ISLAMABAD: The Securities and Exchange Commission of Pakistan (SECP) has approached provinces to digitise the death certificate system so that heirs of life insurance policyholders can easily get their insurance claims.
The SECP has also directed insurance companies to develop a platform with the National Database and Registration Authority (Nadra) so information regarding a policyholder’s death could be made available to the companies in the shortest possible time and death claims could be automatically initiated.
In a letter to Punjab and Sindh governments, SECP Commissioner Insurance Sadia Khan said that there was a need to facilitate the heirs of insurance policyholders and the issuance of death certificates has to be digitised with links to Nadra.
At the same time, the SECP has directed the life insurance companies to devise a mechanism so that details of a policyholder’s demise could be received by them from Nadra automatically.
SECP asks provinces to facilitate policyholders
The letter was written after the SECP received complaints regarding the attitude of insurances companies if the heirs approached them sometime after the death of the policyholder.
“The timely availability of credible death information can enable speedy claim payment to the life insurance beneficiaries,” the SECP letter said.
It noted that while the life insurance provided financial protection to the family of a policyholder following the death of the breadwinner, given the low literacy levels in Pakistan, the heirs of life insurance policyholders were generally unaware of the existence of a life insurance policy purchased by the deceased.
“Even if aware, getting a death certificate was a difficult task for the bereaved widow and children, especially in the rural areas,” the SECP noted.
The commission suggested to Punjab and Sindh governments that a linkage platform can be created with the death registry maintained with Nadra.
Meanwhile, responding to a query, a senior SECP official said that initially Punjab and Sindh governments have been requested because a majority of life insurance policyholders belong to these two provinces. After the success of a joint platform, Khyber Pakhtunkhwa and Balochistan governments would be approached for adopting the same system.
“The streamlining of the claims would also encourage life insurance in the country,” the official added.
“Delays in payment of claims benefit the insurance companies as they retain the amount in their bank accounts,” he added.
The figures available from State Life – the largest life insurance company in Pakistan – show that by the end of the year 2021 there were around 96,000 matured policies that remained unclaimed.
Currently, there are 10 active life insurances companies in the country registered with the SECP, including Adamjee Life Assurance Company Limited, Askari Life Assurance Company Limited, Dawood Family Takaful Limited, EFU Life Assurance Company Limited, IGI Life Insurance Limited, Jubilee Life Insurance Company Limited, Pak-Qatar Family Takaful Limited, State Life Insurance Corporation of Pakistan, TPL Life Insurance Limited and the Postal Life Insurance Company Ltd.
Published in Dawn, March 7th, 2022