Islamabad, April 28, 2016 (PPI-OT):The Chairman, Securities and Exchange Commission of Pakistan (SECP), Zafar Hijazi, said that a vibrant and well regulated insurance sector is the most lending force contribution towards economic and social progress of Pakistan. He said that the SECP has a strategic priority and commitment to strengthen and maintain an effective regulatory environment for the insurance industry.
He was addressing the SECP’s financial reporting workshop for journalists conducted here on Thursday. The workshop aimed at highlighting the significance of the insurance sector, bring out the issues and discuss the SECP’s initiatives for the promotion of the insurance sector.
Mr. Hijazi said that insurance serves a number of valuable economic functions that are largely distinct from other types of financial intermediaries. Insurance greatly contributes to economic growth by improving the investment climate and enabling economic activities that would not be possible without risk management.
Deputy Governor of the State Bank of Pakistan (SBP) Saeed Ahmad also addressed the journalists and briefed them on importance of insurance sector. He also appreciated the SECP for conducting workshop for the media professionals.
Mr. Hijazi said the SECP is regulating the business of the insurance industry in a way to ensure the protection of the interests of insurance policy holders and to promote sound development of the insurance industry. He informed the participants that the SECP’s insurance Division is equipped with qualified manpower, which includes an actuary, CAs, CMAs, ACCAs, MBAs, FLMIs and master’s in risk management.
In the workshop, the SECP officials gave presentation on SECP’s regulations for insurance industry, the overall preview of the insurance industry in Pakistan and about recent initiatives and reforms taken for the development of insurance industry.
Ali Azeem Akram, the head of Insurance Division of the SECP, informed the participants that in Pakistan the insurance premiums grew at the percentage of 15 percent over last five years. In 2014, the cumulative premium of the industry was Rs131 billion for life insurance and Rs68 billion for non-life insurance. He said the penetration of insurance is increasing in Pakistan, but it is still very low as compare to other countries.
The penetration for life insurance is 0.51 percent whereas it is 0.26 for non-life insurance. Insurance density, which is per capita expenditure on insurance measured as ratio of premium to population is 10.40, he told participants.
The SECP has taken a number of steps and facilitation measures to strengthen its role as an effective facilitator for sound development of the insurance and takaful industry, and to protect the interest of policyholders and raising the insurance penetration level, he said. For the ease of policy holders, the insurance companies have been bound to provide all the information about insurance product, policies and conditions, insurance benefits in Urdu to policy holders. Moreover, he said, the SECP has also translated insurance related laws and related information in Urdu for easy understanding of policy holders and other stakeholders.
The paid-up capital requirements, solvency requirements and statutory deposit requirements for insurance companies have been increased. The SECP has constituted small dispute resolution committees for effective and efficient resolution of the complaints of the aggrieved policyholders. Moreover, Ali Azeem said, to ensure improved corporate governance the SECP has recently introduced a Code of Corporate Governance for insurance industry.
For more information, contact:
Shakil Ahmad Chaudhary
Head, Internal and External Communication
Securities and Exchange Commission of Pakistan (SECP)
NIC Building, 63 Jinnah Avenue, Islamabad
Tel: +92-51-9214005 or +92-51-9214009 (Ext. 378)