Life insurance, family takaful illustrations: SECP revises growth rate scenarios

The Securities and Exchange Commission of Pakistan (SECP) has revised the growth rates scenarios for life insurance and family takaful illustrations for 2016 and onwards. According to circular 46 issued by the SECP here on Monday, attention is drawn towards clause 5.1 and 7.2 of the "Guidelines for Life Insurance and Family Takaful Illustrations 2009" issued vide Circular No 39 of 2009 dated December 24, 2009.
Life insurers and family takaful operators use three growth rate scenarios to demonstrate projected benefits to potential policyholders and the SECP specifies these scenarios based on long-term interest rate outlook prevalent in Pakistan. As interest rates have gradually decreased in the country, accordingly, the growth rates scenarios for life insurance and family takaful illustrations have been decided by the SECP to be 6%, 8%, and 10% for the year 2016 and onwards.
All new illustrations of life insurers and family takaful operators on or after February 1, 2016, should be made on the above stated scenarios. All insurers and family takaful operators are required to submit sample illustration for each product with this office on or before the aforementioned date, the SECP added.