Handling of Surrender Claim Cases in PLI/RPLI - Standard Operating Procedure

Handling of Surrender Claim Cases in PLI/RPLI – Standard Operating Procedure (SOP) by Department of Posts vide OM dated 05.09.2023 

F.No.25-02/2023-LI
Ministry of Communications
Department of Posts
(Directorate of Postal Life Insurance).
Chanakyapuri P.O. Complex
New Delhi-110021

Dated: 05.09.2023

OFFICE MEMORANDUM

Sub: Standard Operating Procedure (SOP) for handling of Surrender Claim Cases in PLI/RPLI.

This is regarding issue of Standard Operating Procedure (SOP) for handling of Surrender Claim Cases of PLI/RPLI.

2. In order to expedite the process of settlement of Surrender Claim Cases, the SOP, containing the detailed procedure, action to be taken by different officers/officials at different stages, formats of Claim Form and other required documents etc, has been prescribed.

3. This SOP is aimed at streamlining the current process of handling of Surrender Claim Cases with uniformity across the country. It will provide clarity on procedures and action to be taken at different levels in case of Surrender Claim Cases and is expected to lead to settlement of these cases in a time bound manner.

4. The SOP is attached herewith for wide circulation among all officers/officials concerned with instructions to follow the same in letter and spirit.

5. Divisions/Regions/Circles are requested to kindly arrange half a day’s training on the SOP for the staff working in CPCs, for better understanding and implementation. Further, Circles may also kindly monitor the implementation of the new SOP and training of CPC Staff at WCTCs.

This issues with the approval of the competent authority.

(Mrinalini Srivastava)
Additional General Manager (PLI)

All CPMsG

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Standard Operating Procedure (SOP) for Handling of “SURRENDER” requests in PLI/RPLI Policies

Background

When a policyholder wants to surrender a policy, it is the duty of the Counter Staff at the Post Office and Agents to familiarize the policyholder about the important aspects to be kept in mind before processing a Surrender Request.

The key points are as under: –

• “Surrender Value” of a PLI/RPLI policy means the amount that is payable to an insured, when he/she foregoes the contingent benefit of his/her policy and surrenders it for an immediate cash payment, provided at least 36 premiums have been paid and the policy has completed a minimum duration of 36 months. The surrender value depends on various factors such as the type of policy, its term, premium paid, age at entry, age at surrender, applicable Surrender Factor etc.
• Policies that can be surrendered:
  (i) Whole Life Assurance (Suraksha and Gram Suraksha),
  (ii) Endowment Assurance (Santosh and Gram Santosh),
  (iii) Convertible Whole Life Assurance (Suvidha and Gram Suvidha) and
  (iv) PLI Joint Life Assurance (Yugal Suraksha).
• Policies that cannot be surrendered:
  (i) Anticipated Endowment Assurance (Sumangal and Gram Sumangal),
  (ii) 10-year RPLI Anticipated Endowment Assurance (Gram Priya) and
  (iii) Children Policy (Bal Jeevan Bima and Gram Bal Jeevan Bima).

Other Conditions

• A policy can be surrendered only if the duration of the policy is not less than 3 years, and it is in force till the end of the month in which the application for surrender is received.
• No bonus is payable for a policy surrendered before the expiry of 5 years from the date of acceptance of the policy. However, proportionate bonus shall be paid on paid-up value after completion of 5 years i.e., if a policy remains in force for at least 5 years.
• Only a policy in force (active policy, not lapsed) can be surrendered.

1. Determination of Surrender Value of a policy: –

1.1 The surrender quote for a PLI/RPLI policy can be generated through the system in any Departmental Post Offices (SO/HO/PLI-CPC) through the following option: Home screen of McCamish>Quote>Surrender Quote

1.2 If a policyholder wants to ascertain the surrender value through a Branch Post Office, then the BPM concerned may get the surrender quote generated through its Account Office or any SO or HO and handover the same to the policyholder.

1.3 It is further informed that Surrender value is calculated on reduced sum assured/paid up value. Paid up value = No of premium paid/total number of premium payable x sum assured. Surrender Value is equal to Surrender Factor x (paid up value+ proportionate bonus)

1.4 For “Policy in force”: – Surrender Value of a policy which is active, ie not lapsed can be ascertained by a policyholder through any Departmental Post Office (HO/SO). The Post Office shall hand over the Surrender Quote to the policyholder, which provides the calculated value as prescribed in the rules.

