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insurers share specified critical information ,State life aloof from the accord

insurers share specified critical information ,State life aloof from the accord

The Securities and Exchange Commission of Pakistan  facilitated a landmark agreement between the Central Depository CompanyCDC,-insurance-takaful-companies-sign-MoU-to-reduce-fraudulent-practices of Pakistan (CDC) and the country’s life insurance companies.The 80 percent market Share Corporation  State life aloof  from the accord.The agreement is “a part of [the SECP’s] ongoing insurance reforms,” said a press release issued by the Commission.Signatories to the agreement besides the CDC were EFU Life Assurance, Jubilee Life Insurance Company, MetLife Alico Pakistan, Adamjee Life Insurance Company, East West Life Insurance Company, Pak-Qatar Family Takaful and Dawood Family Tankful Ltd.The accord seeks the launch of a Centralized Information Sharing Solution for the Life Insurance Industry (CISSII), according to the SECP statement.The press release described the CISSII as an IT-based formal mechanism through which insurers can share specified critical information in real-time.The CISSII’s four centralized components: an agents’ register (including the s-register); a register for postponed and declined life risks; a claims register; and a group life claims experience register. The CISSII aims at enhancing protection of policyholders, as well as for greater efficiency of the life insurance industry through promotion of a formal information-sharing mechanism among life insurers for reduction of systemic risks in the life insurance industry, the press release said.On March 12, the SECP issued “a regulatory directive requiring all life insurance companies and family takaful operators to join the CISSII by April 30.“The objective of the directive was to promote a formal information-sharing mechanism by making membership mandatory for life insurance companies and family takaful operators,” said the statement.It recalled that on May 10, 2012, the SECP had constituted the Insurance Industry Reforms Committee (IIRC), which is divided into five subcommittees, to develop “a comprehensive roadmap for promoting a financially sound and technologically efficient insurance industry in Pakistan.”The IIRC Report 2014 was made public on February 27.In the absence of a formal information-sharing mechanism, the statement said, there had been lack of coordination between insurance companies on the sharing of critical information, such as that related to acceptance of claims, postponed or declined life risks, and malpractices by agents.The IIRC decided that “such a mechanism can be arranged either at the SECP level or at an independent body which has the capacity and technological wherewithal to manage a large data warehouse and support the efficient dissemination of that data,” the press release explained.The CDC has proven expertise in this area, it added.On March 21, 2013, the statement went on, “an MoU was signed by all life insurers, including family Takaful operators and the CDC…whereby the parties agreed that the CISSII should be developed, as it would be an important mechanism for greater efficiency and transparency in the life insurance industry.“The MoU also urged the life insurance/family takaful companies to enter into an agreement with the CDC and to subscribe to the CISSII [which is] to be developed and maintained by the CDC.” Attending the signing ceremony were Mohammad Asif Arif, commissioner of the SECP’s Insurance Division, the CDC’s CEO Muhammad Hanif Jakhura and other senior operators in life insurance and family takaful. State Life Insurance Corporation will sign the agreement once its chairman is appointed by the federal government, the statement said.