He had not transferred insurance paper in his name, just submitted the old insurance paper (with sellers name) to RTO.
Always follow below points, while purchasing second hand car -
1- It is very important to ensure that all the documents of the vehicle like - RC, Service Record/ Papers, Insurance, CNG Installation receipt (if CNG is fitted) is in order. Don’t take photocopy of these document, always insist on original.
2- Check with police that the car is not registered for theft.

3- Insist on the insurance papers, as these papers are mandatory for any transfer by the RTO.
4- Also ensure transfer of the Insurance papers and RC to your name.