1.5 For “Lapsed Policies”: – PLI/RPLI policy in lapsed status cannot be surrendered.

2. Manner of submission of Surrender Application/Claim Form: –

2.1. The policyholder shall submit a Surrender Application/Claim Form in prescribed format (Annexure-I) which includes the Consent Form and required supporting documents (Annexures-II and III may be referred), at any Post Office counter or PLI CPC of HO. The Consent Form shall clearly specify that the Surrender Value as mentioned in the Surrender Quote, is acceptable to the policyholder, and that once the Surrender Value is paid, the policy cannot be restored.

In case policyholder is Medically Unfit

2.2 Incase a policyholder is unable to visit the Post Office, being medically unfit or outside India, for submission of Surrender Application/Claim Form (Annexure-I), he/she may authorize any person as a messenger for submission of the Surrender Application along with the necessary documents. Only an adult, literate person of sound mind, who is not an insolvent, can be appointed as a messenger.

2.3 Incase of being medically unfit to visit the Post Office, a self-attested medical certificate from a government hospital or government-accredited hospital to this effect needs to be submitted.

In case policyholder is Abroad

2.4 Incase policyholder is out of India, policyholder needs to submit a self-attested copy of passport clearly showing the date of departure from India through an authorized messenger along with other prescribed documents.

3. Action on Surrender Application at Receiving Office.

3.1. The policyholder will submit the following at any PO counter or CPC of HO:

(i) Surrender Application /Claim Form in prescribed format (Annexure-I),
(ii) All the required documents as detailed in point 3.5, and
(iii) Consent Form (as mentioned in Para 2.1 above) to the effect that he/she agrees to accept and receive the Surrender Value reflected in the Surrender Quote and understands that once a policy is approved for surrender or is surrendered, it cannot be restored.

3.2 The BPM/SPM/Postmaster (HSG-I/HSG-II)/Sr. Postmaster (Gr B) of HO/Dy. Chief Postmaster (Gr B)/AD (Gr B) of HO/GPO headed by Director or equivalent, or In-charge of CPC of the office concerned, where the Surrender Application/Claim Form is submitted, shall scrutinize the application to ensure that the requisite details are duly filled in and the relevant documents are attached. If required, the official concerned shall help the policyholder in filling up the application form correctly by guiding and explaining the requirements.

Documents to be Submitted.

3.3 All the ORIGINAL documents are required to be produced while submitting the Surrender Application/Claim Form. The same will be returned to the policyholder after they are compared with the copies thereof being submitted along with the Surrender Claim Form. However, the Policy Bond or Letter of Indemnity (Annexure-II) [to be submitted in the absence of original documents] shall be submitted in original along with the Claim Form and shall be retained by the receiving office.

3.4 Document of Credit or Premium Receipt Book, if applicable, would also be retained in original by the receiving office.

3.5 The following documents are required to be submitted along with the Surrender Claim Form:

Sl.	List of Documents	Cash Policy	Pay Policies
1	Surrender Claim Form (format at Annexure-I)	Yes	Yes
2	Consent of the policyholder to the effect of that the policyholder is agreed upon receiving the calculated surrender value	Yes	Yes
3	Original Policy Bond/Duplicate Policy Bond or Letter of Indemnity* (Format at Annexure- II)	Yes	Yes
4	Self-Attested copy of ID and Address proof of the Policyholder (list of Documents acceptable as ID and Address proof is given in Annexure-III)	Yes	Yes
5	Cancelled Cheque for Bank mandate or Self Attested copy of POSB passbook	Yes	Yes
6	Self-Attested Document of Credit, if any**	No	Yes
7	Premium Receipt Book***	Yes	No
8	Loan Receipt Books#	Yes	Yes

* Letter of Indemnity, if any, must be Notarised from a Public Notary on non-judicial stamp paper of value as prescribed in the State concerned.

** In case premium payment is not updated in Pay Policies, a certificate from the Employer about deduction of premia (DOC) and details/copy of pay recovery schedules shall be sent to the Department.

*** Tn case premium payment is not updated in Cash Policies, Premium Receipt Book is mandatory for updation in CIS System of premia paid by Policyholder.

# In case loan amount is shown outstanding in the Intimation Letter, whether it has been repaid partially or in full.

3.6 Wherever a self-attested copy of a document is submitted, the official accepting the same will compare it with the ORIGINALS and put his/her signature in token of having verified the copies with their originals.

3.7. The Office concerned will give an Acknowledgement (Part of Annexure-I) to the policyholder for receipt of the Claim Form.

3.8 Action at Branch Post Office (BO)– In case the Surrender Claim Form is received at BO, the BPM shall forward the Claim Form along with all the enclosures to its Account Office through Account Bag on the same day duly entered in their Daily Account/Daily Transaction Report (DTR) after Indexing it in the RICT device, if possible.

