The State Consumer Disputes Redressal Commission has held that a specific condition in an LIC’s pension policy that no proportionate annuity can be paid from the date of last payment of annuity instalment till the date of death of an annuitant amounted to unfair trade practice.
The Commission made the ruling while upholding an order of the Ernakulam District Consumer Disputes Redressal Forum directing the LIC to disburse the annuity arrears to a complainant. The Commission dismissed the appeal filed by LIC.
The district forum passed the order on a complaint filed by C.R. Paniker of Aluva.
According to him, his wife died on April 10, 2009. She had taken seven immediate annuity ‘New Jeevan Akshay’ policies from LIC.
The policies had provided for payment of specified amounts of annuity until the death of annuitant and for the return of the purchase price to the nominee of the annuitant on her death. The deceased opted for payment of annuity instalments yearly.
Panicker said he had received the purchase price of the policies in June 2009. However, proportionate annuity for the period from the date of payment of the last annuity till the date of death of annuitant had not been paid.
The LIC took the stand that it was unable to meet his demand in view of a specific condition that no annuity could be paid from the last date of payment till the date of the death of the annuitant.
The Commission observed that the condition mentioned in the policy amounted to “unfair trade practice”. That apart, if the deceased had opted for monthly annuity she would have obtained annuity up to the month preceding her death. Moreover, the policies were immediate annuity policies, that is, the first instalment was to be paid on the date of joining itself.
Dismissing a contention of the LIC that the Insurance Ombudsman had already rejected the petitioner’s claim, the Commission observed that the National Commission had already held that a decision by the Ombudsman was not binding on a complainant.