Changing Face of Life Insurance Supervision _ Regulation in Pakistan by mudoc123

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									Changing Face of Life
Insurance Supervision &
Regulation in Pakistan

Shoaib Soofi
Karachi
Saturday March 3, 2007
Key Areas
   Minimum Required Paid up Capital,
   Maximum Expense Limits,
   Solvency Margin,
   Market Conduct,
   Role of Appointed Actuary,
   Bancassurance,
   Mircro-Insurance,
   Statutory Forums,
   Review of the Insurance Ordinance 2000.
Minimum Required Paid-up-
Capital for Life Insurers
   Existing   :   Rs. 150 million

 Proposed:
 Rs. 350 million by 31st December 2007,
 Rs. 400 million by 31st December 2008,
 Rs. 450 million by 31st December 2009,
 Rs. 500 million by 31st December 2010.
Maximum Expense Limit for Life
Insurers
   Defined in April 2006

   Application starts from 2007 and reaches to ultimate
    level in 2012,

   Expenses in excess of limits would not be passed on
    to the policyholders but to the shareholders,

   Companies must start now how they would meet the
    limits,

   Appointed Actuaries are expected to play an
    important role,
Solvency Margin
   Presently no prescribed Solvency Margin for
    Life Insurers,

   A Solvency Committee constituted by SECP,

   Committee reviewing Valuation of Assets,
    Liabilities, prescription of solvency margin
    and reporting,
Market Conduct
   Regulation is reasonably drafted and may not need
    any major change,

   SECP recently started on-site inspection of life
    companies,

   Results not satisfactory,

   SECP plans to conduct on-site inspection on regular
    basis,

   On-site inspection likely to extend to agents as well,
Role of Appointed Actuary
   Appointed Actuary needs to involve more in company’s
    affairs,

   The requirement of an external actuary to be the
    appointed actuary needs to be reviewed,

   Insurance Ordinance places great reliance on the
    appointed actuary and has provided sufficient
    protection,

   Huge responsibility on the Appointed Actuary,

   SECP & PSoA need to work closely on this.
Bancassurance
   Banks acting as agents of insurance
    companies,

   Not complying with all the requirements of
    agents,

   Unrealistically high commission rates,

   SECP has started working on this.
Micro-Insurance
   Historically viewed as normal insurance on small
    scale,

   Significant differences at practical level,

   Many countries now realizing that Microinsurance
    should be viewed differently from normal insurance,

   IAIS has developed a comprehensive paper on
    Microinsurance,

   Great potential specially in low-income countries,

   Support from and Supportive to Microfinance.
Statutory Forums
 Insurance Ombudsman,
 Insurance Tribunals,
 Small Dispute Resolution Committee



        All 3 are now in place.
Review of the Insurance
Ordinance
   SECP has started review of the
    Insurance Ordinance with a view of:
     Removing Anomalies,
     More powers to SECP,
     Development of the Sector.
Thank You

								
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