Insurance companies: SECP issues criteria for CEOs appointment

ISLAMABAD: The Securities and Exchange Commission of Pakistan (SECP) has directed the insurance companies to appoint their chief executive officers/principal officers or directors who will comply with the SECP’s fit and proper criteria.

The SECP has issued SRO 1015(I)/2022 to amend the Insurance Companies (Sound and Prudent Management) Regulations, 2012. According to the revised regulations, no insurer shall appoint a person as its chief executive or principal officer or director who does not comply with the fit and proper criteria provided in these regulations and without approval of the Commission.

In order to assess the fitness and propriety of proposed persons, the insurer shall seek information as per the requirements of these regulations at the time of election of directors or appointment of chief executive or principal officer or director, as the case may be. An insurer shall, for appointment or re-appointment or any change of its directors or chief executive or principal officer, follow the following procedure for obtaining approval of the Commission:

In the case of directors, the insurer shall within 7 days after the election of directors, submit application with the Commission for appointment of its elected directors and within ten days from the date of appointment of the chief executive or principal officer by the board of directors, the insurer shall submit an application for appointment or reappointment of the chief executive or principal officer.

In case of occurrence of any casual vacancy in respect of a director or chief executive or principal officer, the insurer shall submit an application within 10 days of the appointment of the director or chief executive or principal officer by the board of directors, SECP maintained.

Where the board of directors of an insurer decide to remove its chief executive or principal officer before the expiration of his term of office or the chief executive or principal officer decides to tender his resignation before the completion of his term of office, the insurer shall immediately inform the Commission along with reasons for the same.

In the case where appointment of chief executive or principal officer or nomination of director on the board of directors of an insurer is made by the Federal Government, the insurer shall submit application within 10 days of the appointment or nomination, as the case may be, by the Federal Government in this regard.

Provided that the insurer shall, prior to the appointment or nomination, as the case may be, by the Federal Government, directly or through the concerned ministry, seek clearance from the Commission on the fitness and propriety of the proposed persons and any deficiency or shortcoming in the information or documents submitted by the insurer to the Commission shall be rectified by the insurer within 14 days of the issue of the letter by the Commission informing the insurer of the deficiency or shortcoming. The chief executive or the principal officer of an insurer shall be a full-time employee of the insurer, SECP added.

Copyright Business Recorder, 2022