Securities and Exchange Commission of Pakistan (SECP) Chairman Farrukh H Sabzwari has said that the SECP envisages recommending the federal and provincial governments to introduce much-needed compulsory occupational health insurance scheme.
Talking to Business Recorder here on Tuesday, he said that the SECP has also carried out internal restructuring of the Insurance Division, which will be complemented by capacity building of human resources, utilisation of technology-based systems for improved reporting and introduction of new supervisory processes.
He said that the SECP also intends to provide growth-conducive regulatory framework for development of alternative and technology-based distribution channels for the sale of insurance products. Moreover, the SECP initiated reviewing existing regulatory framework for bancassurance, unit linked insurance products, and illustration of life insurance benefits with focus on market development and enriching consumer experience.
Apart from review of existing legislation, new legislation is also in pipeline with regards to drafting of Principal Based Code of Conduct for Insurers and Intermediaries, Cyber Security Framework for Insurance Sector, Directive/Guidelines for Consumer Protection Ratios, Directive/Guidelines for Directive Sales Force, among others. The planned measures are expected to improve the business environment for insurance companies and will also make it favourable and safe for consumers, resulting in sector growth and expansion.
Taking cognizance of the fact that insurance penetration in Pakistan is the lowest in the region, the SECP has put enhanced focus on market development and has framed its strategic objectives around this area. Although the insurance premium has been increasing over the past years in absolute terms, yet when its contribution to GDP is analysed i.e. insurance penetration, the numbers are not encouraging. The compound annual growth rate (CAGR) from 2013-2017 of the insurance sector premium has remained 12% while the sector grew by 16% year-on-year basis in 2017.
The SECP has chalked out a comprehensive plan envisaging structural changes in its internal setup, and has mapped its strategic objectives around the area of market development and sector growth while protecting the interests of consumers. The SECP intends to form a national forum on market development of the insurance sector taking all stakeholders in the public and private sector on board. The SECP aims to rigorously work for the implementation of legally mandatory insurances, Sabzwari added.
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