ANL 14.75 Increased By ▲ 0.18 (1.24%)
ASC 14.00 Increased By ▲ 0.45 (3.32%)
ASL 15.10 Increased By ▲ 0.50 (3.42%)
BOP 8.60 Increased By ▲ 0.18 (2.14%)
BYCO 6.69 Increased By ▲ 0.19 (2.92%)
FCCL 18.80 Increased By ▲ 0.70 (3.87%)
FFBL 26.50 Increased By ▲ 0.20 (0.76%)
FFL 11.19 Increased By ▲ 0.04 (0.36%)
FNEL 10.89 Decreased By ▼ -0.01 (-0.09%)
GGGL 15.70 Increased By ▲ 0.45 (2.95%)
GGL 32.11 Increased By ▲ 0.31 (0.97%)
HUMNL 6.35 Increased By ▲ 0.14 (2.25%)
JSCL 17.26 Decreased By ▼ -0.03 (-0.17%)
KAPCO 33.25 Increased By ▲ 1.85 (5.89%)
KEL 3.23 Increased By ▲ 0.02 (0.62%)
MDTL 2.27 Increased By ▲ 0.07 (3.18%)
MLCF 36.45 Increased By ▲ 2.34 (6.86%)
NETSOL 102.16 Increased By ▲ 3.66 (3.72%)
PACE 4.40 Increased By ▲ 0.14 (3.29%)
PAEL 23.55 Increased By ▲ 0.40 (1.73%)
PIBTL 7.70 Increased By ▲ 0.10 (1.32%)
POWER 6.76 Increased By ▲ 0.11 (1.65%)
PRL 13.93 Increased By ▲ 0.23 (1.68%)
PTC 9.07 Increased By ▲ 0.20 (2.25%)
SILK 1.35 No Change ▼ 0.00 (0%)
SNGP 41.80 Increased By ▲ 1.09 (2.68%)
TELE 16.93 Increased By ▲ 0.50 (3.04%)
TRG 90.51 Increased By ▲ 3.66 (4.21%)
UNITY 25.30 Increased By ▲ 0.10 (0.4%)
WTL 2.15 Increased By ▲ 0.01 (0.47%)
BR100 4,665 Increased By ▲ 4.73 (0.1%)
BR30 18,674 Decreased By ▼ -129.79 (-0.69%)
KSE100 45,072 Decreased By ▼ -257.67 (-0.57%)
KSE30 17,430 Decreased By ▼ -120.87 (-0.69%)

Coronavirus
LOW Source: covid.gov.pk
Pakistan Deaths
28,728
1024hr
Pakistan Cases
1,284,840
47524hr
1.12% positivity
Sindh
475,616
Punjab
443,094
Balochistan
33,479
Islamabad
107,689
KPK
179,995

The Securities and Exchange Commission of Pakistan (SECP) has declared that a leading insurance company has failed to check rampant mis-selling of the insurance products through specified persons/insurance consultants, deputed at bank branches, who promise doubling of investments in a few years.

According to an order issued by the SECP Insurance Division Friday, a penalty of Rs 400,000 has been imposed on the insurance company management.

The chief executive, directors, head of bancassurance and head of compliance of the company have turned a blind eye to this menace of mis-selling. Had the measures been put in place, as claimed by the company, such large number of complaints from across the country would not have been received.

The respondents (senior management of the company) failed to address mis-selling despite two earlier warnings and an Order issued to the company. To protect the interest of the policyholders, this practice of mis-selling of the insurance products must immediately be addressed by acting against the culprits, the SECP added.

"Without fully explaining the features and applicable charges of insurance products ie front-end fee, commission and other charges etc, which are deducted up-front, the prospective policyholders are misled/lured to invest in profitable investment schemes with false promises of their redemption at any time without any loss. Some policyholders even complained that they were promised by the specified' persons/insurance consultants to double the investment in few years.

Few complainants were not even aware that an insurance product was sold to them while completing the formalities for opening a bank account. The company has failed to comply with financial underwriting requirements, free look period requirements and provision of periodic unit statements etc," the SECP officials said.

In a nutshell, the insurance company's management is advised to take effective measures in order to curb the malpractices and irregularities, as narrated in the bancassurance business.

The Commission shall closely monitor the complaints against the Company and if such malpractices and irregularities in the sale process of bancassurance products are observed recurrently in the future, the Commission may proceed against the Respondents under provisions of the Ordinance.

In case similar mis-selling complaints are received from the policyholders against the company, the Commission may direct the company to stop offering its products through bancassurance distribution channel and may also proceed against the respondents under Section 65 of the Ordinance.

The company is directed to require the banks to seek an undertaking from specified persons selling insurance products at the front desk of the bank branch to comply with the code of conduct prescribed in Regulation 11 of the Regulations.

The company shall also enter detail of the specified person in the centralized agents (S-Reference) register maintained by CDC under CISSII, if the said person is failed to comply with the code of conduct or he is found indulged in mis-selling of insurance products to the policyholders.

The company shall establish procedures which will ensure that due consideration is given to the S-Reference register, which contains codified misconduct details of insurance agents, at the time of recruitment/certification of specified persons by the bank or the company, the SECP added.

Copyright Business Recorder, 2019

We love hearing your feedback, please help us improve by answering these few survey questions

Comments

Comments are closed.