Sindh govt ordered to settle pending insurance claims of employees

The Sindh High Court directed the provincial government and State Life Corporation to settle the insurance claims of provincial government employees or their legal hires within a month.

The directions were issued by a two-judge bench headed by Justice Salahuddin Panhwar while hearing multiple identical petitions.

Sindh government provides its employees group insurance under Sindh Civil Servant Welfare Funds Ordinance 1979 (SCSWFO 1979). For this purpose a Memorandum of Understating (MOU) has also been signed between Provincial Welfare Board and State Life Corporation.

Dozens of constitutional petitions have been filed challenging the anomalies of SCSWFO 1979, vires of MOU and delay in settlement of insurance claims. The insurance claims of the provincial government employees or their legal hires has been pending for two years.

During the hearing of the petitions Assistant Advocate General (AAG) Ali Safdar Depar referred to SCSWFO 1979 and submitted that only in case of death of employee during service or within five years of his/her retirement, the group insurance could be awarded to the legal heirs.

“if an employee, by bless of Allah almighty, survives more than five years of his retirement, then what would be the fate of such amount, particularly if same is paid from salary of employee?” wondered the bench.

Counsel for the petitioners referring to section 6 of SCSWFO 1979 contended that two Provincial Welfare Boards (PWB), I and II, were required to be constituted.

The bench referring to a notification of 2018 and noted it has come on record that there are two boards but there is one MOU. The bench also noted that two boards deal with two categories of employees in accordance with their grade and contribution varies as per the rank.

The bench asked the government to make a proposal with regards to contribution for up to grade 15 in view of their financial constraints.

The bench noted that yearly premium of Rs2.5 billion is paid to the State Life Corporation for 500,000 employees.

For return of deducted amount of those employees, who survive up to 65 years there is legislation in Khyber Pakhtunkhwa whereby original amount, deducted from the salaries, is to be returned to that employees on completion of such age, the bench observed.

Stating that the terms of 2018 notification for making arrangements for group insurance were quite clear, the bench observed that there seemed to be no progress to the same because the best market practices could not be availed by not taking services of more than one insurance companies.

Finance secretary, who is also secretary welfare funds, submitted that the government has signed MOU with State Life Corporation and he would ensure that all compensations with regard to the entitlement, as heirs of deceased employees would be paid within one month. He added that if the State Life Corporation fails to pay the dues then it would be booked under penal code.

The bench observed that any lethal disease or disability was not covered in the current MOU and directed the government to revise the MOU to cover detrimental disease, disabilities and accidental injuries.

The bench summoned chief secretary Sindh, who is competent authority to sign MOU or delegate the same, on October 7 to make definite statement with regard to notification of two boards along with composition also describing the manner of nomination of members of those boards

The bench directed State Life Corporation to submit year wise breakup for the last three years with regard to claims received and settled by them separately.

The bench directed the finance secretary to examine legislation with regard to return of deducted funds and submit definite proposal and steps taken by him in that regard on October 7.