ISLAMABAD: The Securities and Exchange Commission of Pakistan (SECP), with the assistance of GIZ Regulatory Framework for Promotion of Pro-Poor Insurance Markets in Asia (RFPI ASIA), has prepared a strategic framework for micro-insurance development.
The framework was unveiled at a Multi Stakeholder Dialogue (MSD), which was organised in Islamabad to consult with various public and private stakeholders engaged in microinsurance. According to a statement here on Thursday, the dialogue was aimed at developing a way forward on the approach to microinsurance development and secure the ownership and commitment of public and private stakeholders.
It also developed possible business concepts around microinsurance implementation and to form feasible public-private partnerships. Commissioner Insurance, Fida Hussain Samoo, highlighted the regulatory reforms instituted recently.
The Code of Corporate Governance, 2016, Bancassurance Regulations, 2015, Micro-insurance Rules, 2014, Takaful Rules, 2012, Small Dispute Resolution Committees are a few of the major reforms that have been introduced to strengthen the regulatory regime, he said.
The SECP focuses on low-income people because they face a number of vulnerabilities such as illness, accidents, disability, deaths and natural disasters. (RFPI ASIA) Program Director Dr. Antonis Malagardis emphasised the need for a clear definition of microinsurance and cited examples of inclusive insurance in development from South America, Africa and Asia.
He said that among the 380 million policy holders of microinsurance worldwide almost half of them live in Asia with product credit life followed by personal accident and property insurance. Health and agriculture are catching up in terms of numbers since they are the most complex products so they need a particular attention by the regulators and the key market players.
In the last 15 years the industry in Pakistan has experienced much development with regulated players. Tariq Bakhtawar of the SECP said that regulatory impact assessment (RIA) is the outcome of the ongoing engagement with RFPI ASIA. Talking about MEFIN, he said Pakistan is leading Technical Working Group on Knowledge Management.
Syed Nayyar Hussain said that the SECP had conducted a diagnostic study, in collaboration with the World Bank, in 2012 and SEC (Microinsurance) Rules were promulgated in 2014. The SECP is revising the regulatory framework in general and especially for microinsurance while recognising the concept of proportionality. Group discussions were conducted and product development activity was carried out by Dr Malagardis on the product development by participants.
Distinguished guests from State Bank, Commerce Ministry, Pakistan Telecommunications Authority, National Disaster Management Authority, Pakistan Microfinance Network, Pakistan Microfinance Investment Company, MFIs, Telenor, and Insurance Association of Pakistan shared their thoughts on regulatory framework and business models.
Alfalah Insurance CEO Nasar-us-Samad Qureshi agreed to work jointly to promote microinsurance. Ahmed Kamal emphasised the need for the use of studies on cost cuttings in different sectors of the economy. SBP Additional Director Muhammad Imad Uddinunderlined the need for joint efforts by all regulators and the insurance sector.