LAHORE: The office of Federal Insurance Ombudsman (FIO) has succeeded in securing Urdu translation of insurance documents as integral part of policy documents to save the policyholders from fraudulent activities.
Accordingly, all the insurance companies have ensured provision of all documents to the policyholders in English and Urdu languages written as line by line translation on the same page.
Sources from the regional office of FIO said the insurers are also required to show a brief audio/visual clip of at least two minutes to the prospective policyholder prior to providing him/her the proposal form for filling up. The audio-video clip shall cover key features of the insurance product being offered covering premium payment, coverage extended, minimum financial component, free look period, surrender options and partial withdrawals etc, contents of the proposal form, its significance, duty to provide accurate information and implication of non-disclosure and/or material misrepresentation of material information on claim adjudication.
The sources from the insurance industry further pointed out that the insurance companies have also change the font size from earlier 9 point t0 12 point with the start of the current financial year as per the instructions from the Securities and Exchange Commission of Pakistan (SECP). It may be noted that the FIO had pursued the SECP for a change in regulations for the insurance industry in the larger interest of the policyholders, as majority of the complaints, particularly those belong to Bancassurance, were all about such discrepancies.
It is worth noting that the Bancassurance business has increased in manifold in the recent past, a channel desired for sale of insurance policies through bank desk. Simultaneously, the complaints from the victims of Bancassurance had witnessed an alarming pace as the number of complaints during the past two years increased many times as compared to the preceding years.
The ordinary bank account holders were suffering the most troubles because of that the management of banks had recklessly misused the banking industry’s trust with account holders by selling life insurance policies without informing them properly while showing high profit bearing bank products. The account holders, not suspecting any misuse of their trust in banking industry, were found readily falling a prey to such offers of better profits against the available ones against their deposits in ordinary bank accounts.
Therefore, the present FIO intervened in the situation and not only gave a new mechanism to settle the insurance matters for an amicable settlement through meditation but also wrote to the SECP for changing the insurance industry regulations to save the policyholders from fraud. Sources said the new banking policy has all the SECP instructions before the banks offer Bancassurance to their account holders.
Copyright Business Recorder, 2022