ISLAMABAD, April 13: Prime Minister Shaukat Aziz on Friday approved new insurance sector policy which aims at increasing penetration, removing impediments to insurance industry development and outline a more rational role of the public sector in line with the best international practices.

Chairing a meeting held here to review the insurance industry growth, the premier, in principle, also approved conversion of State Life Insurance Corporation (SLIC) into a company under the Companies Ordinance, 1984.

Commerce Minister Humayun Akhtar Khan briefed the prime minister on the performance of the insurance industry.

The premier said all public sector insurance entities should be corporatised, their boards should be restructured and more professionals should be inducted to make them efficient. The marketing departments of these companies should also be strengthened.

Mr Aziz also agreed to the proposal to open up the insurance of public property (other than strategic assets) to private companies after formulating comprehensive rules and procedures.

He took serious notice of the fact that a number of spurious insurance companies were issuing bogus third party insurance policies which were accepted by Motor Registration Offices. He directed the SECP to play a more proactive role to eliminate such practices.

The working of Postal Life Insurance also came under discussion. It was decided that the Postal Life Insurance should also comply with the insurance laws.

The prime minister said the percentage of life insurance in the country - which is 0.28pc - was the lowest in the region. The immediate goal should be to enhance it to one per cent in three years, he added.

“Life insurance is an excellent way of increasing savings, risk mitigation and has direct impact on capital formation and investment levels,” he said.

He said attention should also be paid to improving coverage and outreach in the areas of health, general and micro insurance. “Changes should be made in the overall fiscal regime in the insurance sector to motivate individuals to invest in life, health and general insurance policies”.

Earlier, the commerce ministry made a detailed presentation outlining the insurance industry growth, the issues faced by the industry and the proposed resolution of these challenges.

The ministry made suggestions to improve the spread and penetration of insurance, introduction of Takaful, the creation of a dedicated insurance institute and regulatory changes in the insurances sector.