Rajasthan: ICICI Officials Accused Of Deceiving About 250 People By Selling Them Insurance Policy
March 16th, 2018
A farmer in Rajasthan was allegedly deceived by ICICI officials as they put half of his money in an insurance policy without his assent or knowledge. According to a farmer, Pyarelal Dangi, he was assured that his money is being saved in a fixed deposit in the bank, but ICICI deceitfully sold him an insurance policy.
Know About Pyarelal And Many Others Who Was Trapped By ICICI
“If I lose the money, it will lead to a situation where we will have to die,” Dangi told The News Minute (TNM). Now, the poor farmer does not know how to secure his children’s future as he has lost his hard-earned money.
ICICI kept half of his money in a fixed deposit and gave him the related documents. However, the farmer was unaware of where the other half went, till he received a letter from ICICI Prudential asking him to pay the amount on time to the bank for an insurance premium which is a kind of an insurance policy. Later, he realised that he had been signed up for it without his consideration.
Reportedly, this is not for the first time that the bank has been allegedly involved in such fraud cases. Around 200 people in rural Rajasthan have been duped. Most of them are farmers. ICICI officials have been continually duping farmers by selling them costly insurance premiums that none of them can manage to pay for.
A former ICICI employee of ICICI Prudential, Nitin Balchandani, noticed such fooling pattern in 2010 and he found around 250 cheat cases. Most of the customers belonging to median households income were signed up for insurance premiums that they cannot afford. Hence, they would not get any penny back, said Nitin.
In at least three cases, the employees of ICICI have been charged with reducing customer’s age, increase their income and education levels, forging a signature to fallaciously sell their insurance schemes, according to an FIR filed by a Special Operations Group (SOG) of the Rajasthan Police in November 2017.
What is Exactly ICICI Doing?
ICICI officials are accused of violating the regulatory rules of the Insurance Regulatory and Development Authority of India (IRDAI).
According to Nitin, this trend has now become a bank’s accepted practice. The bank deliberately asks people taking loans or depositing money to put some part of their money into a fixed deposit by showing them alluring benefits. Usually, customers agree for it and sign the policy, but, once they agree, the bank purportedly put half of their money into a fixed deposit and another half into either a unit linked insurance plan (ULIPs) or a traditional insurance policy.
“When they do not pay the premium if the plan is traditional, all the money gets forfeited. If it is a ULIP that has been issued after 2010, if he does not pay the premium, he still gets the money back after the period, where he would earn minimal interest,” The News Minute quoted Nitin.
Nitin has looked into the cases where the customers have been signed up for traditional insurance plans, which would ensure that the customer’s money was forfeited.
Moreover, unsuspecting clients who have been signed for ULIPs would get their money back after some duration even if they failed to pay the premium, but their money is locked for a more extended period.
In case of FD, customers would get a high rate of interest on the amount they deposit, and they can ask for the money whenever they want to. However, in a ULIP, a customer would get a lower rate of interest and also their cash get locked for certain period. The best advantage for the company is that they are not required to cover the policyholder just after a year.
As per Nitin, when he took the farmer and other customers grievances to the senior management in ICICI, he was ‘pressured to resign’. Therefore, he resigned from the organization in 2012.
Nitin’s Case Background
The Rajasthan High Court repealed all the proceedings against Nitin in January 2018, about the case by ICICI that was reopened in September 2016.
In a petition filed by Nitin in September 2016, asked the banks such as ICICI Bank, ICICI Prudential, RBI and IRDA and the Union of India to shut down on their practices. The petition further demanded the regulator who would monitor such practices and maintain proper mechanisms, as well as make a data of complaints filed by customers.
In October 2016, the court stated that IRDAI must not only protect policyholders but also “enforce high standards of integrity, financial soundness, fair dealing and competence to those who are regulating the insurance, settle grievances and to prevent insurance fraud.”
Reply Of ICICI Prudential
An employee from ICICI Prudential Life Insurance Company told TNM that the ICICI Bank and its insurance company deal with the highest level of compliance with regulatory and legal requirements. We have a well-defined Code of Conduct which our employees have to adhere to.
According to a spokesperson, when it comes to ICICI life insurance industry, the company has the lowest customers ‘grievance ratio’ and the best ‘persistency ratio’. If it is about those three cases registered with by SOG in November 2017, we will continue to extend our assistance to the authorities.