Delayed PLI policyholders funds: IHC seeks replies from two ministries

ISLAMABAD: The Islamabad High Court (IHC) directed the Ministries of Finance and Communications to submit their replies to a petition seeking the protection and restoration of Rs 48 billion in Postal Life Insurance policyholders’ funds.

A single bench of IHC comprising Justice Arbab Muhammad Tahir on Thursday heard the petition of the Judicial Activism Panel (JAP) which approached the court through a public interest constitutional petition concerning the alleged withholding, non-transfer and non-payment of funds belonging to thousands of Postal Life Insurance (PLI) policyholders across Pakistan.

During the hearing, the counsel raised serious questions regarding the fate of approximately Rs 48 billion belonging to policyholders, including government servants, retired employees, pensioners, widows and other citizens who invested their hard-earned savings in Postal Life Insurance policies.

He sought judicial intervention to protect the rights of policyholders whose matured insurance claims have reportedly remained unpaid or delayed on the grounds of non-availability of funds. The petitioner highlighted the position that PLI officials and the federal minister for Communications have reportedly acknowledged that the funds are lying with the Finance Division, while policyholders continue to face difficulties in receiving their legitimate contractual entitlements.

The petition relied upon the Auditor-General of Pakistan’s Special Study Report 2022–23, which identified serious financial and administrative issues in the conversion of Postal Life Insurance into Postal Life Insurance Company Limited (PLICL). According to the report, Rs 8 billion was released by the Finance Division during 2021–22, out of which Rs 3.1 billion was utilised for claim payments, while Rs 4.9 billion was surrendered. The report also highlighted unsettled claims amounting to approximately Rs 7.99 billion and non-transfer of premiums collected by Pakistan Post.

The petition also raised fundamental constitutional questions concerning the legal ownership, custody and utilisation of policyholders’ funds. It contended that premiums collected under individual insurance contracts cannot automatically be treated as federal government revenue under Article 78(1) of the Constitution and that such amounts, if received by or on behalf of the federal government, fall within the scope of the Public Account under Article 78(2). It further sought disclosure of the Federal Cabinet’s decision, vesting orders, actuarial valuation and all relevant documents concerning the transfer of the PLI portfolio to PLICL.

The Judicial Activism Panel also questioned the failure of the concerned federal institutions, including the Finance Division, Ministry of Communications, Pakistan Post, Auditor-General of Pakistan, Controller General of Accounts and Securities and Exchange Commission of Pakistan, to ensure transparency, accountability and protection of policyholders’ interests. The petition invoked Articles 4, 9, 23, 24, 25, 78, 169–171 and 199 of the Constitution, alongside relevant provisions of the Insurance Ordinance, 2000.

The petitioner maintained that matured insurance claims represent legally enforceable financial entitlements and cannot be withheld indefinitely through administrative excuses or arbitrary budgetary arrangements. The petition sought restoration and proper accounting of policyholders’ funds, an independent forensic audit, disclosure of relevant financial records, timely settlement of matured claims, and appropriate directions to ensure that the responsible authorities discharge their statutory and constitutional obligations.

Muhammad Azhar Siddique stated that the savings of thousands of ordinary citizens, pensioners and widows cannot be left unprotected while public institutions pass responsibility from one department to another. The State must disclose where the policyholders’ money has gone, under whose authority it is being retained, and when their legitimate claims will be paid.

Copyright Business Recorder, 2026