The Securities and Exchange Commission of Pakistan (SECP) has detected as many as 95 applicants apparently registered who were issued certificates illegally during the period from August 20, 2000 to August 2005 to act as insurance surveyors retrospectively under the repealed Insurance Act 1938. This was apparently done to avoid compliance of more stringent requirements of Insurance Ordinance 2000.
To accommodate applicants, intending to act as insurance surveyors/authorised surveying officer, who were unable to meet the requirements of the Ordinance and Rules 2002 certificates were issued by the defunct Controller of Insurance while holding the position of Executive Director (Insurance).
The entire processing of the cases, in question, and issuance of certificates under the repealed Act after promulgation of the Ordinance, and regularisation, thereafter, was incomplete and ultra vires.
The executive director (Insurance) prima facie, in connivance with Assistant Director handled fresh applications as junior executive during the period when these illegal acts were committed and without ensuring compliance of the relevant provisions of the applicable laws issued back dated certificates of insurance surveying. Also, the officials effected renewal certificates without ensuring fulfilment of the requirements applicable during the five years transitional period.
According to details available here on Monday, for a person to hold an appropriate insurance surveyor's certificates which qualifies him to survey/assess or adjust a loss/damage Section 44-A and 44-B, through an amendment in 1958, were inserted in the repealed Insurance Act 1938. Sub-section 4 of Section 44-A of the repealed Act specified the procedure/process for attending to an application for issuance of insurance surveyor certificate by the Controller of Insurance.
Rules of the repealed Insurance Rules laid down the specific requirements to be fulfilled by an applicant before granting of a certificate to act as an insurance surveyor by the Controller of Insurance. The Controller prescribed requirements for issuance of certificate and renewal of a certificate, respectively.
Under the repealed Act, both natural person and corporate body were allowed to apply and act as an insurance surveyor proved they met the laid down requirements. Position, however, changed following the promulgation of Insurance Ordinance 2000. Under the Ordinance, only a company with a prescribed minimum share capital and subject to meeting the other requirements is entitled to apply for to hold a license to act as an insurance surveyor.
Only those natural persons, who are either directors, officers or employees of a company licensed to act as an insurance surveyor under the Ordinance, are entitled to apply for registration as authorised surveying officers to conduct insurance survey.
A good number of insurance surveyors, during the given five years' transitional period, failed to promptly act to comply with the requirements of the relevant sections/rules. Further anomalies and weaknesses in the relevant rules and inconsistencies therein with the concerned sections of the Ordinance were identified.
The amendments in the insurance surveyors rules finalised in consultation with Surveyors and Adjusters Association of Pakistan, in June 2008 have been forwarded by SECP to the Ministry of Commerce for notification.
Under the repealed Act, insurance revenue stamps were required to be affixed in respect of the fees applicable for fresh application/renewal of certificate of insurance surveyor as provided in the rules. Under the Ordinance, the relevant fee is required to be deposited in the designated bank, and the applicant along with his application submits copy of the deposited challan, as evidence of payment of the fee.
SECP found out that stamps affixed in majority of the cases had not been defaced. Also, written test/interview for an applicant to demonstrate that he is fit to act as an insurance surveyor was not conducted in all 95 cases. Evidence of maintaining professional indemnity insurance cover had also not been complied with in any of these cases.
All these cases neither have initials of any of the concerned officials nor the stamping/diary of the receipt of the applications by the Department of Insurance and a good number of certificate holders did not seek renewal of their certificate beyond August 2005.