The Securities and Exchange Commission of Pakistan (SECP) will bring reinsurance brokers under its jurisdiction with a proposed amendment to the country’s insurance legislation.
Under the existing law, the Insurance Ordinance of 2000, only direct insurance brokers are under the regulation of the SECP. The new version states that all reinsurance brokers must be registered with the government, and that any probable conflict of interest must be eliminated. Submission of periodic statements to the SECP will also be required.
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The Draft Insurance Bill aims to develop Pakistan’s reinsurance market by introducing criteria for registration of local reinsurers, such as paid-up capital, statutory deposit, solvency requirements, and others. It also contains guidelines for the registration of foreign reinsurers planning to operate in Pakistan.
In addition, the bill states that each insurer should notify the SECP of any treaty or reinsurance agreement it enters as a cedant at least one month before the arrangement comes into effect. However, all existing reinsurance agreements will remain valid until their date of expiry, following which the parties must comply with the requirements set in the bill.
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