The Securities and Exchange Commission of Pakistan (SECP) has published a draught registration regime for digital-only insurers and dedicated micro-insurers for public feedback as part of its aim to promote digitization and stimulate innovation in financial services.
The draught framework, which was suggested through modifications to the Insurance Rules of 2017, lays out the registration criteria for businesses that wish to operate only through digital means and for entities that want to transact small ticket size insurance, also known as micro-insurance.
In addition, the document specifies business behaviour standards such as technological capability, permissible classes of business, a necessity to begin pilot operations before to full-scale launch, cyber-security, product filing requirements, and fair treatment of customers, among others.
The project will be reinforced by recent advancements in the payment systems environment, which are based on global developments affecting insurers functioning on a digital-only basis.
Furthermore, the new framework does not exclude existing organisations from underwriting micro-insurance or disseminating insurance via digital channels.
The proposed revisions aim to foster innovation, boost competition, broaden product offerings, and improve financial inclusion by lowering entry barriers through more relaxed regulatory standards in terms of minimum paid-up capital and solvency.
The suggested revisions, as well as a position paper outlining the proposed framework, are available on SECP’s website.