Proposed insurance bill seeks faster claims, stronger oversight and digital expansion

A proposed insurance bill aims to speed up the payment of claims, strengthen consumer protection and modernize the sector through digital tools and risk-based regulation, according to the Securities and Exchange Commission of Pakistan.

The draft measures call for strict timelines for settling policyholder claims and prompt resolution of disputes, along with effective action against the mis-selling of insurance products.

The bill proposes allowing foreign insurance and reinsurance companies to operate in Pakistan through branch structures. It also recommends including the private sector in the insurance of government properties and ensuring equal opportunities for private reinsurance firms in compulsory reinsurance arrangements.

The regulator has proposed granting legal status to technology-based distribution models and insurtech products to promote cheaper and faster access to insurance through digital platforms.

The SECP has also suggested introducing a permanent licensing system for insurance companies instead of frequent renewals. In addition, it recommends implementing a risk-based capital framework and a solvency management system to strengthen financial stability within the industry.

SECP Chairman Dr. Kabir Sidhu said a stable insurance sector is essential for sustainable economic growth and that the new law would provide protection to citizens, businesses, industry and agriculture. He added that digital platforms would help make insurance services more affordable and efficient.