Law to check insurance Cos’ fraud urged

LAHORE:Speakers in a seminar highlighted the need to evolve effective legislation and mechanism to check the frauds committed by insurance companies by keeping the policy holders and clients in the dark about future deductions and penalties that deprived the people of their hard earned money.

Insurance policy contracts should be written in clear language and publicised in media to create awareness among the masses about the real terms and conditions on which they are asked to sign in haste and then get into the trap, they said while addressing a seminar organised by Federal Insurance Ombudsman Department at Governor’s House here Thursday.

Punjab Governor Chaudhry Muhammad Sarwar was to be the chief guest but he had to leave for Islamabad for dealing some emergent issues. In his absence, Federal Insurance Ombudsman, Dr Muhammad Khawar Jameel presided over the seminar which was participated by Punjab University Pro-Vice-Chancellor Dr Saleem Mazhar, former federal secretary Qazi Afaq Hussain, renowned cartoonist and pride of performance recipient Javed Iqbal, noted lawyer for public interest litigations Azhar Siddiq, FIO Islamabad incharge Riffat Shaheen Qazi and a leading insurance company CEO Tahir Masood. FIO Lahore incharge A Basit Khan presented welcome address.

Renowned actor of TV, stage and films Rashed Mehmood conducted the seminar, while veteran artist Khalid Butt and famous singer Khalid Baig were also present. Khalid Butt narrated his ordeal at the hand of a US-based insurance company which cheated him of valuable saving and regular premiums for 10 years, but at the end refused to payback saying the policy had a clause that made it mature after 30 years. Group chairman Sheikhupura Chamber of Commerce, Manzoor-ul-Haq Malik suggested that FIO and the government should make rules forcing the insurance companies to write down all documents and formalities on contracts required to process claims of accidents. Dr Khawar Saeed Jamali of DOW University of Medical Sciences, Karachi, suggested that large medical institutions should be engaged to process medical records and reports for policy-holders.

Dr Khawar Jameel said during last one and half years after assuming his post, he and his team brought some useful changes that effectively checked the insurance companies from fleecing innocent people by keeping them in ignorance and fall into the trap of buying “profitable” insurance policies with the connivance of bank managers.

These steps resolved over 80 percent of disputes and reduced the number of appeals against FIO decisions to zero since both parties agreed to the arbitration. As a result of useful arbitration, he said, the relief paid to the policy-holders has risen to Rs2.13 billion in 2020 against 410 million in 2019.

He said after enlarging the agreement’s font size and printing salient features in Urdu, we have created some barriers by involving SECP and State Bank to check against negative aspects of the policy contracts. Now a client can cancel the agreement within 15 days of signing if he is not satisfied, and insurance companies are barred from depositing the cheque into their account for at least three months during which another opportunity is given to the client for withdrawing from the contract.

He said FIO wanted to prevent “mis-selling” or fraudulent sale of insurance policies by cheating people but do not want to cause damage to insurance business since it generates Rs378 billion annually as premium which is 0.8 percent of GDP and we want it to increase up to 1.5 percent to boost national economy.