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Apr 2025

Pakistan: Regulator to revamp insurance regulatory framework, increase minimum capital

Source: Asia Insurance Review | Apr 2025

The policy board of the Securities and Exchange Commission (SECP), which regulates the insurance and other non-bank financial sectors, has approved major amendments to the insurance regulatory framework.
 
This framework includes the Insurance Rules, 2017, Insurance Accounting Regulations, 2017, and General Takaful Accounting Regulations, 2019.
 
In a statement, the SECP said, “The amendments are aimed at strengthening the insurance regulatory framework by enhancing industry resilience, addressing key sectoral challenges, diversifying capital sources and streamlining reporting requirements.” 
 
Major amendments approved by the policy board include:
  • An increase in the minimum capital requirements for life and non-life insurance companies. The minimum paid-up capital is to be raised to PKR2bn ($7.15m) for non-life insurers and PKR3bn for life insurers, with a phased implementation timeline extending until 2030
  • Expansion of insurers’ access to alternative fund-raising avenues by introducing an enabling framework for insurers to issue subordinated debt instruments and defining the treatment of these instruments for solvency purposes
  • Addressing the concerns of the life insurance industry in respect of holding a specified percentage of government securities against advance/withholding tax, which has been relaxed
  • Allowing non-life insurers with substantial takaful operations to present their complete takaful results alongside conventional business results. Supporting notes will offer a detailed breakdown of both conventional and window takaful operations, ensuring greater transparency in financial reporting. A 
 
 
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