SECP issue warning to Pakistan General Insurance company

The Securities and Exchange Commission of Pakistan (SECP) issue warning to Pakistan General insurance company, SECP has observed that the insurance company and its “Directors” are required to seek  approval of the Commission before elections of the Company’s Directors under Insurance Companies (Sound and Prudent Management) Regulations, 2012 and Insurance Ordinance, 2000.according to a SECP order issued here on Wednesday, the Commission has issued an order against The Pakistan General Insurance company where default of Regulation 2(2) of the Regulations and Section 12(1)(b) read with Section 11(1)(f)of the Ordinance has been established. The SECP has rejected the company’s impression that if the same persons are re-elected on the board as Directors of the Company then there would be no need for seeking the Commission’s approval under the said Regulations. In exercise of the power conferred on SECP under Section 63(1) and Section 156 of the Ordinance, instead of directing the Company to cease entering into new contracts of insurance or even imposing the penalty onto the Company and/or its Directors (including the Chief Executive), takes a lenient view, and thus, condone the Company and its Directors (including the Chief Executive) due to facts. Also, the Company, its Directors and the Chief Executive are hereby issued stern warning that in case of similar non-compliance in future a stronger action would be taken, SECP said. The SECP said the concerned persons have not assumed the charge of office of the Directors and the Chief Executive Officer of the Company with the approval of the Commission, thereby it appeared that the Company has contravened the provisions of Regulation 2(2) of the Regulations and Section 12(1)(b) read with Section (l)(f) of the Ordinance, for which punitive actions as provided under Section 63(1)and Section156 of the Ordinance may be invoked. Accordingly, the show cause notice was issued to the Company and its the then so-called Directors, calling upon them as to why the penalty, as provided under Section 156 of the Ordinance, should not be imposed upon the Company and/or its then so-called Directors (including the then so-called Chief Executive) for not complying with provisions of Regulation 2(2) of the Regulations, and Section 12(1)(b) and Section 11(1)(f) of the Ordinance.