The national consumer disputes redressal commission (NCDRC) has upheld a series of orders against Reliance Nippon Life Insurance Company Ltd, concluding that insurance agents had mis-sold long-term insurance policies to vulnerable customers through deception, misrepresentation and concealment of actual policy terms. In a comprehensive order pronounced on 7 November 2025, the commission dismissed all 25 second appeals filed by the insurer and affirmed the findings of both the district and state consumer commissions which had earlier directed the company to refund premiums, compensate complainants and pay litigation costs.
In the order, the NCDRC bench of Dr Inder Jit Singh (presiding member) and Dr Sudhir Kumar Jain (judicial member) says, "In the present case, it has been clearly established that the policies in question were sold under misrepresentation and without explaining its terms and conditions to the insured. No prudent person could have bought such policies if its contents and terms and conditions were clearly explained to them...There are concurrent findings of both the fora below regarding deficiency in service and unfair trade practices on the part of Reliance Nippon Life Insurance and the fact that the policies were sold under misrepresentation. Hence, the insured cannot be bound by the terms and conditions of such policies."
"Contentions of the insurance company that the complainants are not consumers as they have bought the investment plan and not the insurance policy lacks merit. Complainants have taken a specific plea that a copy of the policy was not supplied to them immediately or within the free look-out period, and they came to know about it only when the next year’s premium was demanded. Hence, contentions of Reliance Nippon Life Insurance that complainants are entitled to surrender benefit only subject to fulfilment of the conditions of the policy, which has a minimum two-year period before they become entitled to surrender value, also lack merit," the order says.
The disputes stem from policies sold as part of the 'Reliance Nippon Life fixed saving increasing income plan' during 2016, when agents allegedly approached customers with promises of high returns resembling a fixed deposit.
According to the complaints examined by the commission, consumers were assured that they had to pay a premium for only three years and would receive substantial benefits at maturity. However, when renewal notices arrived, many discovered that the actual terms required paying high premiums for up to 10 to 12 years, with overall policy durations running as long as 24 years. In several cases, the annual premium exceeded Rs3.99 lakh. Many of the complainants were senior citizens over 60 or 70 years old, while others were students without a stable income, making the commitments not only unsuitable but impossible to sustain.
NCDRC noted that no prudent person in such circumstances, especially an elderly individual or a student, would agree to long-term policies requiring payments until the age of 90 or 95, as some contracts stipulated. One complainant would have been required to pay premiums until turning 90, while another policy extended to the age of 95.
The commission pointed out that the insurer’s agents had 'neglected to properly assess the needs and circumstances of the insured individual', resulting in policies that were financially damaging, unsuitable and 'presented in a misleading and obscured manner'.
A particularly damning observation in the order pertained to the nature of the policy documents themselves. Multiple records revealed that the terms and conditions were printed in 'very small size of letters & blur i.e. in dotted lines', rendering them illegible.
Some consumers were made to sign blank documents or received their policies three to four months after issuance, well outside the 15-day free-look period mandated by regulations. The commission cited the Supreme Court’s ruling in Texco Marketing Pvt Ltd vs TATA AIG, which held that insurance contracts signed on dotted lines without a proper understanding are not binding on the insured. These findings significantly weakened the insurance company’s argument that the complainants were bound by contract simply because they had signed the forms.
Reliance Nippon Life Insurance argued in its appeals that the consumers had failed to exercise the option of returning the policies within the free-look period, that they had knowingly signed the proposal forms, and that they were legally entitled only to surrender value in accordance with the contract. It further invoked Section 92 of the Evidence Act to contend that oral allegations of mis-selling could not override written contracts. The insurer insisted that the policies were sold based on the complainants’ own representations and that the state and district commissions had misinterpreted contractual provisions.
NCDRC found these arguments unsustainable. It noted that several complainants did not receive their policy documents in time to exercise free-look cancellation. Others were handed illegible or incomplete documents, undermining any meaningful review of the terms. Since the very foundation of the contracts was tainted by misrepresentation, the insurer could not rely on the free-look clause or policy terms to escape liability.
The commission recorded that mis-selling allegations had emerged consistently from consumers across different backgrounds and geographical regions, indicating systematic problems rather than isolated errors. These practices, the order observed, 'expose the insured to significant financial strain' and betray a 'blatant disregard for ethical sales practices'.
The commission went on to highlight broader concerns about industry conduct, echoing observations of the Supreme Court that insurers often 'show all types of green pastures to the customers at the time of selling insurance policies' and later 'invent all sorts of excuses to deny valid claims'.
NCDRC stressed that senior citizens, who typically have limited income and declining health, require transparent guidance and products suited to their circumstances. In these cases, the company had sold products requiring long-term premium payment from consumers who clearly could not afford them. This, the commission said, amounted to unfair trade practice and deficiency of service.
Reliance Nippon Life Insurance also attempted to raise several substantial questions of law under Section 51(2) of the Consumer Protection Act, 2019, which allows second appeals only on such grounds. These included questions relating to evidence, estoppel, the interpretation of policy terms, the applicability of the free-look principle, and the burden of proof.
NCDRC examined these and found that they did not qualify as substantial questions of law. The commission noted that both lower fora had delivered concurrent findings based on evidence, and that the insurer’s appeals were simply attempts to revisit factual conclusions already settled. The commission reiterated that when a contract is procured through misrepresentation and incomplete disclosure, its terms cannot be enforced against the consumer.
After reviewing the complete set of case records—spanning district commission orders from 2023 and state commission orders from 2024—NCDRC confirmed that the facts pointed clearly to mis-selling. The insurer had failed to evaluate customer suitability, failed to provide documents on time, failed to disclose actual premium obligations, and knowingly targeted senior citizens and students with long-term financial products. The insurer’s insistence that complainants were not 'consumers' because they purchased an investment-linked product was also rejected as baseless. With no legal error or irregularity apparent in the earlier findings, the commission upheld the state commission’s orders dated 28th October, 29th October and 30 October 2024 and dismissed all 25 second appeals.
The ruling stands as a major rebuke of mis-selling practices in the life insurance industry and underscores the obligation of insurers to ensure transparency, fairness and suitability when dealing with customers—particularly those most vulnerable to aggressive sales tactics.
(Second Appeal No75 of 2025 Date: 7 November 2025)
