Violation of rules: 48 insurance companies issued show-cause notices in 2008-09: SECP report

The Securities and Exchange Commission of Pakistan (SECP) has issued a total of 48 show-cause notices to insurance companies for non-compliance of Companies Ordinance, 1984 and other related rules/regulations during 2008-09. Sources told Business Recorder here on Thursday that three directions under section 170 and four directions of different insurance companies under Section 472 have been given notices to comply with the regulatory requirements.
According to SECP report, the on-site inspection of five companies has been conducted which revealed significant non-compliances and violation of relevant laws and regulations. Companies which were inspected 'on site' by the Commission included Beema Pakistan Company Limited, Progressive Insurance Company Limited, North Star Insurance Company Limited, Credit Insurance Company Limited and Takaful Pakistan Limited.
The report said that due to default of various provisions of the Insurance Ordinance, 2000 the business of 12 insurance companies was ceased to enter into new contracts of insurance in the best interests of the policyholders. Twelve companies are under the process of winding up due to material non-compliances of the law as specified under Section 305 of the Company Ordinance, 1984.