Foreign investment: Ministry under pressure to open up insurance sector

ISLAMABAD: Commerce Ministry is reportedly under pressure to open insurance sector for international investment and divestment of insurance companies, as SECP has tailored an Insurance Ordinance which is under consideration in the Ministry, well informed sources told Business Recorder.

This issue was recently debated at a meeting of Working Group of Special Investment Facilitation Council (SIFC), presided over by Secretary Finance, Imdad Ullah Bosal.

Chairman SECP Akif Saeed stated that draft Insurance Ordinance had been shared with the Ministry of Commerce and SECP was willing to assist the Ministry for timely examination of the case.

SECP holds meetings with insurance cos on digitization of insurance sector

The divestment is to be led by M/o Commerce, whereas the SECP should expedite recommendations on the regulatory part so the discussion went.

Ministry of Commerce responded that the draft Insurance Ordinance is being examined in consultation with the stakeholders. Chairman SECP offered assistance to M/o Commerce in the examination of the draft Ordinance for timely completion of the exercise.

The sources said that Special Investment Facilitation Council (SIFC) has endorsed policy objectives for insurance sector reforms with a view to increase competition, access for international companies, strengthening enforcement, Corporati-sation/divestment of public sector insurance companies and making insurance sector compliant with the global practices.

Commerce Ministry, sources said, has been directed to must work towards achieving the policy objectives at the earliest and should also include SECP in the consultative process.

It was also decided that as far as the investment in insurance sector is concerned, a meeting should be held by M/o Commerce with Finance Division and SECP to explore possibility of investment in the insurance sector. Commerce Ministry was tasked to update this issue in the next meeting of Working Group.

On pending payments to international entities including Digital Cooperation Organisation (DCO), Additional Finance Secretary (External Finance) noted that the data of 55 entities has been shared by the Ministries/ Divisions/ Departments and PSEs regarding Pakistan’s mandatory contribution/ subscription to International Agencies during 2023-24. The information was consolidated. In so far as compiling of data of all concerned entities, the matter is being pursued with other Ministries and will be compiled soon.

He further stated that Finance Division had released an amount of $43.606 million. Further, 35 cases of foreign exchange release for payment of contribution having an impact of $2.53 million are under consideration which will be released in a phased manner soon.

According to the Additional Finance Secretary (EF) during CFY 2023-24, EF Wing released FE cover of US$ 20,560 and Australian Dollar 4,552 in favour of Ministry of IT&T for making payment of contribution towards Asia Pacific Telecommunity (APT) for the year 2023 and Asia Pacific Network Information Centre (APNIC) for the period from Jan 2023 to February 2024. No request of M/o IT&T is pending at present.

Additional Secretary Ministry of IT&T requested that there is now a new additional requirement of US$ 350,000 for which, M/s IT&T would approach Finance Ministry.

The meeting decided that M/o IT&T may approach Finance Division for its additional requirement at the time of budget estimates of next FY 2024-25. It was clarified that allocations for any additional requirements would be subject to availability of fiscal space at the time of budget making for the next financial year.

On the issue of negotiation process for resolution of pending issues with M/s Etisalat, the meeting was informed that the caretaker Finance Minister had personally been coordinating earlier negotiations. The meeting decided that Additional Secretary Finance (Corporate Finance) would speak to the Pakistan’s Envoy to the UEA to follow-up on the letter written by the caretaker Prime Minister to the top brass of UAE.

During discussion on MoU with UAE, Additional Finance Secretary (Internal Finance) informed the meeting that the agri-stock monetization was in progress. Feasibility study for establishment of private equity fund has been completed.

Consultants had been engaged in the Fund. Ministry of National Food Security & Research was also coordinating with the Government of Kuwait for investment in agri-warehouses and there was also potential of investment in insurance sector.

The meeting decided that Internal Finance (IF) Wing of Finance Ministry will ensure timely evaluation of equity fund and share progress update in the follow up meeting.

IF Wing to hold meeting with M/s NFS&R to follow up on the progress with the Government of Kuwait for investment in agri-warehouses initiative.

Copyright Business Recorder, 2024