Employees’ insurance case: State Life Corporation, Sindh govt asked to submit replies

Maqbool AhmedStaff Reporter

08th Oct, 2021. 12:50 pm
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KARACHI: The Sindh High Court (SHC) observed that provincial secretary finance signed billions of rupees Memorandum of Understanding (MoU) with State Life Corporation for group insurance of Sindh employees without authorization from Sindh chief secretary.

It said that the provincial chief secretary, being chairman of Provincial Welfare Funds, was the competent authority to sign the MoU.

The court on Thursday was hearing dozens of identical petitions of several sitting and retired provincial secretaries and heirs of deceased employees of the Sindh government, challenging inordinate delay in settling insurance claims and payment of insurance policy at attaining the age of 65 years.

A two-judge SHC bench, headed by Justice Salahuddin Panhwar, noted that the Provincial Welfare Board Sindh being the custodian of employees’ contributions that are deducted at source from their salaries to pay a premium, seemingly failed to strike a good bargain with insurance companies.

Provincial secretary finance apprised the court that group insurance arrangement for the Sindh government employees, whose numbers now have surged to half a million, had been in place for about three decades.

To a query, the finance secretary submitted that the board had tried to convince State Life Corporation for providing insurance coverage for disability and chronic diseases but with the current amount of premium it did not agree.

The secretary of finance apprised the bench that the group insurance arrangement with State Life Corporation remained suspended from June 2018 to July 2020 and was restored with payment of Rs2.5 billion for which a separate MoU was signed.

When the bench inquired whether the secretary of finance had been delegated the authority for signing the MoU, the sitting secretary of finance, Asif Jahangir, said that he had been appointed to the office recently but his predecessor did not have any authority when he signed the MoU.

The secretary informed the court that on an average heirs of 2,500 to 2,800 deceased employees file claims annually.

A representative of the State Life Corporation informed the bench that claims of some 5,000 deceased employees’ heirs were pending.

Justice Panhwar observed that a criminal case could be registered against State Life Corporation for keeping a whopping amount of Rs2.5 billion with it, and not settling the claims of deceased employees.

In an earlier hearing, the secretary of finance, who is also secretary of Provincial Welfare Funds, had submitted that the government signed the MOU with State Life Corporation and that he would ensure all compensations with regard to the entitlement, as heirs of deceased employees would be paid within a month. In case of failure, State Life Corporation would be liable to be booked under the Pakistan Penal Code (PPC).

Justice Panhwar termed the claims verification system as complicated, adding that it needed to be simplified to facilitate the family members of the deceased employees.

What transpired from the submissions of the secretary of finance and representative of State Life Corporation was that heirs of deceased employees of grade I-IV had to wait months even years to meagre insurance amount of five-hundred thousand rupees, Justice Panhwar noted.

Counsel for the retired employees informed the bench that Khyber- Pakhtunkhwa (K-P) and Balochistan governments had enacted laws for paying insurance amounts at the time of retirement and pleaded for a similar arrangement for their clients.

The bench observed that it would seek assistance from some amicus curiae who were well-versed in insurance matters.

Advocate-General Sindh Salman Talibuddin submitted that the court should not go beyond the prayer clause of the petitions and instead, should dispose of the petitions.

However, Justice Panhwar said that the bench would pass an order on the petition. The bench then reserved its order directing the counsel for petitioners, State Life Corporation and government to submit their written arguments.

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