Misappropriation of LIC funds by Samanvaya case filed

Misappropriation of LIC funds by Samanvaya case filed

Udupi: Ravindranath Shanbhogue and 9 LIC sub-agents alleged that non-governmental organization appointed by LIC have misused the premium collected from the policyholders of micro-insurance products of Life Insurance Corporation.

Speaking to Mediapersons on October 24, Ravindranath Shanbhogue said that the non-governmental organizations namely Samanvaya appointed by the LIC as authorized agents in Kadoor, Tarikere of Chikkamagaluru district to sell micro-insurance products, collected premium from policyholders and did not deposit the same with the LIC. Members of the self-help groups, Anganwadi workers who worked as “specified persons” in the rural areas to collect the premium on behalf of the NGOs, have been facing the Ire of frustrated policyholders every day.

As per the records, only one or two installments of the premium were paid to the LIC and some of the claims were also rejected for this reason. Surprisingly, we found that every policyholder, whose policy had lapsed, had receipts for their payment of the premium for all these years! Further, all these receipts carried the LIC’s official logo.

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These NGOs have collected lakhs of rupees from MI policyholders through their Sub-agents. Prima facie, it has come to our notice that the sub-agents by and large collected the premium, recording the same in the register as specified in the “Deed of Agreement”. The sub-agents had handed over the cash as well as DDs, from time to time, to the respective MI agents as per the procedure prescribed by LIC.

Everything was going on well till some MI claims were rejected on the grounds that the policies had lapsed due to non-payment of premium. This came as shock to the poor sincere policyholders and equally sincere sub-agents. As per the Human Rights Protection foundation investigations, the cash handed over to the MI agent by sub-agents were not transmitted further to the LIC and DDs were adjusted to some other policies defrauding the LIC, sub-agents, and policyholders as well.

Most of the policyholders were illiterate, innocent villagers and believed that the sub-agents have pocketed the amount paid by them towards MI premium. The sub-agents who are mostly Anganwadi Teachers are not in a position to show their face to the public for fear of being manhandled and beaten by irate policyholders. Most of these sub-agents were forcibly made to refund the amount to the policyholders to the tune of Rs one lakh to Rs 3 lakhs in order to remain in the villages. Some sub-agents have taken the loan from private banks and pawnbrokers by pledging their jewellery to pay the policyholders. Some have even sold small pieces of land they had owned. This has driven most of them to disappointment and disgust in life due to the financial crunch.

It is unfortunate that the MI policyholders have lost their faith in the LIC. They are disappointed that neither the agents nor the LIC has come to their rescue when they were in trouble. At any cost this faith has to be restored for which we promise our full support, said Shanbhogue.

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When the foundation contacted the LIC Udupi division they said that FIRs were filed in police stations at Arasikere and Chikkamagaluru. The MI agents have defamed LIC and cheated MI policyholders at least to the extent of Rs 1.75 crore in the Udupi division.

Though we are certain that the LIC is not involved in the fraud, we feel that after launching the schemes, somewhere it has lacked in their duty of supervising and monitoring its agents. This systemic failure has lead to such a big fraud.

The Foundation observed that many of the defrauded poor Anganwadi teachers (sub-agents) are psychologically depressed and may end up in committing suicide. If any one of them takes up such recourse then it may go viral and result in a greater disaster affecting the better-earned fame and blemishless image of LIC. At any cost, people’s faith in this great national institution should not be lost.

Ravindranath Shanbhogue demanded that the LIC should without wasting any time, take up the matter with the higher management at the central office level. He also demanded that the LIC should settle the claims of MI policyholders whose premium has not reached LIC as a consequence of systemic failure. The LIC should make good the amount to sub-agents (MI specified persons), who have refunded the amount from their own pockets. The LIC should take legal/criminal action against the fraudulent persons / agents involved therein, he said.

Sub-agents Kumar, Nagaraj, Srinivas Moorthy, Laxmi Kadoor, Jaya, Geetha Annapoorna, Nagarathna expressed their pain before the media persons and said that the LIC was equally responsible for the misuse of the premium amount but was refusing to admit it.

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“The majority of the policyholders are farmers and petty shopkeepers in rural areas, and ‘specified persons’ are worried. The policyholders hold the ‘specified persons’ responsible for the mess and are demanding that they return their money immediately. My relatives, friends, and neighbours took the policies having faith in me and the LIC brand. Now, I have to face the ire of the policyholders every day, said Sumithra, an Anganwadi worker at Kadoor in Chikkamagaluru, who has been working as a specified person”.

Micro-insurance products were introduced by the LIC as per the Insurance Regulatory and Development Authority (Micro-Insurance) Regulations 2005. These products are sold through agents, who can be non-governmental organizations, self-help groups or micro-insurance institutes.

These agents, in turn, appoint “specified persons” to sell the products and collect the premium. In many places, Anganwadi workers are appointed “specified persons”. They collect premiums and pay it at the cash counters set up by the NGOs (MI-agents). It is the responsibility of the NGOs to deposit the premium with the LIC.

When media people contacted the senior divisional Manager LIC Udupi Division, Vighneshwar RaoKadoor and we filed complaints against the Samanvaya NGO. The NGO was appointed according to IRDA Regulations 2005 norms. We have Suspended the agency and withdrawn all the powers and provision granted to them. These facts have been brought to the notice of the General public through Public Notice in Daily Newspapers of Chikkamagaluru district. We have provided all the records to the police department. Now the police are handling the case and investigation is on, he added.