3.8 Action at Sub Post Office (SO)– The Surrender Application/Claim Form and enclosures may be received at SO either directly or through BO. In both cases, Indexing of the Claim Form shall be done at the SO itself (in cases Indexing has not already been done at BO for Claim Form received at BO). After Indexing, the Claim Form shall be sent to the HO (CPC) concerned (with which the office is mapped) on the same day through Account Bag duly entered in their Daily Account/Daily Transaction Report (DTR).

3.9 Action at HO (CPC) – The Surrender Application/Claim Form along with required documents may be received at CPC either directly or through SO/BO. Claim Form shall be indexed before further processing (if indexing has not already been done at SO/BO for Claim Form received at SO/BO).

4. Processing of Surrender Claim Form – Action at CPC on receipt of Claim Form

4.1 All documents received shall be marked in the Checklist (Annexure-V) by the CPC in-charge. In case any required document is found not submitted, a written communication (Annexure-IV) will be sent immediately by the CPC through Registered AD to the Policyholder requesting to submit the requisite document(s) within 15 days.

4.2 Once the document(s) is/are received, the Post Office (BO/SO/HO) will forward the same to the concerned CPC in the same way as the previous documents were sent. However, no indexing would be required in this case, as the same has already been indexed. It is to be ensured that Service Request Number is mentioned on each of the documents submitted.

4.3 Incase of non-receipt of requisite document(s) within 15 days, a reminder (Annexure VI) shall be sent to the Policyholder through Registered AD intimating that the case cannot be processed further if required document(s) are not submitted.

4.4 The CPC shall check to ensure that entries of all the documents are made correctly while Indexing, Scanning and Data Entry of the Surrender Claim Form along with all the enclosed documents.

4.5 Once the Surrender Application/Claim Form is found to be complete in all respects including receipt of required documents, the CPC In-charge shall take time-bound action to ensure timely payment of Surrender Claim.

5. Action at CPC by Approver/Approving Authority on receipt of Surrender Application: –

5.1 If sum assured of the policy is upto or equal to Rs. 20 lakhs: The Approver/Approving Authority shall be the Postmaster (HSG-I/HSG-II)/Sr. Postmaster (Gr B) of HO/Dy. Chief Postmaster (Gr B)/AD (Gr B) of HO/GPO headed by Director or equivalent of the Post Office in which the concerned CPC is functioning.

5.2 If sum assured of the policy is greater than Rs. 20 lakhs and upto or equal to Rs. 50 lakhs: The Approver/Approving Authority shall be Head of Division (Gr B /Gr A)/ Chief Postmaster (Gr A)/ Dy. Director (Gr A) of HO/GPO headed by a Director.

5.3. The Approver/Approving Authority shall go through the Surrender Application and shall approve/reject the case after examining the relevant documents by making appropriate remarks on the checklist (Annexure-V). A copy of the checklist is to be retained in the office of the Approving Authority. The physical documents received should go to the Approver/Approving Authority for scrutiny. However, approval/rejection shall be done in the system only.

5.4 In case of rejection, the reasons for rejection shall be stated in writing by the Approver/Approving Authority.

5.5 The concerned Approver/Approving Authority should ensure that the checklist is returned to the CPC duly signed along with his/her name, designation and date of on the checklist, after approval/rejection of the Surrender Application for further processing.

6. Action at CPC on receipt of Approval/Rejection of the Surrender Claim from Approver/Approving Authority:

6.1 Incase of Approval:

• • Sanction Letter shall be generated on the date of approval of request, as the case may be.
  • A copy of the Sanction Letter shall be sent to Postmaster (HSG-I/HSG-II)/ Sr. Postmaster (Gr B) of HO/ Dy. Chief Postmaster (Gr B)/ AD (Gr B) of HO/GPO headed by Director or equivalent, for crediting the sanctioned amount into the account of the policyholder, as per details submitted by him/her in the Claim Form. One copy of the Sanction Letter shall be sent to the Policyholder through Registered AD.
  • In case account details were not given by the Policyholder or any technical problem arises due to incomplete/wrong information about the account, a Crossed Cheque shall be drawn by the Head of HO [Postmaster (HSG-I/HSG-II)/ Sr. Postmaster (Gr B) of HO/ Dy. Chief Postmaster (Gr B)/ AD (Gr B) of HO/GPO headed by Director or equivalent] within a day of receipt of Sanction Letter. The Crossed Cheque along with one copy of the Sanction Letter shall be sent to the Policyholder through Registered AD on the same day.

6.2 Incase of Rejection:

• • If a Surrender Claim is rejected, CPC shall send Rejection Letter (generated through CIS system) to the policyholder through Registered AD by the next working day, giving him/her the reasons for rejection.

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