M IANGUL HASSAN AURANGZEB, J:- Through the instant writ petition the petitioner, Adamjee Life Assurance Co Limited, impugns the order dated 07.09.2020 passed by the President of Pakistan, whereby the petitioner's representation against the order dated 11.12.2019 passed by the Federal Insurance Ombudsman ("the Ombudsman") was turned down. Vide the said order dated 11.12.2019, the Ombudsman directed the petitioner to pay respondent No.2, Mst. Sabia Bibi widow of late Abdul Amin, an amount of Rs.3,561,300/- within 30 days of the issuance of the said order.
2. Learned counsel for the petitioner submitted that on 19.07.2013, late Abdul Amin submitted an application to obtain Adamjee Save and Assure insurance policy through MCB Bank Limited which was acting as the petitioner's agent under an agreement; that the insurance policy for which late Abdul Amin had opted included Accidental Death & Disability Rider ("ADD Rider") which entailed annual premium of Rs.6,450/- per annum for a period of five years having a cover of Rs.3 million for the period commencing from 25.07.2013 to 24.07.2018 for the ADD Rider; that the policy also included "save and assure" which entailed annual premium of Rs.93,550/- per annum for a period of five years against which a minimum death benefit of Rs.561,300/- was guaranteed for a period of eleven years; that on 29.07.2013, the petitioner addressed a letter to late Abdul Amin informing him about the acceptance of his policy; that he was also provided with a document explaining how the policy works; that over a period of five years, late Abdul Amin paid a premium of Rs.100,000/- for each year which was attributed to the respective premium contribution for the ADD Rider as well as save and assure; that the ADD Rider expired on 24.07.2018; that on 13.12.2018, late Abdul Amin was killed and on 13.05.2019, his widow / respondent No.2 filed a death claim; that the petitioner processed the claim and on 19.06.2019, she was paid Rs.561,300/- as final settlement in terms of the policy however since the ADD Rider had expired, no benefit under that head was paid; that respondent No.2's complaint to the Securities & Exchange Commission of Pakistan was forwarded to the Ombudsman which required respondent No.2 to comply with the requirements of Section 129 of the Insurance Ordinance, 2000 ("the 2000 Ordinance"); that the position taken by the petitioner in the proceedings before the Ombudsman was that since the ADD Rider had expired prior to late Abdul Amin's death, a death claim could not be made; that vide order dated 11.12.2019, respondent No.2's claim was accepted by the Ombudsman and the petitioner was directed to pay Rs.3,561,300/- out of which the petitioner had already paid Rs.561,300/-; and that the petitioner's representation to the President of Pakistan was turned down through order dated 07.09.2020.
3. Learned counsel for the petitioner further submitted that the Ombudsman erred by not appreciating that respondent No.2's complaint had not been made on oath or solemn affirmation; that respondent No.2 had not issued notice to the petitioner of her intention to file a complaint; that both the Ombudsman and the President of Pakistan erred by not appreciating that a death claim could not be allowed after the expiry of the ADD Rider; and that the concurrent orders are based on poor reading of Section 75 of the 2000 Ordinance and faulty interpretation of the principles of uberrima fides. Learned counsel for the petitioner prayed for the writ petition to be allowed and for the concurrent orders dated 11.12.2019 and 07.09.2020 passed by the Ombudsman and the President of Pakistan, respectively, to be set-aside.
4. On the other hand, learned counsel for respondent No.2 submitted that the said concurrent orders suffer from no jurisdictional infirmity so as to warrant interference in the Constitutional jurisdiction of this Court; that the Ombudsman correctly held that the petitioner had deceived an illiterate policyholder by unlawfully withholding the payment of Rs.3,561,300/- for a period of six years; that the accidental death benefit coverage was unilaterally withdrawn by the petitioner without the express knowledge of the policyholder or making any endorsement in the policy documents which is a violation of Section 76 of the 2000 Ordinance; that there was an ambiguity in the contract as there was no mention about insurance coverage in second phase, hence, in the light of Section 77 of the 2000 Ordinance, it is to be construed in favour of the policyholder; that the petitioner failed to provide a sale brochure / blue print of the product, policy documents and supplementary contract / the ADD Rider; that the Ombudsman correctly held that the petitioner had committed mal-administration in terms of Section 127(2) of the 2000 Ordinance; and that the Ombudsman is an expert in the field of insurance and his decision in the matter cannot be doubted. Learned counsel for respondent No.2 prayed for the writ petition to be dismissed.
