The Business Recorder of April 21, carried the happy news of the appointment of former Justice S. Ali Aslam Jafri as Federal Insurance Ombudsman (FIO) for a four-year term, with his office at Karachi.
In this race there were three former judges ie Justice Mian Mehboob Ahmed, Justice Zahid Ali Kurban and Justice S. Ali Aslam Jafri but the Ministry of Commerce selected Justice S. Ali Aslam Jafri for this post.
Earlier in the month of November 2005, the government of Pakistan appointed Maudood Ahmed Lodhi, former chairman of the National Insurance Company Limited, as FIO but later on withdrew his notification, because Lodhi declined the offer and joined the Karachi Stock Exchange as its Managing Director.
It is heartening that, at last, after a lapse of about six years FIO has been awarded by the government to insurance industry for the protection of policy holders as well as insurers. The need of this institution was not only acute but also very important in our society which is not only corrupt but also depraved. Before the appointment of FIO there was no platform for resolving the disputes between insurance companies and the insureds.
FIO would now provide the long-awaited relief to such policy holders whose claims were either rejected, or partly admitted by insurance companies. Everybody knows that the affairs of the insurance sector have remained neglected rather too long thereby leading to emergence of a plethora of problems in its functioning.
The institution of FIO is meant to provide diagnosis, investigation, redressal and rectification of any injustice done to a person through maladministration by any of the insurers in the public or private sector. FIO would address grievances relating to life as well as general insurance business as per the rules of the Insurance Law 2000.
Since the institution of FIO has been established, it needs a lot of spadework to be done in order to create awareness among the public as well as the insurance sector. If the programme of awareness is not done, then the purpose, for which it is created, would not only be defeated but the injustice done to the aggrieved claimants would also remain unresolved.
Therefore, FIO should evolve a fool-proof and elaborate programme for his working and meaningful role in this most neglected sector. It can learn a lot from the operation of the Banking Ombudsman which was set up on July 1, 2005.
First of all, it should have an independent office, free from all affiliations ie It should neither take any dictation from the Securities and Exchange Commission of Pakistan (SECP) nor from any ministry of the government of Pakistan.
It can take a lot of ideas from the working of the other Mohtasibs, such as Federal Mohtasib, Provincial Mohtasib, Federal Tax Ombudsman and Banking Mohtasib so that FIO should not have any difficulty in organising his office. In this way, FIO would save a lot of time and money.
Then, it should develop its own logo to identify its office. It should also define its mission, objectives and values, so that public may become aware of its existence. To run his office as well as for his assistance, he should hire advisors from the corps of senior retired insurance executives.
These advisors would do all initial investigation of each and every complaint of the aggrieved party and then submit the summaries to the FIO for a decision. Non-insurance staff would not be of any help to FIO.
To other challenge for FIO would be to create awareness amongst the insurance companies as well as general public to define the parameters of his authority. To communicate his strategy FIO should adopt the following steps:
i) Web site should be developed to allow easy access to the office of FIO and also to facilitate the aggrieved people.
ii) FIO should call a press conference in which he should invite not only the press but all heads of insurance companies alongwith the general public and there he should convey the main role and function of his office.
iii) Press advertisements may be released in the leading Urdu and English daily newspapers for the information of general public about the office of FIO.
iv) Leaflets or handbills may be prepared, for placing them in banks as well as insurance companies. Why banks, because a large portion of insurance business emanates from banks and financial institutions.
v) FIO should visit and address the chambers of trade and commerce in all important towns and cities, such as Karachi, Lahore, Islamabad, Peshawar, Faisalabad, Multan and Sialkot etc, to enable the traders to understand the importance of his office in their circle.
vi) The help of electronic media may also be obtained to create further awareness among the public by giving informatory interviews.
All these above measures are very essential because the purpose of setting up of this institution is to protect the rights of clients of insurers and also to ensure that insurance companies follow the best practices while dealing with their policy holders. Insurers do not sell any tangible product but only a document with a promise that in the event of any eventuality the insured will be compensated as promised in the policy document.
Therefore, if that promise is not honoured at the time of a mishap or suffering, then the purpose of insurance would be defeated and the insured would be left in lurch. Unfortunately, such cases are very common in our present society and the reasons are varied.
The insurers are also at fault owing to their eagerness of acquiring more insurance business and sometimes, insureds are at fault on account of their greediness. And it is so because the society in which we are living is plagued with hypocrisy, corruption, deceit, fraud, falsehood, breaching of covenants, exploitation of the poor and weak. As such we cannot blame only the insurers because the insureds are also at fault.
Normally, the insurance companies do not like to annoy their clients because these are their bread and butter and nobody would like to lose his livelihood or earnings.
As such-insurers cannot dare to deprive themselves of their feeding line. In some cases, of course, the insurers become very difficult and strict when the insureds try to take undue advantage but such instances are few and far between.
By and large the relations between the insureds and the insurers are cordial but since to err is human, some unusual disagreements do arise, among them. These altercations between insured and insurer would now be dispensed with by the office of the FIO.
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