SECP proposed Changes in insurance rules

The Securities and Exchange Commission of Pakistan (SECP) has 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 to elicit public comments, the SECP said in a statement on Friday.Last date for the comments on the revisions is Oct 19.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 the country 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 consists of the provisions prevailing from the primary law of the Insurance Ordinance of 2000 and the rules made there under.Currently, there are nine registered insurance brokers, authorised to undertake the direct insurance broking, said Commissioner Insurance Mohammed Asif Arif in a statement.He said that with the amendments, the insurance broking practices 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.”