LAHORE: An insurance company has secured a victory in jurisdictional dispute against the insurance ombudsman. In a significant development, an insurance company has successfully argued that the insurance ombudsman lacks jurisdiction to adjudicate disputes related to questions of fact but can only intervene in cases of maladministration.

The case pertained to a burglary at an insured boutique outlet, where the complainant had filed a claim under a fire policy. The insurance company had appointed a surveyor, authorized by the Securities and Exchange Commission of Pakistan, to assess the loss.

The surveyor's report confirmed the incident but reduced the claim amount by half, citing the absence of a security guard and inflated figures.

The complainant approached the insurance ombudsman, who assumed jurisdiction and decided the matter on merits. However, the insurance company challenged this decision, arguing that the dispute involved questions of fact that required evidence recording, making it a matter for the insurance tribunal.

The appellate forum upheld this argument, observing that maladministration involves decisions or recommendations contrary to law or departure from established practice and procedure. Also, if something is unreasonable, unjust, biased, oppressive, or discriminatory or is based on irrelevant grounds. Furthermore, if it is also involved in the exercise of powers, or the failure or refusal to do so, for corrupt or improper motives. Finally, it is related to matters of inefficiency and ineptitude in the administration or discharge of duties and responsibilities. As the controversy centred on disputed facts, the insurance ombudsman lacked jurisdiction.

It further pointed out that the sole claim, on the basis of which, the complainant approached the ombudsman was delay in providing survey report, but not due to the refusal on the part of the insurance company to honour the claim in violation of rules and regulations. Since the survey report was disputed, which questioned the excess claim; therefore, it was a matter of evidence and not maladministration.

This decision sets a precedent, clarifying the boundaries of the insurance ombudsman’s jurisdiction and emphasizing the distinction between maladministration and disputes requiring evidence recording, said insurance circles.

Copyright Business Recorder, 2024