Premium of crores of rupees not remitted to LIC: human rights activist

Dr Ravindranath Shanbhag, president of Human Rights Foundation, has charged that micro insurance (MI) agents, appointed by the Life Insurance Corporation of India (LIC), has put hundreds of its sub-agents into difficulty by not paying the premium amounting to crores of rupees.

He said they have received complaints from specific persons on improper implementation of LIC’s Jeevan Madhur scheme in Kadur taluk. The foundation, along with Basrur Consumer Forum, found names of thousands of micro insurance policy holders dropped from the scheme by LIC, for reportedly not paying premium. In most of the lapsed policies, the records show only one or two instalments of premium paid. Some claims were rejected for the same reason. It is also found that every policy holder, whose policy has lapsed, has receipts for payment of premium all the years. Further, all these receipts carried LIC’s official logo, Shanbhag claimed.

He said three NGOs – M/S Samanvaya Health, Education and Rural Development Society, Tiptur, Sri Makkanneswari Yuvathimandali, Arsikere and Shobhodaya Health and Rural Development Society, Chikkamagaluru – were the MI agents appointed by the LIC. They had appointed sub-agents with LIC’s approval to collect money from the policy holders. Prima facie, it is observed that the sub-agents collected the premium and recorded it in the “Deed of Agreement”. They handed over the collection to the respective MI agents as prescribed by the LIC.

The system continued till some MI claims were rejected stating that the policies had lapsed due to non-payment of premium. Both policy holders and the sub-agents were shocked. Primary investigations show that the cash handed over to the MI agent by sub-agents was not deposited with the LIC and DDs were adjusted to some other policies defrauding the LIC, sub-agents and policyholders as well. As a result, 57,873 out of the 5,80,86 policies (99.63%) had lapsed, he explained.

Shanbhag said most of the policy holders are illiterate villagers and suspected sub-agents of pocketing the premium amount.

The sub-agents, who are mostly anganwadi teachers, are unable to face the public, for fear of being manhandled and beaten by irate mobs. Most of them are forced to refund to the policy holders from Rs 1 lakh to Rs 3 lakh, to be in the villages. Some others have taken loan from banks and pawn brokers by pledging jewellery to pay off the policy holders. Some have even sold small pieces of land they owned. The financial crunch has driven most of them to disappointment and disgust in life, he stated.

FIRs were filed at Arsikere and Chikkamagaluru police stations in this regard. It is believed that the MI agents have defamed the LIC and cheated policy holders at least to the extent of Rs.1.75 crore in Udupi division. Although LIC is not involved in the fraud, it has failed in supervising and monitoring its agents. This systemic failure has led to such a big fraud, he claimed.

Sumitra, a victim, said that she was misguided by the NGO. The only way is to end life. Each sub-agent at least has to bear the burden of Rs three to four lakh, which is impossible, she added.