Crisis delays Postal Life Insurance claims

Unprecedented delay causes frustration and distress among policyholders

RAWALPINDI:

Payments amounting to Rs8 billion to policyholders of Postal Life Insurance (PLI) have been subjected to prolonged and extraordinary delays owing to a shortage of funds, sparking deep concern among policyholders. Thousands of claims have remained unresolved for an extended period.

The protracted delay in converting PLI – a subsidiary of Pakistan Post – into a registered company, combined with the continued failure to appoint a Chief Executive Officer, has rendered the situation increasingly untenable. As a result, countless claims remain in limbo, driving this once highly profitable institution to the verge of collapse.

According to reports, the Ministry of Finance (MoF) has sanctioned only Rs3b against the Rs8b required for the settlement of claims, with the sum to be released in four quarterly instalments. In the interim, billions of rupees' worth of further claims are expected to accumulate, as policyholders continue to submit early claims in significant numbers.

Sources reveal that the prevailing uncertainty has caused a precipitous decline in PLI's revenues, falling from Rs500 million in 2020 to a mere Rs50m in 2024. The acute cash shortfall and the mounting pressure of unsettled claims have left the authorities gravely concerned. Frustrated policyholders, meanwhile, are turning to all available governmental and legal channels in pursuit of redress.

Compounding matters, the absence of a CEO and the failure to establish a complete board of directors have severely hampered the settlement of large claims. Commenting on the issue, a senior officer of Pakistan Post explained that, since PLI was incorporated as a company, Pakistan Post no longer exercises control over its operations.

In the absence of a CEO, all affairs of the institution currently fall under the supervision of the Federal Secretary for Communications.