An Insurance Tribunal has directed the Securities and Exchange Commission of Pakistan (SECP) to ensure that insurance companies make available and maintain universal-access telephone numbers and websites to answer policyholders' questions.
It also directed insurance companies to appoint qualified insurance agents who can explain the terms and conditions of insurance policies to prospective policyholders, reported Business Recorder.
The instructions were given in a recent case relating to a dispute over the surrender value of an insurance policy. The policyholder claimed that she had not been properly informed about the terms and conditions of her policy at the policy was sold to her. The relevant insurance company also failed to produce training certificates of the agent who made the sale to her. The insurer had failed to pay her the full surrender value of the policy in question.
The Insurance Tribunal ruled in favour of the policyholder, directing the insurance company to pay the surrender amount along with damages.
The tribunal also emphasised the importance of insurance companies appointing qualified agents who can explain policy terms and conditions clearly to prospective policyholders.
It has further ruled that insurance companies must communicate clearly and transparently with policyholders throughout the policy cycle. This includes providing regular updates on the status of the policy, the creation of statutory funds, and the investment of premium amounts.
The Tribunal also emphasised the importance of using plain language in policy documents, so that policyholders can easily understand the terms and conditions of their policy.
Additionally, the Tribunal directed insurance companies to provide detailed illustrations of the policy benefits and terms, ensure that policyholders understand the policy terms and conditions before purchasing and invest premium amounts in companies with a high credit rating to protect the interests of policyholders.
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