Steps to address a mis sold insurance policy

Dealing with mis-sold insurance policies can be a frustrating and financially burdensome experience. Whether you’ve been sold a policy that doesn’t meet your needs or were misled into buying policies with false promises, it’s essential to know what you should do next. In this guide, we’ll outline some steps to help you navigate the process and seek a resolution that aligns with your insurance needs and legal rights.

But before understanding the steps, let’s check out a similar case where two insurance agents mis-sold insurance policies to Mr. Alok Darshan Chatterjee, providing wrong information and false hope. Read along to know what happened next:

Alok Darshan Chatterjee (Complainant) Vs ICICI Prudential Life Insurance Co. Ltd (respondent)

Complainant Alok Darshan Chatterjee, a senior citizen, was approached and convinced by two Insurance agents (O.P 1 and O.P 2) from ICICI Prudential Life Insurance to buy a one-time premium paid policy for his grandson. However, when he received the insurance papers, he realized that the policy was a term insurance policy where a premium must be paid annually or half yearly for the specified period and in no way matches what Opponent Parties 1 & 2 had assured him.
Mr. Chatterjee contacted the Insurance company and requested both the Opposite Parties to correct the policy. However, both O.P.s did not pay any heed. When nothing fruitful happened, he lodged a complaint before the Vigilance Department, the Commissioner of Police, Kolkata and the Consumer Affairs Department redressal. But got no results.

Eventually, Mr. Chatterjee filed a complaint before the District Forum, hoping for justice. Opponent Party 1 contested the case by submitting a memorandum of understanding (MoU) between the complainant and Opponent Part 1, which mentioned that the disputed policy had been rectified and the complainant had no complaints against any of the Opposite Parties. Hence, the O.P.1 requested that his name be removed from the case.

Opponent party 2 contested the case by filing a WV in which he denied the complainant’s allegations. He stated that he was not connected with purchasing the specific policy. It was also revealed that Mr. Chatterjee had purchased two other policies from Opposite Party 1 for his son and daughter-in-law through Opposite Party 2 which were still in effect. Opposite Party2 provided evidence, including a questionnaire and requested that the case be dismissed.

The complainant argued that O.P. 2 pressured him to buy two other policies of the same amount to correct the previous policy to a one-time one. Mr. Chatterjee succumbed to the pressure and bought two other policies for his son and daughter-in-law that are still active.

After careful evaluation, the Forum decided that Opponent Party 1 and 2 had deliberately misrepresented the policy to Alok Darshan for personal gain and, indeed mis-sold the insurance policy to the complainant to earn a high commission.

In response to these findings, Opposite Party1 and Opposite Party2 were instructed to pay compensation of Rs. 5000 each to the complainant for the distress, harassment, and financial losses they caused. Furthermore, both of them were required to pay an additional amount of Rs. 3000 each to the complainant as a penalty for engaging in unfair trade practices, with a deadline of 30 days from the date of the order issued.

How to address mis-sold insurance policies?

If you are duped by an insurance provider, follow the steps below and seek redressal.

• Collect evidence of mis-selling. Compile supporting documentation that proves the case of mis-selling of insurance policy. This may include call recordings, emails, text messages, or documents demonstrating that you were deceived into purchasing an insurance policy against your intentions. Gathering these pieces of evidence is pivotal in building a strong case against the mis-selling incident.

• File a complaint about the mis-selling of an insurance policy. After collecting sufficient evidence, you can bring it to the attention of the insurance regulator, file a lawsuit against the insurance company concerned, or seek help from online complaint platforms.

• According to legal regulations, the insurance service provider must address your complaint promptly after receiving it.

• If the complaint gets rejected, the complainant can appeal to IRDAI again. This can be done multiple times until justice is served.

If you are facing a similar issue with a mis-sold insurance policy, contact the subject matter experts at Bima Seva for guidance.