In a move aimed at speeding up the processing of claims by heirs of life insurance policyholders, the Securities and Exchange Commission of Pakistan (SECP) has instructed provincial governments to digitalise the death certificate system.
At the same time, insurance companies in the country have also been tasked to develop a platform to interface with the National Database and Registration Authority (Nadra) so that information on a policyholder’s death can be made accessible to the companies in the shortest possible time after a policyholder’s demise, and death claims can be automatically initiated, reported Dawn newspaper.
The SECP noted that while life insurance provides financial protection to the family of a policyholder following the death of the breadwinner, the low literacy levels in Pakistan meant that the heirs of policyholders are generally unaware of the existence of a life insurance policy purchased by the deceased.
“Even if aware, getting a death certificate was a difficult task for the bereaved widow and children, especially in the rural areas,” the SECP noted.
A senior SECP official said that Punjab and Sindh provincial governments were the first to be asked to digitalise the death certificate system as they were the two provinces with the highest number of life insurance policyholders in the country. Following successful implementation of a joint platform, Khyber Pakhtunkhwa and Balochistan governments would be approached to adopt the system.
“The streamlining of the claims would also encourage life insurance in the country,” the official added.
According to figures made available by State Life – the largest life insurance company in Pakistan –there were around 96,000 matured policies that remained unclaimed as of the end of the year 2021.
“The timely availability of credible death information can enable speedy claim payment to the life insurance beneficiaries,” the SECP letter said.
There are presently 10 active life insurances companies in Pakistan registered with the SECP.