“Navigating the Regulatory Landscape: SECP’s Efforts to Modernize Insurance Legislation”​

The Securities and Exchange Commission of Pakistan (SECP) has been proactively modernizing the country’s insurance legislation to enhance sector resilience, financial stability, and consumer protection. Key initiatives include:

1. Capital Requirement Enhancements: In March 2025, the SECP’s Policy Board approved amendments increasing the minimum paid-up capital for insurance companies. Non-life insurers are now required to maintain a minimum paid-up capital of Rs 2 billion, while life insurers must meet a threshold of Rs 3 billion, with full compliance expected by 2030. This measure aims to bolster the industry’s risk absorption capacity and financial stability. citeturn0search0

2. Introduction of Subordinated Debt Instruments: The SECP has introduced a framework allowing insurance companies to issue subordinated debt instruments, defining their treatment for solvency purposes. This initiative provides insurers with alternative capital-raising avenues, enhancing financial flexibility and creditworthiness. citeturn0search0

3. Regulatory Amendments for Digital Distribution: In October 2024, the SECP issued regulatory requirements facilitating the sale of life insurance savings products through technology-based channels. This move encourages digitalization within the sector, aiming to attract a broader customer base through innovative distribution methods. citeturn0search3

4. Establishment of a Centralized Insurance Information Bureau: The SECP is considering amendments to the Insurance Ordinance to establish a centralized insurance information bureau. This initiative aims to enhance regulatory governance and address challenges related to data accessibility and digitalization within the insurance sector. citeturn0search2

5. Digitalization Initiatives: The SECP has prioritized the digitalization of the insurance sector, including the development of an insurance policy finder and an auto insurance repository. These tools aim to facilitate policy tracking and enforce compulsory motor third-party insurance, enhancing transparency and consumer access to information. citeturn0search11

These efforts reflect the SECP’s commitment to modernizing Pakistan’s insurance regulatory framework, aiming to create a more robust, transparent, and consumer-friendly insurance environment.