CRM Department, Central Office. 3rd Floor (West Wing), “Yogakshema”, Jeevan Bima Marg, P.O.Box No.

19953, Mumbai – 400 021. Tel : 66598353, Fax : 22825829 E-mail :

Ref: CO/CRM/ 793/23 To All Zonal Managers All Sr./Divisional Managers, MDC, ZTC, Audit & Inspection. RE: One –Time Program for Re-instatement of Foreclosed ULIP Policies JULY 12, 2010

The policies under Unit Linked Insurance plans (ULIP) get foreclosed as per policy conditions when the unit value in policyholders unit account goes below the defined minimum unit value as per various ULIP plans. Many of the times ULIP policies are getting foreclosed where the policyholder has taken this policy at higher age with high Sum Assured and comparatively with low instalment premium. As per terms of the policy condition, once a ULIP Policy is foreclosed, it cannot be re-instated. We have received lots of complaints from policyholders against such foreclosure of policy without giving any pre foreclosure intimation/alert letter, though the foreclosure was as per policy condition. We have therefore, vide our circular Ref: CO/CRM/747/23 dated 20th May 2009, started sending Pre-Foreclosure Intimations/ alert letters. All offices should ensure that alert letters generated at CUS, Divisional Office should be sent to the policyholders regularly without any default. We have reviewed the matter at our end, it has been decided by the Competent Authority to allow re-instatement of ULIP Policies (except Health Insurance Plans 901 & 902) subject to certain conditions. This one time reinstatement will be allowed from 9/7/2010 to 31/10/2010 only. A. Basic Rules for Re-instatement – 1. ULIP policies eligible for Reinstatement a) which were foreclosed during the period of 2 years from 01.07.2007 to 30.06.2009 ( both days inclusive) AND b) where the date of Foreclosure was before the Date of FUP+ Grace Period AND c) Where Balance in Policyholder’s Unit A/c. (balance SV) has not been refunded to the policyholder after foreclosure. 2. The Re-instatement shall be subject to normal revival requirements like DGH, Medical & Special Medical Reports as per Total SUC under all such policies to be re-instated, taken together, and as per the existing rules for the particular product. If the policyholder opts for reduction in Basic sum assured or CIR sum assured, then revival requirements will be called accordingly. Decision of Re-instatement shall be taken at BO/DO/ZO Level according to the SUC. However actual Re-instatement shall be carried on at the Servicing Branch only.

the policy shall be treated as Re-instated. the quotation will consider the balance SV available after foreclosure. However the same shall be charged prospectively – a) From the month current of the re-instatement. .A. 6.188. a) Payment of Top-Up Premium (Except under plan.B. Consequently D. 10. 8. There is no provision to reduce the instalment premium. all subsequent charges shall be regularly recovered in terms of units from time to time which shall be based on the revised terms of Reinstatement. Accident Benefit Charges. After payment of Premiums/top-Ups for re-instatement. e) To reduce both A. Switch Over and Surrender Requests shall not be accepted and processed before the fresh allocation is completed.. 5. Consideration amount for reinstatement of ULIP foreclosed policy will be payment of outstanding premiums without any interest upto date of reinstatement. the balance S V should be refunded to the policyholder subject to policy conditions of refunding balance surrender value.187. (subject to the minimum stipulated under the plan). In case of Plan 173-Jeevan Plus if Policyholder’s Deficit A/c is operated earlier then the same shall be considered at the time of Quotation. Once Re-instatement is effected. b) For the Sum Assured (Original/Revised) of Basic. 11. shall however be recovered for the full period from the date of Foreclosure to the Date of Re-instatement.B. c) to reduce only A. note that after exercising any one option out of (a) to (e). (Units monetized as on the date of foreclosure). No reinstatements shall be allowed after 3 months from the date of Notice. Sum Assured & CIR Sum assured if any shall also get reduced to the level of the reduced Basic S. 9. limit stipulated under the plan).A. Accident benefit. & C.A.B. All other Charges. No further re-instatement will be allowed once a policy is so re-instated. Sum Assured (either fully or partly ) d) To reduce only CIR Sum assured (to the extent minimum S. c) According to the Extra Premium at the time of Re-instatement. Kindly. 7. There would not be any Alteration Charges for Re-instatement either with or without reduction in SA/DAB/CIR.180.I. Critical Illness rider. f) The reduction in SA/DAB/CIR opted shall be effective immediately from the date of re-instatement. Sum Assured as above but without reducing the Basic Sum assured. Critical Illness Benefit Charges and Service Tax thereon shall NOT be charged for the period from the date of Foreclosure to the Date of Re-instatement. following options shall be available to the policyholder.A. 4. the recovery of Mortality Charges including extra premium would be based on the age of the policyholder at the time of recovery from time to time. If a policyholder has not opted for Re-instatement or is not in a position to get the policy re-instated within this period. the instalment premium will not be reduced.……………… 2 ……………….193 ) b) To reduce the Basic S.R. The Mortality Charges. if any. While considering re-instatement of the policy. 3. Besides this.

