New Delhi: In a bizarre case, state-run insurer Life Corporation of India (LIC) has sold almost 18,330 policies in a day to the staff of IDBI Bank, gathering premium worth Rs 50.20 crore.
The insurer launched a bancassurance business scheme on March 1, in partnership with the bank, targeting a premium mop-up of Rs 200 crore by March 31 in the current financial year (FY19) and Rs 1,000 crore in the fifth year. However, in the first day of its launch, the public sector insurer, which recently acquired a majority stake in IDBI, sold over 12,000 policies in the initial hours of launch, collecting over Rs 43 crore in premiums. By the end of the day, the number of policies sold crossed 18,000.
“All the staff members of IDBI Bank have been asked to compulsory buy the LIC policies in almost all zones of the bank. The LIC bancassurance products were launched in IDBI Bank on the very first day of March 1…Against the target of 12,000 policies, the bank found that almost 18,330 policies were sold, collecting a total premium of `50.20 crore,” a top IDBI source told Financial Chronicle, adding that the “officers and the poor staff ” of the bank were forced “to buy unwanted policies.”
This, the source said, is a fit case of mis-selling an LIC product because all the LIC agents put together across India could not have achieved such a feat as per the insurer’s target.
When contacted, a senior official of LIC declined to comment on the matter. On February 16 this year, the zonal manager of IDBI Bank’s east-central zonal office was directed by one of the managing directors of LIC to focus on the bancassurance business under the LIC-IDBI Bank partnership plan.
“As LIC has completed the acquisition of 51 per cent stake in IDBI Bank early this year, the bancassuarance would be a main focus area of LIC in the partnership. We are planning to launch the bacassuarance business on March 1, 2019 in IDBI Bank branches,” the managing director said in a communication.
“Our understanding with the bank is that it will bring in Rs 200 crore of premium, Rs 1,000 crore premium in the fifth year. The mapping of all 1,890 branches of IDBI with 1,232 branches of LIC has been completed, based on the details received from each zone,” he said....