PAKISTAN – SECP to improve regime for insurance brokers

The Securities and Exchange Commission of Pakistan (SECP) proposed draft amendments to the 2002 Insurance Rules, affecting the licensing 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 insurance broking license, paid-up capital requirements, requirement to maintain a net asset value, registration and renewal fees, statutory deposit requirements, professional indemnity insurance requirements and proper criteria for 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, had 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 hereunder. 

Currently, there are nine registered insurance brokers authorised to undertake direct insurance broking in Pakistan. 

SECP Commissioner of Insurance Mohammed Asif Arif said that with this move, insurance broking practices in Pakistan would be conducted with more sophistication and professionalism. He added saying: “This will also lead to the overall protection of policyholders and further development of the local insurance industry.” 

He also said that any comments on the proposed amendments may be provided to the SECP by October 19.