Insurance Ord (Amend) Bill, 2020: Revision in jurisdiction, powers of Insurance Ombudsman proposed

ISLAMABAD: The Insurance Ordinance (Amendment) Bill, 2020, has proposed revision in the jurisdiction, functions and powers of the Insurance Ombudsman, and empowering of the Wafaqi Mohtasib (Ombudsman) or the Federal Tax Ombudsman (FTO) to work as an Insurance Ombudsman.

According to the Insurance Ordinance (Amendment) Ordinance, 2020, till such time, the Acting Insurance Ombudsman is appointed, the Wafaqi Mohtasib (Ombudsman) shall act as Insurance Ombudsman of the concerned office, and in case, the Wafaqi Mohtasib is absent or unable to perform functions of his office, the FTO shall act as Insurance Ombudsman.

Any vacancy occurring in the office of the Insurance Ombudsman shall be filled within 60 days of the occurrence of such vacancy, it added.

Under the draft Insurance Ordinance (Amendment) Bill, 2020, the Insurance Ombudsman may on a complaint by any aggrieved person undertake any investigation into any allegation of the following on the part of any insurance company: (a) mal-administration; (b) any partial or total repudiation of claims by the insurance companies; (c) dispute with regard to premium paid or payable in terms of the policy; (d) dispute on the legal construction of the policy wordings in case such dispute relates to claims; (e) delay in settlement of claims; and (f) non-issuance of any insurance document to customers after receipt of premium.

Provided that the Insurance Ombudsman shall not have any jurisdiction to investigate or inquire into any matters, which is sub judice before a court of competent jurisdiction or tribunal or board in Pakistan on the date of the receipt of a complaint, reference or motion by him.

For the purposes of this section "mal-administration" includes - (a) a decision, process, recommendation, act of omission or commission, which: (i) is contrary to law, rules or regulations or is a departure from established practice or procedure, unless it is bona fide and for valid reasons; or (ii) is perverse, arbitrary or unreasonable, unjust, biased, oppressive, or discriminatory; or (iii) is based on irrelevant grounds; or (iv) involves the exercise of powers, or the failure or refusal to do so, for corrupt or improper motives, such as, bribery, jobbery, favouritism, nepotism, and administrative excesses; and (b) corruption, nepotism, neglect, inattention, inordinate delay, incompetence, inefficiency and ineptitude in the administration or discharge of duties and responsibilities.

Insurance Ombudsman shall not accept for investigation any complaint, which is brought by or on behalf of an insurance company, and which relates to a contract of reinsurance.

The Insurance Ombudsman shall not accept for investigation any complaint by or on behalf of an employee of an insurance company concerning any matters relating to the insurance company in respect of any personal grievance relating to his service therein. For carrying out the objectives of this law and, in particular for ascertaining the root causes of corrupt practices and injustice, the Insurance Ombudsman may arrange for studies to be made or research to be conducted and may recommend appropriate steps for their eradication.

Under the proposed law for the appointment of Insurance Ombudsman, the president shall appoint an Insurance Ombudsman entrusted to discharge the functions vested upon him through this Ordinance.

The Insurance Ombudsman shall be a natural person having high integrity and ability and unimpeachable insurance or legal credentials.

He and his spouse shall not be a shareholder of an insurance company.

The Insurance Ombudsman shall hold office for a period of four years from the date of his appointment, unless he resigns earlier in writing under his hand addressed to the President, or is disqualified or removed in accordance with Section 5 of the Act.

He shall not be eligible for any extension of tenure or for reappointment under any circumstances whatsoever.

Provided that the Insurance Ombudsman shall continue to hold office after expiry of his tenure till his successor enters upon the office.

Provided further that if at any time when the office of the Insurance Ombudsman is vacant or he is unable to perform his functions due to any cause, the President shall appoint an Acting Insurance Ombudsman who shall perform functions and exercise powers as are vested in the Insurance Ombudsman, and shall be entitled to all privileges as are admissible to the Insurance Ombudsman.

As per proposed changes, the terms and conditions of the Insurance Ombudsman shall be governed under the Insurance Ordinance (Amendment) Act, 2020, and as revised from time to time, the proposed law added.

Presently, Insurance Ombudsman shall be entitled to the same salary and allowances as a judge of a High Court.

The Insurance Ombudsman may at any time resign his office by giving written notice to the Commission of not less than three months.

The Insurance Ombudsman shall be disqualified from holding his office and his appointment may be revoked if: (a) he has been convicted of an offence involving moral turpitude; (b) he has been guilty of misconduct; (c) he has been or is adjudged insolvent; (d) he is incapable of discharging his duties by reason of physical, physiological or mental unfitness and has been so declared by a registered medical practitioner appointed by the Commission; (e) he is disqualified by virtue of holding an office (other than that of Insurance Ombudsman) for which he receives remuneration; or (f) he fails to discharge diligently or impartially his duties under this Ordinance: Provided that, unless a disqualification referred to in this subsection arises from the judgement or a court or tribunal of competent jurisdiction under any relevant provision of applicable law, the appointment of an Insurance Ombudsman shall not be revoked without an enquiry by an impartial person or body of persons constituted in accordance with such procedure as may be prescribed by rules made by the Federal Government, and such rules shall provide for a reasonable opportunity for him to be heard in his defence.

The Insurance Ombudsman shall be provided with a Secretariat to be appointed in consultation with the Commission.

Appointments to the Secretariat may be made on deputation from the Commission or other insurance companies or otherwise, on the basis of professional qualifications.

The cost of the Secretariat shall be shared by insurance companies in such proportions as may be determined by the Commission.

Copyright Business Recorder, 2020