Insurance, bank’s plans & public rights

The Supreme Court on Saturday delivered an important verdict regarding life insurance and stated that the policy could not be terminated after two years of insurance due to any kind of documentation or misrepresentation. A three-member Supreme Court bench comprising Justice Umar Ata Bandial, Justice Munib Akhtar and Justice Sajjad Ali Shah announced the decision on an appeal filed against Peshawar High Court order judgment. According to the case details, Abdul Rehman took out a life insurance policy with the appellant insurance company in August 2002. The insured died in February 2010 and the company rejected the claim submitted by the legal heir of the deceased insured. The claimant commenced proceedings, in 2011, before the Insurance Tribunal which decreed the claim in the sum of 4 lac in 2014, which was insured amount. Further, the case moved into High Court and Supreme Court over the years. During the court verdict, Justice Munib Akhtar stated that the amount of insurance could not be withheld on the pretext of medical reasons on the death of the insured as the insurance company checks all records at the time of issuing the policy. The judgment further stated that after two years, a life insurance policy could not be avoided on the ground of any falsity or inaccuracy. Insurance is an effective mechanism which provides guarantee of the security of any potential loss, damage, illness, or death of a person in return of the premium amount paid by the claimant under a specific policy accord undertaken between the Insurance Company and the client. However, this puzzle is not as simple as usually projected by the insurance companies and there are a lot of hidden conditions attached to each of the policies which are usually not understandable by the common man nor these companies/ Insurance agents clearly illustrates these hidden strings to the clients at the time of finalization of the policy. At that stage clients are shown only the bright side of the policy and the shadow areas always kept behind. However, at the time of claim payment the companies come up with a huge baggage of policies to cut on the payment to the claimant. Most of the maltreated claimants do not seek court’s intervention and halfheartedly receive the amount being paid by the insurance company, whereas rare cases reach in the court which highlight the malfunctioning of the insurance firms in dealing with their clients. In fact, not only the insurance industry is involved in such maltreatment and customer abuse but all financial institutions, banks, cell phone companies and other firms are also involved in this tricky game, of making unjust profit out of the customers innocence by using hidden conditions in the policy.

In fact, there is a need for protection of consumer rights through legislation at the national level. The insurance companies, banks and other firms must be forbidden to launch their business policies/project/plans without vetting the legal department of the relevant Ministry of the government so their unilateral decisions/ policies could not damage the public/ consumers rights. All business firms must be advised to clearly print all policy conditions in Urdu language and must make the customers clearly understand those conditions before undertaking the policy, loan, or any other transaction to avoid future loss to a common man. It will not only protect the public and consumer’s rights, save the time of courts, and will make the business environment more public friendly and financially more accountable in the country.