ISLAMABAD: President Dr Arif Alvi has rejected a representation of an insurance company and directed it to pay death insurance claim worth Rs300,000 along with profit to the family members of a deceased policyholder.

State Life Insurance Corporation (SLIC) had challenged a decision of the federal ombudsman regarding insurance claim of Saad Taheer, who alleged that his father had purchased a life insurance policy from the agency in 2013 for the sum assured of Rs300,000 with annual premium of Rs18,406. But after the death of his father, his family members were not being paid the claim for almost three years despite the fact that the federal ombudsman had decided in their favour.

According to the case, father of the complainant died in 2020. The SLIC denied death insurance claim on the ground that the deceased had a pre-insurance ailment of hepatitis-C which he had deliberately hidden.

The applicant approached the federal ombudsman which asked SLICP to reconsider the matter and provide appropriate relief to the nominees of the deceased policyholder. The SLICP, then, filed a representation with the president against the order.

The president held a hearing on the matter and after listening to both sides gave his decision. He pointed out that the deceased had purchased the policy in 2013 whereas SLICP had produced copies of medical reports of the year 2015 and all reports pertained to the post-insurance period and were not worth consideration.

He noted that the confidential report of the SLICP field officer had also declared the insured as healthy at the time of issuance of the policy and had clearly stated that she knew the insured for the last two years.

The president also referred to Section 80 of the Insurance Ordinance 2000, which provided that no policy of life insurance, after the expiry of two years from the date on which it was affected, shall be called into question by the insurer on the ground that a statement in the proposal for insurance or in any report of a medical officer was false or inaccurate.

The president, therefore, rejected State Life’s representation and directed it to pay the insurance claim along with the accrued profit within 30 days to the nominees.

The president also advised that the company might devise a risk assessment about different diseases and modify premiums accordingly, if they wanted to issue policies to patients with mild and very prevalent diseases like diabetes, hypertension, hepatitis etc.

The president also ordered the SLICP to form a panel of doctors for devising a policy on pre-insurance tests of proposed policyholders.

Published in Dawn, November 6th, 2023