ISLAMABAD - The Securities and Exchange Commission of Pakistan (SECP) has proposed draft amendments to the 2002 Insurance Rules, affecting the licencing of direct insurance brokers. The proposed amendments have been published in the official gazette of Pakistan to elicit public comments.
The amendments deal with the exclusivity of the insurance broking licence, paid-up capital requirements, requirement to maintain a net asset value, registration and renewal fees, statutory deposit requirements, professional indemnity insurance requirements and fit and proper criteria for the directors and chief executives of insurance brokers.
Compared to similar jurisdictions, the current regulatory regime for insurance brokers in Pakistan is relatively underdeveloped. The framework, therefore, has been reviewed in the light of evolving market practices and global regulatory developments. The regulatory regime for insurance brokers in Pakistan consists of the provisions prevailing from the primary law of the Insurance Ordinance of 2000 and the rules made thereunder.
Currently, there are nine registered insurance brokers, authorised to undertake the direct insurance broking in Pakistan. Mohammed Asif Arif, the Commissioner Insurance, has said that with this move, the insurance broking practices in Pakistan would be conducted with more sophistication and professionalism, “This will also lead to the overall protection of policyholders and further development of local insurance industry.” He also said that any comments on the proposed amendments may be provided to the SECP by October 19.