branch should confirm that all the changes in respect of sum assured.) If the period stated in quotation is short. Every Zonal office should ensure that the related activities are carried out by Divisions within stipulated time period. Process Flow for Re-instatement of Foreclosed ULIP Policies. giving the transaction no which is appearing on final quotation.6 of Branch single window . 7. then policyholder should be advised to reduce the sum assured. As per new parameters and revival decision.1 of CUS. A message stating that the policy will be in force for at least ……months will appear in the quotation. or to modify the EMR class extra or to include top up premium as per the requirement in quotation itself. 8.2.foreclosure of policy for longer period. S.B. A Branch-Wise List shall also be printed through this option which may be supplied to Branches. Branch should advise policyholder to reduce the sum assured or to pay the top up premiums. then policyholder should be advised to pay top up premium equal to amount of 1 or 2 annual premiums. Once ratification is done. 4.………… 3 ………………. However.2. extra premium. the Instalment Premium amount and the Total Outstanding Premiums Amount would not get changed.2. 2. if available under the plan. If top up premium is not allowed under the plan. no change shall be allowed .7 of Branch single window. at the Branch. top up premium have been effected in quotation. Manager (CRM) should ensure that the letters are printed and dispatched on or before 31/7/2010 as the extraction of letters will be allowed up to this date only.B. 6. system will calculate the various charges to be recovered from date of foreclosure to date of reinstatement and further charges to be recovered up to next 3 years assuming that premiums for next 3 years will be paid by the policyholders.1. 3. . (Details of options as per 3 of basic rules of reinstatement. The branch should collect the revival requirements as per chosen/ current sum assured ( SUC) and should take the revival decision accordingly. Before ratification. Taking into account the months stated in the message. There will be options to modify the sum assured. Branch should obtain the signature of life assured on the ‘consent-cum-quotation letter’ .The Branch has to take utmost care before doing the ratification. 5. This Option for generating Re-instatement Quotation shall have a facility to tentatively modify basic sum assured / Accident benefit sum assured/ CIR sum assured and print the Revised Quotation as many times as required.2. the Branch should generate the reinstatement quotation through Option S. say less than 2 years.1. the quotation will be printed with the transaction number. If policyholder approaches the Servicing Branch Office. At DO-ULIP Server (CUS) extraction of all eligible cases as per the conditions specified above will be done and the individual letters will be generated through option E. From the outstanding premium amount collected as consideration amount as per quotation. The reinstatement quotation has to be ratified through Option No. This will ensure the continuation/ non.R. 1.

Outstanding Premium/s and / or Top-Up Premium shall be accepted as per the Updated Quotation.R. Option E. 4 ……………… 9. but policy status will be changed to in force only after U-1 option is run at Division-CUS.2 in the Divisional Office. Executive Director (CRM) . 13. All these letters shall be printed and sent by Registered Post only by the Divisional Office. 12. Any inconsistencies shall be immediately brought to the notice of SDC through IT Depts of DO/ZO. Simultaneously an Entry for Re-instatement and recovery of flat charges effective from the date of foreclosure to the date of re-instatement will be written in the Fund Files at CUS. FUP will be updated after collection of premium amount. either in Cash or by way of Demand Draft only. Final Confirmation letter. 10.3 at Divisional office CUS will be provided to generate statistics regarding reinstatement of the policies for any given period. All the Divisions and all the Branch Offices are requested to note the above instructions very carefully. The Cash Transaction will be processed for Unit Allocation at CUS after getting the respective NAV [ based on the date and time of the cash transaction as per existing rules] 11.…………………. After this.R.cum. The copy of these letters should be forwarded to respective branches for incremental scanning or filing in the docket if scanning of the docket is not yet over. Divisions should educate the Branches about the procedure of reinstatement of ULIP policies.endorsement for Re-instatement shall be printed through option E.

