The Securities and Exchange Commission of Pakistan (SECP) has issued a revised illustration format to improve the readability, standardise insurers' illustrative values, and safeguard prospective policyholders from any deception.
The SECP order applies to life insurance and family takaful products with savings components.
The revised requirements aim to enhance transparency in product illustrations through improved disclosures and make them simple for potential policyholders by explicit disclosure of allocation charges, clearly mentioning key disclosures with simplified format and enhanced font size.
Moreover, insurance companies have requested to reduce illustration scenarios from three to two and remove inflation-adjusted values, displaying only actual amounts allocated to policyholder accounts.
The illustration directive has been notified by the commission after extensive consultation with life insurance and family takaful companies, the Insurance Association of Pakistan and the Pakistan Society of Actuaries.
The order – S.R.O. 1088 (I)/2024 – is accessible on this webpage.