There has been a sudden spurt in such fraudulent calls, made on behalf of Insurance Regulatory and Development Authority of India (IRDAI), to policy holders promising hefty returns on some old life insurance policies or sanction of bonus if they surrendered their existing policy. The experience of K Venkat Rao, a bank employee, is a case in point. “I got a call from an unidentified person quoting IRDAI’s name. The caller even mentioned my insurance policy with the Life Insurance Corporation (LIC) of India. I was told that I can either surrender my policy or pay Rs 20,000 to get Rs 60,000 without any clarity,’’ he told BusinessLine .
The modus operandi is simple. Once you accept the offer, an agent will be sent to sell you an entirely new policy of any private insurer. Worse still, he will simply vanish with the initial payment which had happened in the case of a retired teacher. Promises of extra bonus and higher benefits are also made.
Invariably most of the calls do take the name of either IRDAI or LIC and also drop the name of a private insurance player.
The fraud takes place at two levels. One is mis-selling when the insurance policy is sold under false information. Second is the monetary angle where the ‘agent’ vanishes with your money without giving you a receipt. LIC has been a major victim, as in most cases people were made to surrender their LIC policies and buy a private life insurer’s policy. LIC had also launched a massive campaign against spurious calls, said an official.
IRDAI Worried
When contacted, Sriram Taranikanti, Executive Director, IRDAI, said: “The recent spurt in spurious calls is a matter of concern. The authority has already taken a host of measures in educating policyholders about the fact that IRDAI will never call or advise on purchase and surrender of any policies.’’ All insurers have also been instructed by IRDAI to specifically mention this point in all their promotional campaigns. IRDAI has also recently launched campaigns in the electronic and print media.
In addition, if an agent or intermediary sells policy of an insurer with false promises, the insurers have also agreed to return and entire money that had been fraudulently collected.
Complaints on unfair business practices such as spurious calls accounted for 56 per cent of total complaints of over 3.74 lakh received last year compared to 49 per cent during the previous year, as per IRDAI data.