ISLAMABAD: The Securities and Exchange Commission of Pakistan (SECP) has notified amendments to facilitate small insurance policy holders by increasing the minimum limit of disputes that can be challenged for arbitration.
`The limits of disputes that can be challenged for arbitration at the SECP was quite nominal, so majority of disputes did not fall within the jurisdiction of the Small Dispute Resolution Committees,` a spokesman of the SECP said.
The limits of pecuniary value of claims have been increased to Rs2.5 million for motor and life insurance policies and Rs5m for domestic insurance policies by the SECP under Rule 6 of the Small Dispute Resolution Committees (Constitution and Procedure) Rules, 2015.The spokesman said there was a need to raise the pecuniary limits of the claims to be arbitrated by these committees.
The SECP has said that the decision will complement the existing grievance forums such as the Of fice of the Ombudsman or the tribunals, by reducing workload at these forums.
The outreach of the grievance forums will be further strengthened and the aggrieved policyholders will have a `f ast-track` and `f ree-of-cost` remedy to their grievances, as the decisions of these committees will be binding on insurers.
The SECP in 2015, constituted three committees in Islamabad, L ahore and Karachi for resolution of disputes between the insurers and the policyholders which were named as Small Dispute Resolution Committees (SDRCs).Each committee consisted of three members, i.e. a chartered accountant or a management accountant, a lawyer and a representative of the insurance industry.
In addition, the SECP also deputed its officers to act as the official coordinators of the three committees. The idea behind the constitution of these committees was to provide expeditious resolution to the insurance policyholders or their legal heirs in case any dispute arises between them and the insurance companies.
In addition to these committees, two other grievance resolution forums Federal Insurance Ombudsman and insurance tribunals are also available to the policyholders where they can file their complaints.
