ISLAMABAD: The Securities and Exchange Commission of Pakistan (SECP) has approved a new micro-insurance product aimed at providing hospitalisation coverage to low-income clients of a microfinance institution.

The approval of the product — named ‘First Sehat Tahaffuz Plan’ — under the SECP Micro-insurance Rules 2014 was in line with the objectives of the National Financial Inclusion Strategy (NFIS) recently adopted by the federal government, the commission said in a statement of Monday.

Under the NFIS, the government has committed to providing access to broad-based financial services, including insurance, to the consumers who are currently excluded from the financial sector.

Micro-insurance is considered important for bringing financial inclusion through the insurance sector.

Low-income people are more vulnerable to risk events — eg illnesses, accidents and disability — because they live and work in more hazardous conditions.

By introducing new micro-insurance products in the market, the SECP envisages that the uptake of insurance in the masses would increase manifold, increasing insurance penetration and density.

Published in Dawn, May 3rd , 2016