The Securities and Exchange Commission of Pakistan (SECP) has laid down minimum paid-up capital requirement of Rs 650 million and Rs 450 million for life-insurers and non-life insurers as on June 30, 2017 onwards to carry out insurance business.
According to the Insurance Rules, 2017 issued by the SECP here on Monday, the Commission has specified minimum paid-up capital requirement of Rs 700 million and Rs 500 million for life-insurers and non-life insurers respectively as on December 31, 2017. Under the rules, the SECP has laid down minimum required amount of paid-up capital for an insurer registered under the Insurance Ordinance to carry on insurance business.
The SECP has also explained the annual supervision fee to be paid by an insurer. Every insurer registered under the Ordinance shall pay to the Commission, on or before the fifteenth day of January in every calendar year, an annual supervision fee at the rate of Rs 2.00 per thousand of gross direct premium written in Pakistan during the calendar year preceding to the last year, subject to a maximum of Rs 50 million. The SECP has also laid down conditions for licensing of insurance surveyors under the new rules.
According to the requirements for insurance broker's licence, the SECP has prescribed qualifications of a company for issuance of an insurance broker's licence. It included a minimum paid-up share capital of not less than fifteen million rupees for an insurance broker to be registered in Pakistan. Provided that existing licensed insurance brokers who have paid up capital less than the minimum required amount shall comply with enhanced requirement of the paid-up capital by December 31, 2017. There should be cash or approved securities to the value of ten percent (10%) of the minimum prescribed paid-up capital of the insurance broker, deposited with the State Bank of Pakistan. Provided that existing licensed insurance brokers shall comply with the requirement of statutory deposit by December 31, 2017.
The prescribed qualifications of a company for issuance of an insurance broker's licence also included professional indemnity insurance to a limit of thirty million rupees for any one occurrence. The SECP said that every registered insurance broker shall maintain a net equity, which is total assets of the insurance broker over its total liabilities, of at least following percentages of their minimum paid-up capital, as per the specified schedule.