ISLAMABAD: President Dr Arif Alvi asked Federal Insurance Ombudsman (FIO) to ensure that insurance companies disclosed conflict of interest to purchaser of insurance policy before selling policy as there had been instances of grave mis-selling of policies which required serious relook at product structure and front-loaded commission of agents of insurance companies.

President gave these directions while deciding upon representation filed by Pak-Qatar Family Takaful Ltd (Petitioner Company) against order of Federal Insurance Ombudsman.

As per details, Anwarul Haq (complainant) had alleged that he purchased Kafalah Takaful Plan from Petitioner Company in February 2017 for sum assured of Rs 4.5 million and an annual premium of Rs 750,000.

He had been paying annual premiums regularly till year 2022 and total amount of his deposited premiums was Rs 4.5 million. On account of unavoidable circumstances, he requested company for withdrawal of his deposited premiums with all benefits and profit but to no avail.

President held personal hearing of case and after listening to both sides, gave his decision. In his decision, he observed that it was an admitted fact that company received Rs 4.5 million from complainant, invested money in business and earned considerable profit.

He said that it was usually insured that ended up with wrong end of stick, given high surrender costs. He regretted that insured had to suffer even if he stayed on policy and even when he opted out because he ended up paying heavy surrender penalty, adding that intermediaries, who get to pocket fat commission, rarely suffered.

President rejected instant representation by modifying FIO’s impugned order that petitioner company was directed to refund Rs 4.5 million instead of Rs 4.3 million to complainant within 30 days of receipt of order.

Published in The Daily National Courier, November, 04 2023

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