ISLAMABAD: President Dr Arif Alvi has instructed the State Life Insurance Corporation of Pakistan (SLICP) to enhance its policy concerning medical tests prior to the issuance of life insurance policies to prospective policyholders.
The president has urged SLICP to form a panel of doctors who will determine the most prevalent and common diseases in Pakistan and recommend which tests should be conducted before policy issuance.
This directive from the president comes in response to numerous complaints received by insurance companies and citizens alike. These cases involve insurance companies denying death insurance claims to family members of policyholders on the grounds that they intentionally concealed ailments when obtaining the policies, according to a press statement from his office.
Despite the policies being issued after the policyholders were declared medically fit by authorized medical officers and field officers of the insurance companies, the payments were being refused.
Rejecting two separate representations filed by SLICP against the decisions of the federal ombudsman to pay Rs3.68 million to the family members of two policyholders, the president issued these directives.
The policyholders in question, Muhammad Yousaf and Abida Bibi, had obtained life insurance policies from SLICP with sums assured of Rs3.48 million and Rs0.2 million, respectively.
Upon their deaths, their family members approached SLICP to claim the insurance amounts, but SLICP denied the payments, citing that the policyholders had pre-existing conditions such as Hepatitis C, chronic kidney disease, heart conditions, and hypertension, which they did not disclose.
In response, the family members lodged complaints with the ombudsman, which ruled in their favour. SLICP then submitted representations to the President, which were ultimately rejected.
In his decision, the president noted that both policyholders had been declared medically fit by the relevant medical officers and field officers of SLICP, who had known them for several years.
He emphasised that pre-insurance ailments could have been easily detected and diagnosed by the medical officers during the examination of policyholders before policy issuance.
Furthermore, the president asserted that SLICP could not use the presence of pre-insurance ailments as a reason to deny payments. According to the Contracts Act of 1872, a contract is not voidable if the consent was obtained through misrepresentation or fraudulent means, provided the deceived party could have discovered the truth with ordinary diligence.
Alvi criticised SLICP for repudiating the insurance claims on weak grounds, stating that it failed to provide evidence substantiating the existence of pre-insurance ailments. He deemed this as maladministration on the part of SLICP.
Consequently, the president directed SLICP to pay Rs3.68 million to the family members and instructed the corporation to improve its policy regarding medical tests. He also suggested that SLICP develop a risk assessment method for different diseases, determine and adjust premiums accordingly (e.g., for diabetes, hypertension, etc.), and strive to prevent future litigation.
