SBI Life Altered The Approved
Terms & Condition Of IRDA In
Life Insurance Policy
Cheated Millions Of Customers and Gained
31st May 2014: Lucknow :The SBI Life Insurance Company Limited’s policies will come in for a close scrutiny with the Lucknow bench of Allahabad high court directing the Serious Fraud Investigation Office to examine the policies and the unlawful gains that the company may have made by cheating the policyholders. LUCKNOW: The SBI Life Insurance Company Limited’s policies will come in for a close scrutiny with the Lucknow bench of Allahabad high court directing the Serious Fraud Investigation Office to examine the policies and the unlawful gains that the company may have made by cheating the policyholders.
The Insurance Regulatory Development Authority (IRDA) has been directed to critically examine each and every policy of the company and ask the SBI Life to wind up its business if its policies are not in line with the IRDA guidelines.
“The Serious Fraud Department of ministry of corporate affairs must examine these policies and unlawful gains made by the company and its directors, including directors of SBI, in the company by cheating the policyholders on the pretext that its policies are in compliance with IRDA regulations,” ruled a bench comprising justice Sunil Ambwani and justice DK Upadhyay while disposing of writ petition No. 8879 (M/B) of 2013 on May 29, 2014.
A retired scientist of National Botanical Research Institute (NBRI) Dr Virendra Pal Kapoor (72) had invested Rs 50,000 in 2007 in SBI Life- “UNIT PLUS II- Single” and received only Rs 248 as a balance in the fund on maturity after five years.
Lawyer and insurance activist Dhruv Kumar had appeared before the HC bench on behalf of the petitioner. “This is for the first time that the HC has asked the Serious Fraud Investigation Office to examine the company’s directors and the directors of the SBI for unlawful gains in the company,” said Kumar.
Taking a serious note of the matter “in which the investment of a senior citizen of Rs 50000 has been reduced to Rs 248 in five years”, the HC bench said: “We find it appropriate to issue a direction to the IRDA to critically examine each and every policy of the SBI Life.”
The HC bench further said “If it (IRDA) finds that the SBI Life, which has suffered penalties in the past for its defaults, has acted in breach of its guidelines it would be appropriate for it to direct the SBI Life to discontinue its policies and wind up its business.”
Significantly the bench declared the contract of SBI Life Unit Plus II – Single to be illegal and void and directed the SBI life to “return the original amount of Rs 50000 to the petitioner within a month.” The bench observed that the IRDA completely failed in exercise of its statutory duty in allowing the unilateral amendments to the provisions of the policy that guaranteed a sum of Rs 10000 to the investor.
It also directed the IRDA that the policies were not in line with its guidelines “or have hidden term and charges have any object to deceive the policy holder, it will direct the SBI Life to discontinue such policies and return the entire amount invested to the investors.”
The HC bench further observed, “It will be open for the central government to initiate prosecution against the management of the SBI Life in accordance with the law. The SBI Life is directed to pay Rs 10000 as cost of pursuing the writ petition to the petitioner.”
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