The Securities and Exchange Commission of Pakistan (SECP) has recently released a comprehensive Diagnostic Study, providing a detailed analysis of the current landscape of motor third-party insurance in the country.
The study’s main objective is to offer a holistic overview of the legal framework governing motor third-party insurance, the current state of motor insurance, challenges in implementation and enforcement, recent initiatives by SECP, and recommendations for the way forward.
SECP aims for this study to serve as a foundation for collaborative discussions and action planning among key stakeholders, including central and provincial authorities, SECP, and the insurance sector, to effectively implement motor third-party insurance in Pakistan.
According to the study, motor insurance coverage in Pakistan is a mere 3 percent, significantly lower compared to other major countries in the region.
The current status of motor third-party insurance in the country demands immediate attention. To increase motor insurance coverage and ensure compliance with mandatory motor third-party insurance, the study provides policy recommendations for a multifaceted reform agenda. The study emphasizes the importance of effectively implementing existing laws while simultaneously expediting amendments to the Motor Vehicles Act of 1939.
The comprehensive study is the result of extensive data collection and consultations with insurance companies conducted through the Insurance Association of Pakistan.
With the release of this study, SECP aims to address the challenges in the motor insurance sector and pave the way for increased motor insurance coverage in Pakistan. By taking concrete steps based on the study’s recommendations, the country can work towards a more robust and effective motor third-party insurance system.