c, twin sharing, etc) also determines all the other incremental charges associated with it. The better the room, higher the associated charges even including doctor’s fees. Mediclaim policyholders having high coverage may not negotiate with the hospital on the amount being charged and will avail better facilities even for ordinary hospitalization just to reap the benefit of paying premium to the insurance company over the years.
 
When a mediclaim policy offers ‘cashless’ at high-end hospitals like Hinduja and Lilavati in Mumbai, it is tempting for the insured to indulge in the best of medical treatment even for non-life-threatening procedures. There can be a huge variation in costs among different hospitals for the same procedure. The insured may not worry, as making a claim is looked at as “payback time” for getting the benefit of premium payment over a period of time. The insurer pays the claim but, ultimately, the insured pays with possible increase in the premium. 
 
Even in the case of Moneylife’s group insurance claim for kidney stone removal, we had excellent small nursing home option nearby which would have provided good, clean and cost-effective treatment. However, the employee had to go for expensive alternative due to lack of cashless facility with these small nursing homes. Imagine, what happens if the nursing home is not even covered under mediclaim. Those who are willing to go even for reimbursement claim would have been ineligible. IRDA has taken right step in backing out of the bed restriction clause. 
 
One of the main reasons that would have prompted IRDA to include the bed restriction in the new health insurance guidelines is the possibility of mediclaim fraud from smaller nursing homes with or without TPA support. But, inflated bills can come from any size hospital. The bigger the hospital, the higher are the charges that are levied. Unnecessary tests can be done by any hospital once you declare that you have mediclaim cover. 
 
Last year, a leading Mumbai-based surgeon (who prefers to remain anonymous) gave insights into working of high-end hospitals. He said, “Insurance companies find it difficult to determine the opaque cost of the implant charged by big hospitals. These hospitals can buy implants as bulk purchases and are also sourced from different places to save on taxes; Maharashtra has 10.5% sales tax plus octroi, Hyderabad has 4.5% while Chennai does not have any tax. Bigger hospitals also sell implants to smaller hospitals at different rates. The MRP (maximum retail price) on the box has no relevance to the actual cost to the hospital. Medicines are purchased by bigger hospitals at an unfathomable discount. Hospitals makes money only from pharma items (implants, medicines), nothing else; otherwise it is a white elephant.”
 
 
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COMMENTS

Bhanuprasad Suthar

2 years ago

I had taken the health insurance policy from cholamandalam general insurance Co duly certified by central bank of India for its clients as well as employees including retirees. I am retired staff of the bank. I submitted medical claim as per prescribed format but claim repudiated on the ground of hospital size. If IrDA has withdrawn the stipulation of size of hospital then company would have settled the claim. Guide me how I should proceed. Also if possible please give the circular no and date of IRDA's guideline.



prafulpatel

4 years ago

on 5th july irda told the bombay high courtthat it has withdrawn the bed restriction clause for mediclaim.but insurance companies /tpa r still asking for that.can i get a copy/evidence of that from irda/court or u to produce in front of these companies/tpa.pl let me know.pl tell the year 2013 or 2014.

anand

5 years ago

Dear patients/consumers,

Please bear in mind these following facts which I have understood working as a consultant in a "corporate" hospital.

1)These hospitals are run/owned by big business houses who have only one bottom line i.e"profit at all costs".

2)There is a huge amount of pressure on the doctors working at such hospitals ,especially in hospitals where doctors are attached as full-timers to maximise profits.

These doctor colleagues often complain about the malpractices that they are forced to indulge in so as to generate more revenue without which they may be asked to leave.

The irony is that a so called leading hospital in Mumbai promotes itself citing its full-time consultant system( each department having just one or two full-time consultants) when in fact a having many consultants is always healthy in terms of choice offered to patients and more importantly in ensuring that the doctor is not overworked and always striving to give his/her best.

3)Big hospitals ,more often than not,are CHAOTIC since there are too many "cooks"(read doctors) involved and the personal attention which patients deserve,is lacking. Inadvertently the line of treatment is not always streamlined and keeps on changing each day. length of stay is increased,more number of investigations are ordered and bills get inflated.

MIND WELL,YOU MAY THINK YOU ARE WELL INFORMED BUT YOU WILL NEVER REALISE WHAT IS HAPPENING.

In fact sometimes things sometimes spiral so absurdly out of control that even the doctors cannot control it.

3)Foreign trained doctors are sometimes misfits to cater to the Indian milieu.

Please understand that India can ill afford the defensive system of medicine practised in the west which is algorithm based and depends very heavily on investigations rather than clinical skills.

There is a very strong move afoot to stamp out smaller health care facilities which may not be having the "mall like look " of big hospitals but offer affordable,timely and very personlised treatment,close to your house.

My advice to all patients is

a)to CHOOSE their doctors WELL after understanding their disease condition and the treatment offered.

b)NOT be swayed by reputation of a hospital or a doctor.But rather by the information given and the sincerity which your doctor exhibits
There are well-entrenched marketing ploys being employed to ensure that patients are fooled into going to so called"number one doctors" or "world class hospitals"

c)not be coerced into going only to a certain group of hospitals which have a tie-up with your insurance company.
These tie-ups involve the give and take of bribes and kick-backs and usually consist of hospitals which conform to the diktats/demands of the insurance company/TPA rather than considering what is best for the patient.
Note:the insurance company/TPA is in this business to maximise its profits and not with any philantrophic intention.

You will most definitely hear from me again.

wish you all good health.

anand

vitthal ambike

5 years ago

I agree with decision

vitthal ambike

5 years ago

i m agree with a dicision

suvarnamk

6 years ago

first time the aaam aadaami cries have been heard.the next step is room rent as @ of S.I. 1% ( many policies include room rent+resident dr ch +nursing ch)
OF COURSE IN OUR COUNTRY U CAN FILL YOUR STOMACH IN SAY 1,5,12 RUPEES THEN WITH ESCALATING INFLATION HIGH PROPERTY PRICES AND POOR SALARIES PAID TO HOSPITAL STAFF
1% S.I PER DAY IS ONE RUPEE MEAL.
the people who make law r above law in our mother land;similarly insurers who frame the laws (terms, conditions)have insulated themselves by passing resolution in boards that they get free medical attention here & hereafter (in retirement).
it is not surprising that rulers r far removed from reality
why for each proper understanding the aam aadaami must shed blood to get his proper dues. the person who pays the premium, from which insurers, tpa, public servants employed after retirement receive their lively hood is always at the receiving end begging for mercy ;why the citizen point is always ignored at the behest of corporate giant indian or otherwise

Devendra Gawali

6 years ago

Can you provide me any specification or circular at [email protected] because Insurance company denied my claim for Hospital has less than 15 beds. waiting for your reply. Devendra Gawali- Mobile no. 98810 68756

DEEPAK KHEMANI

6 years ago

Finally an absurd and anti consumer condition was removed as better sense prevailed. What is important to know is where do these hare brained ideas originate and which officer finally decides to give a go ahead to such stupid ideas. Is anyone actually accountable for such actions?

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