MUHAMMAD MANSHA vs JUBILEE LIFE INSURANCE Ss — 2024 CLD 1543 INSURANCE-TRIBUNAL-LAHORE

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MUHAMMAD MANSHA VS JUBILEE LIFE INSURANCE Ss.97, 118 & 122(3)---Insurance Rules, 2017, Rr.41, 54, 56 & 57---Corporate Insurance Agents Regulations, 2020, Regln. 18(f)---Insurance policy---Claim of policy holder---Communication with policy holder---Call Back Confirmation (CBC)---Proof---Duty of insurer---Phrase "thought out the policy cycle"---Scope---Insurance agent, qualifications of---Petitioner / policy holder was aggrieved of failure of respondent / insurer to return, at the time of maturity of policy, the full amount of premium deposited by him along with profits---Plea raised by respondent / insurer was that petitioner / policy holder had been communicated regularly through Call Back Confirmation (CBC)---Validity---Respondent / insurer was bound by law and had no option but to communicate policy holder the status of policy, unit linked policy, statutory funds, creation of statutory fund and units, allocation of units to policy holder and details of investment of amount of premium including name of the company or government security as required by law---Phrase "throughout the policy cycle" and any "ancillary matters" were very significant and were purposely inserted by law maker to safeguard and protect rights and particularly pecuniary rights of policy holder who was the only stake holder in insurance business---Steps or proceedings required to be communicated to policy holder were to be proved and established by insurer, through strong, reliable and cogent evidence---Respondent / insurer failed to prove CBC in accordance with terms of law---Conversation (CBC) recorded by respondent / insurer could not be termed as communication to petitioner / policy holder as CBC was totally silent about creation of funds, units and investment etc. and such type of evidence was not admissible in evidence---Insurance Tribunal decided relevant issues against respondent/insurer and in favour of petitioner / policy holder---Insurance Tribunal directed respondent / insurer to pay premium excluding the paid amount along with liquidated damages as laid down in S. 118 of Insurance Ordinance, 2000---Insurance Tribunal directed Insurance Companies to appoint qualified insurance agents who had qualified the courses; agent must explain each and every aspect of insurance policy, including special terminology in simple words and in the language of prospective policyholder; video should also be made wherein advice of insurer agent and queries raised by intended policyholder should be recorded; such record should be submitted along with all written replies of insurance companies; in the case of filing of insurance petition, the same video should be given on demand to policyholder---Insurance Tribunal further directed Insurance Companies to communicate to policyholder full information regarding policy and any ancillary matters relating thereto, nature of different funds, creation of statutory funds, location of units and investment of premium amount fund in sound equity, including its name, so that policyholder could know value of his / her / its units timely in an effective manner throughout the policy cycle, as provided in Insurance Rules, 2017 and Corporate Insurance Agents Regulations, 2020---Insurer and corporate insurance agent should provide detail of illustrations to prospective policyholder as per the formant provided by the Commission from time to time with profit on maturity or surrender and insurance agents should ensure that illustration plan given in the prospective policy order as to stand alone document and should also provide a reasonable time to understand the illustration before purchasing life insurance policy---Insurers should also ensure that a specified person must carry out insurance need analysis of the prospective policy holder strictly to accommodate with the terms given in Regln. 18(f) of Corporate Insurance Agents Regulations, 2020---Insurance Tribunal also directed that in case prospective policy holder was an illiterate or individual person or was a lady, whether educated or uneducated, the insurer or its agent should ensure presence of an independent educated advice, preferably of male member of her family, who should also be a witness of policy documents---Insurance Tribunal directed bilingual policy documents in Urdu and English in plain and simple language so that the policy holders, if not much qualified, could understand the nature of the plan sold---Insurer should strictly abide by the directions given in R. 56 of Insurance Rules, 2017---Insurance Tribunal also directed that in future all insurance companies dealing in business of life insurance should preferably invest amount of premium after creating the fund chosen by policy holder in a company having at least rating of AA+ issued by Pakistan Credit Rating Agency to protect interest of policy holders and to save the insurer from unnecessary litigation---Pakistan Credit Rating Agency issues rating of different companies from time to time and AA+ company has the capacity of low expectation of credit risk and indicates strong capacity for timely payment of financial commitment and such capacity is not significantly vulnerable to foreseeable events---Insurance companies in any circumstance should comply with such important direction and violation of the same would entail serious consequences---Insurance Tribunal also directed that SECP and all insurance companies must have universal phone numbers and websites which should answer FAQ's and all other questions arising in the minds of policyholders---Insurance Tribunal further directed that insurers should also submit a complete record of compliance of mandatory provisions of law at time of filing of insurance petition before Insurance Tribunal---Insurance Tribunal further directed that the SECP as regulator of all insurance companies, should ensure that insurance companies are complying with such directions---Petition was allowed accordingly.

MUHAMMAD MANSHA vs JUBILEE LIFE INSURANCE Ss — 2024 CLD 1543 INSURANCE-TRIBUNAL-LAHORE

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