5. I have heard the contentions of the learned counsel for the contesting parties and have perused the record with their able assistance.
6. It is not disputed that late Abdul Amin had purchased an insurance policy from the petitioner through MCB Bank Limited with a assured sum of Rs.561,300/- plus accidental death and disability benefit of Rs.3 million and paid an annual premium of Rs.100,000/- for five years. The last premium was paid on 25.07.2017. Late Abdul Amin was a polio worker and was murdered on 13.12.2018 while on duty.
7. After Abdul Amin's death, his widow / respondent No.2 submitted her claim to the petitioner. She was paid Rs.561,300/-, i.e. the basic assured sum but not the accidental death benefit of Rs.3 million.
8. The petitioner's justification for not paying the accidental death benefit of Rs.3 million to respondent No.2 was that the ADD Rider had expired on 24.07.2018, i.e. upon five years of the commencement of the policy on 25.07.2013, and that the policyholder / late Abdul Amin had died on 13.12.2018, i.e. after the expiry of the ADD Rider.
9. For the basic sum assured, the policy commenced on 25.07.2013 and the policyholder paid Rs.93,550/- per annum. As against this the policyholder was to be paid at least Rs.561,300/- on the date of expiry, i.e. 24.07.2024. The petitioner asserts that as regards the accidental benefit, the policy commenced on 25.07.2013 with an annual premium of Rs.6,450/- and in the event of death, Rs.3 million had to be paid but the validity period of this part of policy was only until 24.07.2018.
10. The policyholder paid an annual premium of Rs.100,000/- for five years, i.e. from 25.07.2013 to 24.07.2018. His policy had two phases, the first was for the first five years from 25.07.2013 to 24.07.2018 during which period he was required to pay an annual premium of Rs.100,000/- and the second phase was from 25.07.2018 to 24.07.2024 during which period he was not required to pay any premium and the cash value of the policy as on 24.07.2018 was to be taken as premium in advance for the next six years.
11. The Ombudsman also obtained comments from the Actuarial Department according to which the payment term is five years and the benefit term is eleven years. It is also stated that this allows the policyholder to pay only five premiums yet have the cover active for eleven years, and that after five premiums were paid, the accumulated cash value is then used to fund the risk coverage.
The Ombudsman, on the basis of the comments from the Actuarial Department, found that in fact there was no additional risk coverage bearing in mind the accumulative premium for eleven years.
In fact when the policyholder died, he was paid the amount accumulated during the first five years.
12. In the proceedings before the Ombudsman, the petitioner was not able to produce a copy of the policy clearly setting out the ADD Rider. At page 5 of the Ombudsman's order, it is observed that very poor photocopies which were not readable had been sent which did not include the ADD Rider.
13. The President of Pakistan found that the petitioner had violated Rule 38 of the Securities and Exchange Commission (Insurance) Rules, 2002 which obligate an insurer to provide a policyholder with a written statement of reasons for denying a claim. The President of Pakistan also found that the non-coverage of the accidental death benefit after the first five years but during the continuation of the insurance policy is a departure from the established practice. The observation of the Ombudsman that for the second phase of the policy from 25.07.2018 to 24.07.2024 during which period, according to the petitioner, the accidental death benefit was withdrawn, was without any information to the policyholder or endorsement in the policy documents. It was also observed that the petitioner failed to provide policy documents mentioning such change in the terms and conditions of the policy. This became the foundation for holding that the accidental death benefit could not be legally terminated and the same would be payable to respondent No.2.
14. Since I have been given no reason for holding that the concurrent orders dated 11.12.2019 and 07.09.2020 passed by the Ombudsma n and the President of Pakistan, respectively, suffer from any jurisdictional infirmity, the instant petition is dismissed with costs.