Daily Times

ISLAMABAD: The Securities and Exchange Commission of Pakistan (SECP) on Monday approved a new micro-insurance product under the SECP (Micro-insurance) Rules, 2014 with the name ‘First Sehat Tahafuz Plan’ under which micro health (hospitalisation) coverage can be provided to low-income clients of a microfinance institution. The initiative was in line with the objectives of National Financial Inclusion Strategy (NFIS) recently adopted by the federal government, and aimed at promoting and developing the micro-insurance market in Pakistan. Under the NFIS, the government has committed to providing access to broad-based financial services, including insurance to those consumers who are currently excluded from the financial sector. For the purposes of bringing financial inclusion through the insurance sector, micro-insurance is considered to be of significant importance. Most low-income people face a number of risks events like illnesses, accidents, disability, deaths, natural disasters – all events with negative effects leading to a decline in income or a rise in expenditure or both. Low-income people are more vulnerable to these risks, as they are exposed to a higher number of risks because of their more hazardous living and working conditions. Micro-insurance can play a vital role in providing social and financial protection against losses by ensuring financial shock absorbency of low-income households to both predictable and unpredictable risk events and to maintain well being. With the introduction of new micro-insurance products in the market, it is envisaged that the uptake of insurance in the masses would increase manifold, thereby, having a positive impact on the insurance penetration and insurance density levels in Pakistan.