the Life Cover & such other charges under a ULIP Policy get increased year by year as the age advances. There were _____ units under ________ Fund to the credit of the policy at the time of foreclosure.L. reduced to some extent [ subject to the minimum allowed S. In order to avoid this.C. subject to certain requirements. Thanking you Yours Sincerely. Please note that unlike other policies. Consequently more and more units shall be required for recovery of such charges. if considered favourably. in addition to the payment of arrears of premium. Critical Illness Benefit and Service Tax thereon for the period from the date of foreclosure to the date of re-instatement. Dear Sir / Madam Re. Kindly note that this offer is available for a period of 3 months only. We are pleased to inform you that we shall consider re-instatement of the above policy. On receipt of the same and on favourable consideration of the request for re-instatement all arrears of Premiums and Top-Up Premium if any. No request for reinstatement shall be entertained thereafter. Divisional Manager (This being a computer generated letter signature of the correspondent is not required) . Also. Sd/ Sr. shall be accepted at the Cash Counter in Cash or by way of Demand Draft.Your ULIP Policy No.____________________ which was foreclosed on ___________ Your above policy was foreclosed on ____________ as per policy conditions. shall be allowed as a One Time Special Case only. A letter of confirmation of Reinstatement shall be separately sent to you.A. Accident Benefit. we shall also waive the charges for Life Cover.Proforma of Notice to be generated for Re-instatement of a ULIP policy ---------- -----.[ Divisional Office-----------] To. under the plan]. Double Accident Benefit and the Critical Illness Benefit. As a special gesture on our part. Date_____________ Name of Policyholder Address of Policyholder. of India ---. (This is required to avoid further complications in case of Cheques Dishonours). it is advisable to keep adequate Top=Up Premiums paid ( if allowed under the plan) or to get the Sum Assured for the Life Cover. whenever there is a drastic fall in the NAV. Receipt for the amount paid by you shall be immediately issued. You are therefore requested to immediately approach your servicing Branch for necessary guidance and submit all the requirements. The re-instatement. there is always a possibility of the policy getting foreclosed.I.

___________ To. No. I understand that the Re-instatement of the above policy shall be allowed as a special case and without any precedent only and it shall not supersede the existing policy conditions about Foreclosure / Cancellation of the policy.______________ Re :./Br.Proforma . Available before Foreclosure Basic S. Manager Br.A. for Critical Illness Benefit Class of Extra Premium Any Other Conditions On Re-instatement Kindly re-instate my above policy. Yours faithfully.A. S. Chief / Sr. I am however agreeable to the following revision in policy conditions.____________________ which was foreclosed on ___________ This is with reference to the letter dated ___________ received from the Divisional Office ___________for Re-instatement of my above ULIP Policy. I have submitted necessary revival requirements.A. for Double Accident Benefit S.consent letter for the terms & conditions for Re-instatement of ULIP Policy No. Place :-________ Date :-__________ Signature of Policyholder .Re-instatement of ULIP Policy No.

applicable as on the date of Re-instatement Total Fund Value as on the date of Re-instatement All other terms and conditions under the policy.Proforma of Letter to be generated confirming Re-instatement of a ULIP policy --------- -----. Accident Benefit.[ Divisional Office-----------] To. as Life Cover & such other charges under a ULIP Policy get increased year by year as the age advances. Divisional Manager (This being a computer generated letter signature of the correspondent is not required) . Please note that the following particulars. Please keep this letter attached to your policy which shall now form a part of the policy.____________________ which was foreclosed on ___________ Ref:. Critical Illness Benefit and Service Tax thereon for the period from the date of foreclosure to the date of re-instatement. Also. more and more units shall be required for recovery of such charges. Any request for Switch-Over or Surrender shall be accepted on and from the working day next to the above date of Re-instatement. for Critical Illness Benefit Class of Extra Premium Next Premium Due Date Any Other Conditions Balance of Units Fund type N. there is always a possibility of the policy getting foreclosed. Dear Sir / Madam Re. We shall again remind you that. for Double Accident Benefit S. Date_____________ Name of Policyholder Address of Policyholder. All the charges shall henceforth be regularly deducted from the units under your policy.A. of India ---. S. You are requested to keep track of the number of units and the NAV and ensure that sufficient balance of units under the policy is maintained. from the date of Re-instatement. Sd/ Sr.L.I. which are applicable to the above policy.Your ULIP Policy No.C.A. we have waived the charges for Life Cover. including those about Foreclosure / Compulsory Surrender remained unchanged.A.V. On Re-instatement Basic S. whenever there is a drastic fall in the NAV.---------.Our earlier Letter dated ______________ We are pleased to confirm that your above policy has now been re-instated on __(Date)__&__( Time)___ as a Special case. Also as a special gesture on our part.A.

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