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Employees’ insurance case: The Sindh government and State Life Corporation have been asked to reply.

KARACHI: The Sindh High Court (SHC) found that the provincial secretary for finance signed a Memorandum of Understanding (MoU) with State Life Corporation for group insurance of Sindh workers worth billions of rupees without the permission of the Sindh chief secretary.

The provincial chief secretary, as head of the Provincial Welfare Funds, had the competent authority to sign the MoU, according to the document.

On Thursday, the court heard dozens of identical petitions from sitting and retired provincial secretaries, as well as heirs of deceased Sindh government employees, challenging the government’s inordinate delay in settling insurance claims and paying out insurance policies when they reach the age of 65.

The Provincial Welfare Board Sindh, as the custodian of employees’ contributions that are withdrawn at source from their paychecks to pay a premium, appears to have failed to strike a decent deal with insurance firms, according to a two-judge SHC panel led by Justice Salahuddin Panhwar.

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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.

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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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