Islamabad, January 12, 2024 – In a significant move aimed at rectifying an injustice, President Dr Arif Alvi has directed EFU Life Assurance Ltd to refund Rs 100,000 along with accrued profits to Zubaida Begum, a destitute woman who fell victim to the mis-selling of an insurance policy.
The unfortunate incident came to light when Zubaida Begum, a financially struggling individual, intended to deposit Rs 100,000 in her bank account after participating in a local “committee.” However, she was deceived and fraudulently issued an insurance policy at the bank without her consent.
Facing financial constraints, Begum expressed her inability to pay an annual premium of Rs 100,000 and sought a refund of her deposit. Shockingly, she was informed that she would only be reimbursed Rs 40,000, which was the prevailing cash value of the policy.
Undeterred, she approached the Federal Insurance Ombudsman (FIO) seeking justice. Disappointingly, her grievance was not addressed by the FIO, prompting her to file a representation with the President against the FIO’s decision.
Personally taking an interest in the matter, President Arif Alvi reviewed the case and, after careful consideration, ruled in favor of the aggrieved lady. In his decision, he emphasized that the complainant was entitled to a refund of the principal amount, considering her claim was just and fair.
President Alvi condemned the maladministration surrounding the mis-selling of the policy to a vulnerable lady and the subsequent denial of a refund by the insurance company. He criticized the FIO for directing a mere Rs 40,000 refund without acknowledging the outstanding Rs 60,000 owed by the company.
Highlighting the violation of the Insurance Ordinance 2000, President Alvi asserted that the FIO failed to ensure the protection of policyholders’ interests. He emphasized that the insurance company had kept Rs 100,000 since 2020, likely earning substantial profits from the investment, which had not been considered in the FIO’s directive.
President Alvi, invoking the principle of equitable enrichment, stated that it was unjust to deprive Zubaida Begum of her rightful share in the profit earned on her money. He asserted that no one should unjustly enrich themselves at the expense of others.
Consequently, President Alvi accepted Zubaida Begum’s representation and directed EFU Life Assurance to refund the full amount of Rs 100,000, along with any accrued profit, to the complainant within 30 days of the order. This landmark decision sets a precedent for protecting the rights of vulnerable individuals and ensuring that insurance companies uphold ethical standards in their dealings with policyholders.
