News eDaily04 Jan 2017

Pakistan:Draft insurance Bill addresses microinsurance and reforms

04 Jan 2017

Pakistan's proposed Insurance Bill 2016 has set a minimum paid-up capital requirement of PKR50 million (US$477,000) for insurers which are registered exclusively to undertake microinsurance business.

The proposed Bill, released by the Securities and Exchange Commission of Pakistan (SECP) last month for public feedback, states that no person other than a public company formed and registered under the Companies Ordinance 1984 and a body corporate shall be eligible to undertake microinsurance business in Pakistan. A microinsurer can offer both life and non-life microinsurance services as may be prescribed by the SECP. A microinsurer registered to carry on microinsurance business only in one province of Pakistan, shall have a paid-up capital of not less than PKR50 million.

The draft Bill aims to foster a conducive regulatory environment to encourage market development, strengthen the regulatory framework to ensure alignment with the Insurance Core Principles of the International Association of Insurance Supervisors, address entity-specific and systemic risks by phased shifts towards risk based supervision and a risk based capital regime, and address the regulatory gaps in existing law.

Significant reforms proposed by the draft Bill include provisions for regulation of takaful and retakaful, regulation of local and foreign reinsurance business for enhancement of local capacity, regulation of reinsurance brokers, flexibility in the introduction of new intermediaries, as well as introduction of web aggregators and insurance repositories. It also provides for the introduction of an industry-wide guarantee fund to address systemic risk, requirements for an "appointed actuary" and product filing in non-life insurance.

 

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