ISLAMABAD: The Securities and Exchange Commission of Pakistan (SECP) has sought public opinion to enhance the criteria in the insurance sector to disclose the details of shareholders as well as the beneficial owners.

The corporate sector regulator has issued SRO 1201(I)/2018, to elicit feedback from stakeholders, as well as general public, on the proposed direction to comply with additional fit and proper criteria in the insurance sector.

The SRO has been issued by the SECP to comply with international money laundering and illegal money transfer regulations.

Currently, the insurance sector has to provide information related to sponsors, promoters and major shareholding of insurers and insurance intermediaries to the SECP. However, the amendment has included shareholding details including details of ultimate beneficial owners.

The amendment also requires submitting an undertaking by stakeholders that they have not been convicted in criminal breach of trust, fraud, offences of money laundering, including predicate offences as provided in the Anti-Money Laundering (AML) Act, 2010, or contravened any provision of SECP-AML/Countering Financing of Terrorism (CFT) Regulations, 2018, or any other AML/CFT requirements notified by the SECP.

The regulator has directed that at the time of their incorporation, the insurers and insurance intermediaries will have to submit an undertaking signed by the sponsors, promoters and their ultimate beneficial owners.

In addition, an insurer will also have to submit an undertaking, signed by the proposed directors or chief executive or principal officer of the insurer and an affidavit on an annual basis that its key officers are not involved in money laundering or related offences.

The insurance brokers, at the time of seeking approval for issuance of license in terms of Insurance Rules, 2017, will have to submit an undertaking signed by the proposed directors or chief executive, principal officer and key officers of the insurance brokers.

The insurer, during the execution of various processes relating to insurance policies, including but not limited to the issuance, underwriting, endorsement, withdrawal, claim, or maturity, shall ensure that there does not exist any conflict of interest of the insurance intermediaries, particularly, in terms of AML Act, 2010 or SECP-AML/CFT Regulations, 2018, or any other AML/CFT requirements notified by the SECP.

It is also specified that, at the time of acquisition of a shareholding, or any part in case of non-life insurer, of more than 10 per cent in an insurance company under the Insurance Ordinance, 2000, the acquirer(s) or the authorised person in case of corporate entity shall submit an undertaking of non-involvement in money laundering related offences.

Published in Dawn, October 11th, 2018