SECP directed to ensure availability of UAN, websites with insurance companies

LAHORE: An Insurance Tribunal has directed the Securities and Exchange Commission of Pakistan (SECP) to ensure availability of Universal Access Numbers and websites with insurance companies to answer policyholders’ questions.

It has also directed the insurance companies to appoint qualified insurance agents who can explain the policy terms and conditions to prospective policyholders.

In a recent case, which relates to the surrender claim of the policy, the policyholder claimed that she was not properly explained the terms and conditions of the policy at the time of selling the policy. The relevant insurance company also failed to produce training certificates of the agent during the proceedings.

After paying premiums for six years, the policyholder applied for surrender of the policy to fund their daughter’s marriage. However, the insurance company paid only one third of the claim while leaving the balance unpaid.

The policyholder argued that she had fully complied with the policy terms and conditions by paying premiums regularly and was therefore entitled to the surrender amount along with damages.

The Insurance Tribunal ruled in favour of the policyholder, directing the insurance company to pay the surrender amount along with damages.

The tribunal also emphasized the importance of insurance companies appointing qualified agents who can explain policy terms and conditions clearly to prospective policyholders.

It has further ruled that insurance companies must communicate clearly and transparently with policyholders throughout the policy cycle. This includes providing regular updates on the status of the policy, the creation of statutory funds, and the investment of premium amounts.

The Tribunal also emphasized the importance of using plain language in policy documents, so that policyholders can easily understand the terms and conditions of their policy.

Additionally, the Tribunal directed insurance companies to provide detailed illustrations of the policy benefits and terms, ensure that policyholders understand the policy terms and conditions before purchasing and invest premium amounts in companies with a high credit rating to protect the interests of policyholders.

The Tribunal also ruled that insurance companies must comply with the mandatory provisions of the law, and that failure to do so would have serious consequences.

Copyright Business Recorder, 2024