Life insurance savings products: Regulatory requirements for sale issued

ISLAMABAD: The Securities and Exchange Commission of Pakistan (SECP) has issued regulatory requirements for the sale of life insurance savings products through technology-based distribution channels by life insurers.

The SECP has issued S.R.O.1501(I)/2024 here on Thursday in this regard.

According to the new regulatory requirements, the SECP has issued a directive called the “Directive for Sale of Life Insurance Savings Products through Technology-Based Distribution Channels, 2024”.

This directive shall come into force after three months of the date of publication in the official Gazette.

The life insurers and family takaful operators may distribute savings products through technology based distribution channels under the following two broad product categories, subject to compliance with other regulatory requirements, as are applicable on life insurance products:- Category-A Products and Category-B Products.

The SECP has also issued in detail the minimum requirements and features for these Category-A Products and Category-B Products.

The SECP explained that the life insurers and family takaful operators may distribute savings products under category-A and B, which shall comply with the features and requirements as described.

The requirements of the regulatory framework i.e. the rules, regulations, notifications and circulars issued under the Insurance Ordinance, 2000 or the SECP Act, 1997 shall not be applicable in respect of those matters which are specifically provided. Save as provided above, all the other

applicable regulatory requirements of the regulatory framework shall be applicable on life insurance savings products distributed through technology based distribution channels.

The SECP stated within six months of the date of notification of this directive in the official Gazette, all life insurers shall offer at least one life insurance savings product under category- A and category B through its own website or mobile application and place its savings products under category A and category B on an independent platform providing online aggregation/comparison services.

The insurer shall develop adequate technological capability to conduct the operations digitally in the areas of customer engagement, customer enrolment, distribution, administration, servicing, claim processing and/or any other aspect of its core operations.

This may include inter alia the necessary resources to carry out the business operations, the availability of back-up system for business continuity planning and disaster recovery and arrangements to protect the confidentiality of policyholder data, SECP added.

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