Lahore High Court has handed down key verdict regarding payment of interest on insurance claims after dismissing all of four appeals filed by insurance companies.
Lahore High Court Justice Raheel Kamran issued a detailed 13-page judgment. The court upheld the order which stated that insurance companies are bound to pay interest at an additional rate of five percent to widows for delay in payment of insurance amount. The decision said that the main objective of the law is to provide financial protection to consumers in case of delay in payment of money.
In its detail verdict LHC said the insurance company is legally bound to pay interest if insurance claims are not settled within 90 days. It said that the families of deceased insureds are entitled to get legal interest under the Insurance Act 1938.
The decision of the Federal Sharia Court will be applicable from the future, the rights established in the past will not be affected. Lahore High Court also rejected the plea of State Life Insurance based on the decision of the ‘Andalus Begum case’. The dispute over insurance claims in the current cases predates the Insurance Ordinance 2000, the court observed.
The LHC said that the repeal or change of laws does not extinguish the legal rights and obligations acquired in the past. LHC Justice Raheel Kamran upholds trial court’s decisions as per law. The families of late Riaz Hussain, Aslam Shah, Alamdar Hussain and Muhammad Azam had sought relief from the court.
