LAHORE: The Federal Insurance Ombudsman’s (FIO) office has been successful in obtaining Urdu translations of insurance paperwork as an essential component of policy documentation, therefore protecting policyholders from fraudulent acts.
As a result, all insurance firms have guaranteed that all paperwork is provided to policyholders in both English and Urdu, with line-by-line translations on the same page.
According to FIO regional office sources, insurers must also display a brief audio/visual clip of at least two minutes to prospective policyholders before giving them the proposal form to fill out. The audio-video clip should cover key aspects of the insurance product being offered, such as premium payment, extended coverage, minimum financial component, free look period, surrender options, and partial withdrawals, as well as the contents of the proposal form, its importance, the duty to provide accurate information, and the impact of non-disclosure and/or material misrepresentation of material information on claim adjudication.
According to insurance sector sources, insurance firms have also altered the font size from 9 point to 12 point with the start of the current financial year, as per the Securities and Exchange Commission of Pakistan’s directives (SECP). It should be emphasised that the FIO had petitioned the SECP for a reform in insurance sector laws in the greater advantage of policyholders, since the bulk of complaints, notably those from Bancassurance, were about such inconsistencies.
It’s worth mentioning that the Bancassurance sector has grown dramatically in recent years, making it a popular conduit for selling insurance plans through bank counters. Simultaneously, Bancassurance victim complaints have surged at an alarming rate, with the number of complaints more than doubling in the last two years compared to the previous years.
Ordinary bank account customers were enduring the most hardships as a result of bank management’s reckless exploitation of the banking industry’s trust with account holders by selling life insurance policies without adequately notifying them while displaying high profit-generating bank goods. Account customers were discovered easily falling prey to such assurances of greater earnings versus the available ones against their savings in standard bank accounts, not suspecting any exploitation of their confidence in the banking system.
As a result, the current FIO stepped in and not only provided a new method for settling insurance disputes amicably through mediation, but also wrote to the SECP requesting that the insurance sector legislation be changed to protect consumers against fraud. According to sources, the new banking policy includes all SECP guidelines before banks give Bancassurance to account customers.