Udupi: Micro finance scheme - Main agents of LIC loot money from public

Pics by: Umesh Marpalli

Daijiworld Media Network – Udupi (JD)

Udupi, Jul 9: “The main agents of the Life Insurance Corporation of India (LIC) have looted the money collected by their sub agents under micro finance scheme in Chikkamagaluru district. The main agents are identified as Samanvaya organization and Shubhodaya organization, who have fled with the premium amount of more than 57,000 people,” said Dr Ravindranath Shanbogue, President, Human Rights Protection Foundation, Udupi.


Speaking to the media Dr Ravindranath said, “Samanvaya rural development, Shubhodaya rural development and Mukkaneshwari Yuvati Mandala were appointed by the LIC Udupi division as main agents for Kadur, Chikkamagaluru, Arasikere, Tarikere, Mudigere and N R Pura of Chikkamagaluru district. These agents had appointed many Anganawadi workers in various villages of the district as sub agents. The sub agents had to collect premium amount from the policy holders of villages. Samanvaya rural development, Shubhodaya rural development societies had also issued hand written receipts for the premium paid. But the premium money collected was not paid to LIC for the same by these rural development societies.”

“The LIC issued notices to the policy holders stating that their premium was not paid and policy will lapse. The micro finance scheme was a scheme of the Central government which aimed at increasing investment habits in rural people. Under this scheme, the policy holder was intended to pay Rs 600 per annum as premium amount for 10 years. At the maturity time, the policy holder will be getting a specified sum. But the main agents appointed by LIC Udupi division had only paid one or two premium amounts to the LIC. As the premium amount was not paid for subsequent premiums by these rural development societies, the policy holders received notices from LIC stating that their policies will get lapsed as the premium amount was not paid,” explained Dr Ravindranath giving the modus operandi.

Dr Shanubhogue further said, “In the beginning, Samanvaya rural development society was the sole main agent for the scheme. But within few months, employees of Samanvaya rural development society formed Shubhodaya rural development society, which was also appointed as the main agent within 15 days of its inception, which is against the clauses of the policy. The sub agents appointed by these rural development societies were working as premium collectors. They were given handwritten receipts, whereas a computerized receipt had to be given. More than 57,000 policies were sold in which 90% of policies are lapsed today. The sub agents are targeted in their villages as if they have done the fraud. In some cases, some sub agents have also lost their money, gold and other valuables. Some have paid partial amount of the money to the policy holders,”

As the policy holders were illiterate, it was easy for the rural development societies to loot their money. Dr Ravindranath Shanbouge also said, “The LIC officers of Udupi division are neglecting the issue. A case was filed in Tarikere and Kadur police stations. The LIC Udupi division provided some initial help to the police and then discontinued. After human rights protection foundation took up the case, LIC Udupi division filed a complaint against Shubhodaya rural development society in Gonibeedu police station,”

“Under the micro insurance clauses any agent representing LIC should be doing faithful business for the past three years. But in the case of Shubhodaya rural development society, the LIC had appointed it as main agent within 15 days of its inception. The LIC Udupi division also had felicitated officers of Shubhodaya society to sell more than 1310 policies in a single day. All these policies are now lapsed,” said Dr Ravindranath.

Human Rights Protection Foundation, Udupi had complained about this case in OMBUDSMAN and even to the then finance minister Arun Jaitley. The finance ministry had also agreed that a fraud had happened. But none of them took any serious action. The foundation then filed a suit in Karnataka state consumer court.

Annapoorna, one of sub agents, speaking to the media said, “We believed that LIC is a government organization and started working for it. But we never knew that these things would happen with us. We were told that we will be getting commissions. All the people in our villages are thinking that we have swindled their money. Even today, some are forcing us to give their money. We have given money to some people by taking loans from various sources. At times we feel like committing suicide.”

11 sub agents were present during the press meet.

At the same time, similar cases are reported from Belagavi and Mysuru regions of Karnataka and from Indore in Madhya Pradesh, Bhubaneshwar in Odisha and many other places.

Dr Ravindranath Shanubhoge has requested the people to report any similar cases, if taken place in and around their locality, to the foundation. He also requested the people not to ill-treat the innocent sub agents of their villages.


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