SECP’s approach appreciated for development of insurance sector

• The chairman SECP assured the industry that the implementation of IFRS-17 would be done in consultation with the industry.
• The SECP team shared their vision and significance of the matters, which the entire insurance industry recognize.
• The chairman SECP assured the insurance industry participants that SECP would provide support and proactively engage with the insurance industry.

ISLAMABAD: The insurance industry has appreciated Securities and Exchange Commission of Pakistan's (SECP) collaborative approach for development of the sector.

The Insurance Association of Pakistan (IAP) held two separate consultative meetings with Chairman SECP, Aamir Khan at Karachi, said a press release issued by SECP here on Friday.

The comprehensive discussions involved challenges related to the implementation of International Financial Reporting Standard No 17 (IFRS-17) on insurance contracts.

The chairman SECP assured the industry that the implementation of IFRS-17 would be done in consultation with the industry.

The SECP team shared their vision and significance of the matters, which the entire insurance industry recognize, based on a participative and collaborative discussion.

An agreement was reached on broad future action plan with the understanding that a structured road map would be finalized for the implementation of IFRS-17 before the end of February, 2020, that would cover milestones such as gap analysis, financial impact assessment, building the framework for accounting and actuarial reporting, financial modeling, training of human resources, testing of the models and final implementation.

The chairman SECP assured the insurance industry participants that SECP would provide support and proactively engage with the insurance industry.

Another reform that was discussed in detail was how to arrive at the optimal regulatory solution to stimulate the development of the bancassurance distribution channel as well as enriching the buying and servicing experience of insurance policyholders.

The insurance sector has underwritten gross premium of Rs 71 billion through bancassurance channel in 2018 which constituted 31% of the total life insurance premium.

It was also thoroughly discussed as how to improve disclosure practices and responsible selling while expanding the insurance distribution channels.

The insurance industry also raised their concerns and issues with regards to taxation that were hindering the growth of the insurance sector.

The chairman SECP informed that he had already taken up the matter with the chairman FBR as well as the provincial revenue authorities and would continue to pursue the legitimate demands of the insurance industry with the relevant stakeholders.

Lastly, there was a discussion on the need to increase the local retention of risk for general insurance with regards to large products and the steps that needs to be taken.

The meetings ended on a very positive note with complete unanimity of the view that both the regulator and the insurance industry will work closely for the improvement of the sector.