Names on ECL: Bigwigs of insurance companies required to inform SECP about status

SOHAIL SARFRAZ

ISLAMABAD: The existing and proposed directors/CEOs/ principal officers of the insurance companies would be required to inform Securities and Exchange Commission of Pakistan (SECP) about placement/non-placement of their names on the exit control list (ECL). The SECP has amended Insurance Companies (Sound and Prudent Management) Regulations, 2012 through an SRO.1165(I)/2016 issued here on Monday. The said regulations are applicable on chief executives, principal officers of insurer, directors of the insurer and key officers of the insurer.

The proposed director/ CEO/ principal officer shall provide an affidavit to the insurer, on whose board he/she is to be appointed, confirming the placement / non-placement of his/her name on the ECL, which shall be filed with the SECP along with the application for seeking approval under the Insurance Companies (Sound and Prudent Management) Regulations, 2012. All existing directors/CEO/principal officer of an insurer shall also provide the said affidavit to that insurer, which shall be filed with the SECP within a period of one month from the date of coming into effect of the said clause.

A director or chief executive or principal officer subject to fit and proper criteria shall report any change with reference to his/her financial soundness to the insurer within three business days and the insurer shall within a period of seven business days report the same to the commission, the SECP added.

The commission said that a proposed director or chief executive or principal officer shall submit an affidavit to the commission affirming under the oath that the person and the companies, firms, sole proprietorships, etc where the person is a chief executive, director (other than nominee director), owner or partner, etc have no overdue payment of any financial institution. Provided that in case of overdue in the CIB report, no rejection shall be made unless the person has been given opportunity of making a representation before the approving authority in order to clarify his position in the matter within 30 days of notice sent by the commission.

A proposed director or chief executive or principal officer shall not be considered as a fit and proper person if any overdue/past due payment to a financial institution, irrespective of amount, is appearing in the overdue column of the latest CIB report of the person and of the companies, firms, sole proprietorships, etc where the person is a chief executive, director (other than nominee director), owner or partner, etc, the SECP said. Provided that the following exceptions may be granted by the commission for the purpose of this clause in case, where amount overdue is under litigation and the same is also appearing as amount under litigation in the CIS report; or no overdue payment is appearing in the overdue column in the subsequent latest CIB report. A proposed director or chief executive or principal officer shall not be considered as a fit and proper person if his name is placed on the ECL maintained by the Ministry of Interior, the SECP added.