ISLAMABAD: The Securities and Exchange Commission of Pakistan (SECP) has provided a relief of over Rs5.35 million to policyholders through complaints resolution from concluded adjudication proceedings against six insurance companies in July and August.

The majority of these proceedings related to the failure of the insurance companies to meet the regulatory criterion under the Insurance Companies (Sound and Prudent Management) Regulation 2012 and to settle policyholders’ complaints and non-compliance with provisions regarding reinsurance.

Orders were issued against the chief executives, directors and companies for violating provisions of the Insurance Ordinance 2000. The SECP disposed of 75 complaints pertaining to insurance policyholders since July. “The need for an effective and efficient complaint resolution for aggrieved policyholders is essential and it reflects the SECP’s commitment to reforming the insurance industry,” a spokesman for SECP said in a statement on Thursday.

The commission initiated seven new proceedings by issuing show-cause notices to insurers, which were mainly due to the failure of companies to comply with directive related to know-your-customer, failure in filing of financial statements, misstatement on the website and failure to comply with the Code of Corporate Governance for Insurers, 2016.

The underlying objective of such action was to ensure compliance with the existing insurance laws thereby protecting the interests of the shareholders and policyholders.

The SECP spokesman highlighted that in one of the cases, the company was directed to cease entering into new contracts of insurance, and the company was further directed to settle all policyholders’ complaints and liabilities.

In another case, one company placed 95 per cent of the risk abroad and circumvented the requirements of Rule 18 of the Insurance Rules, 2017 of circulating the risk in the market and obtaining the Commission’s permission.

Published in Dawn, August 25th, 2017