Death certificates will be digitized to facilitate insurance claims – Journal

ISLAMABAD: The Securities and Exchange Commission of Pakistan (SECP) has approached provinces to digitize the death certificate system so that heirs of life insurance policyholders can easily obtain their insurance claims.

The SECP has also asked insurance companies to develop a platform with the National Database and Registration Authority (Nadra) so that information regarding the death of an insured can be made available to companies as soon as possible and that death requests can be initiated automatically.

In a letter to the governments of Punjab and Sindh, SECP Insurance Commissioner Sadia Khan said there is a need to facilitate the heirs of policyholders and the issuance of death certificates should be digitized with links to Nadra .

At the same time, the SECP ordered life insurance companies to devise a mechanism for them to automatically receive details of an insured person’s death from Nadra.

SECP calls on provinces to facilitate policyholders

The letter was written after the SECP received complaints about the attitude of insurance companies if the heirs approached them some time after the death of the insured.

“Timely availability of credible death information can enable prompt payment of claims to life insurance beneficiaries,” the SECP letter states.

She noted that while life insurance offered financial protection to a policyholder’s family after the death of the breadwinner, given the low level of literacy in Pakistan, the heirs of life insurance policyholders were unaware usually the existence of a life insurance policy taken out by the deceased.

“Even though she was conscious, obtaining a death certificate was a difficult task for the bereaved widow and children, especially in rural areas,” SECP noted.

The commission suggested to the governments of Punjab and Sindh that a liaison platform could be created with the death register maintained with Nadra.

Meanwhile, responding to a question, a senior SECP official said that initially the governments of Punjab and Sindh were approached as the majority of life insurance policyholders were from those two provinces. After the success of a common platform, the governments of Khyber Pakhtunkhwa and Balochistan would be approached to adopt the same system.

“Streamlining claims would also encourage life insurance in the country,” the official added.

“Delayed claims payments benefit insurance companies because they keep the amount in their bank accounts,” he added.

Figures available from State Life – the largest life insurance company in Pakistan – show that at the end of 2021 there were around 96,000 expired policies that remained unclaimed.

Currently, 10 life insurance companies operating in the country are registered with the SECP, including Adamjee Life Assurance Company Limited, Askari Life Assurance Company Limited, Dawood Family Takaful Limited, EFU Life Assurance Company Limited, IGI Life Insurance Limited, Jubilee Life Insurance Company. Limited, Pak-Qatar Family Takaful Limited, State Life Insurance Corporation of Pakistan, TPL Life Insurance Limited and Postal Life Insurance Company Ltd.

Posted in Dawn, March 7, 2022

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