Allegations have surfaced that various insurance companies in the state were converting matured policies to pension schemes without intimating the policy holders.
A group of insurance investors, numbering more than 100, have come out against the practice terming it “cheating the people of their hard-earned money”.
They added that they learnt about the change only when they approached the insurance company office to get back their money.
Jinson Thengummoottil, one of the complainants, said he was disappointed to learn that his investment had been transferred to pension scheme. “I invested the amount so that I can use it for my daughter’s wedding,” he said. According to the complainants, one or two among them did receive an intimation letter sent by the insurance company notifying their policies would be transferred to pension schemes. “However, the remaining majority were in the dark about the move,” they added.
“The insurance companies can save their skin as they have printed a one-line notification on the brochure at a corner. Usually, the subscribers would not read every clause in the brochure on the belief that a nationally-reputed company would not do anything that would undermine the interest of the subscriber,” said a complainant. Most of them joined the scheme via agents. “Even the agents did not bother to tell us about the trap,” they added.
The Insurance Regulatory and Development Authority (IRDA) in 2009 had brought out a regulation that investment plan policies cannot be transferred to pension policies. It had stipulated that the nature of the policies should not be changed and that an investment plan should remain as investment plan.
However, the insurance officers said the act was applicable only on policies started in 2009 and after.
The 100-odd complainants were the ones who joined the scheme before 2009. They said they were planning to form an action group and report it to the Insurance Ombudsman.
Meanwhile, a marketing officers at LIC Ernakulam said there was a policy that enables changing the investment to pension scheme.
“Amounts more than a lakh can be converted to pension scheme only with the prior approval of the policy holder. Insurance companies usually intimate them before changing. Once it has been changed, it cannot be reverted,” she said.
However, Haridas M N, assistant marketing manager, LIC, said they never entertain changing plans on its own.
“Anybody’s money is safe with LIC and such allegations with regard to LIC were baseless,” he said.