President Dr Arif Alvi has instructed EFU Life Assurance Ltd to reimburse Rs100,000, along with the profit gained to the poor woman who was deceived into acquiring the insurance policy.
According to a press release issued by the President House Press Wing on Thursday, Zubaida Begum had obtained an amount of Rs100,000 by participating in a local ‘committee’ and intended to deposit the amount in her bank account, but she was fraudulently issued an insurance policy at the bank.
When expressed her inability to pay an annual premium of Rs100,000 and asked for a refund of her deposit, she was told that she would only be refunded an amount of Rs40,000 as per the policy of the bank.
Feeling aggrieved, she approached the Federal Insurance Ombudsman (FIO) but her grievance was not addressed. Later, she filed a representation with the president against the decision of FIO. The president personally heard the case of the aggrieved lady, and after going through the record, decided the matter in her favour.
Read: https://tribune.com.pk/story/2450071/alvi-warns-against-deceptive-practices
In his decision, he observed that the complainant was entitled at least to the refund of the principal amount as her claim was just and fair. He added that the mis-selling of the policy to the poor lady who never opted to purchase the policy in the first place and thereafter the denial of the refund of the deposited premium amount by the company constituted maladministration.
The president noted that FIO had directed the insurance company to refund Rs40,000 to the woman, without acknowledging the fact that an amount of Rs60,000 was remaining to be paid by the company. He said as per Insurance Ordinance 2000, FIO was to ensure the protection of the interests of insurance policyholders, and non-refund of even the deposited amount by the insurance company was a sheer violation of the spirit of the Ordinance.
He stated that FIO had failed to follow the spirit of the Ordinance and had not realised that Rs100,000 had been kept by the company since 2020 and that they must also have earned a considerable profit on it by investing it. The president wrote that the equitable principle of enrichment envisaged that no one should unjustly enrich themselves at the expense of others.
Published in The Express Tribune, January 12th, 2024.
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