As part of its aim to promote digitalization and foster innovation in financial services, the Securities and Exchange Commission of Pakistan (SECP) has published a draught registration regime for digital-only insurers and specialised micro-insurers for public feedback.
The draught framework, which is being suggested as changes to the Insurance Rules, 2017, specifies the registration criteria for businesses seeking to operate only through digital channels and for businesses seeking to transact small ticket size insurance, i.e., microinsurance.
Additionally, the draught specifies rules for business behaviour, including technological capability, permissible classifications of business, a necessity to perform pilot operations prior to conducting full-scale operations, cyber-security, product filing requirements, and consumer fairness.
The plan, which is based on global trends toward digital-only insurers, will be augmented by recent changes in the payment systems landscape.
Additionally, the new framework does not exclude existing organisations from underwriting microinsurance or disseminating insurance via digital channels.
The proposed reforms aim to promote innovation, increase competition, broaden product offerings, and increase financial inclusion by lowering entry barriers through flexible regulatory standards for minimum paid-up capital and solvency.
The suggested revisions, as well as a position paper outlining the proposed framework, are available on SECP’s website.
