Insurers and policyholders: SECP forms Dispute Resolution Committees

The Securities and Exchange Commission of Pakistan (SECP) has constituted Dispute Resolution Committees for mediation and resolution of disputes arising between the insurers and policyholders. Sources told Business Recorder, here on Wednesday that the SECP has also approved appointment of the members of three Small Dispute Resolution Committees. These committees have been constituted in Karachi, Lahore and Islamabad for mediation and resolution of disputes arising between the insurers and the policyholders.
The disputes between insurance companies and policyholders cover individual life contract, domestic insurance policy and private motor insurance policy. The committees have the terms of reference to arbitrate small disputes arising between insurance policyholders and insurance companies. Each committee will comprise one chartered accountant or a management accountant, a lawyer and senior insurance industry professional.
Moreover, SECP has also designated its three officials to coordinate with the said committees. The idea behind the constitution of these committees is to provide maximum relief to the insurance policyholders or their legal heirs in case any dispute arises between them and the insurance companies. The committee would have the authority to arbitrate disputes having pecuniary limits: Individual life contract having limit of Rs one million only, domestic insurance policy, Rs 2 million only and private motor insurance policy having limit of Rs one million only.
Presently, two other grievance forums are available to the policyholders, which are the Federal Insurance Ombudsman and the Insurance Tribunals. The outreach of the grievance forums will be strengthened and alongside, the aggrieved policyholders will have a fast track and free of cost remedy to their grievances, as the decisions of these committees will be binding on insurers. The SECP has urged the corporate sector to adopt alternative methods for resolving disputes through mediation prior to resorting to formal arbitration proceedings or litigation, sources added.