The Securities and Exchange Commission of Pakistan (SECP) continues to take enforcement action against insurers and resolve policyholders’ complaints.
SECP has concluded adjudication proceedings against six insurance companies in July and August 2017.
Orders were issued against their chief executives, directors, and companies for violating provisions of the Insurance Ordinance, 2000. The majority of these proceedings pertained to the failure of the insurance companies to meet the sound and prudent criteria under Insurance Companies (Sound and Prudent Management) Regulation 2012, failure to settle policyholders’ complaints and non-compliance with provisions regarding reinsurance.
The SECP initiated seven new proceedings by issuing show-cause notices to insurers. These notices mainly pertained to the failure of companies to comply with directive related to know-your-customer, failure in the filing of financial statements, misstatement on the website and failure to comply with the Code of Corporate Governance for Insurers, 2016.
The underlying objective of such action was to ensure compliance with the existing insurance laws thereby protecting the interests of the shareholders and policyholders. In one of the cases, the company was directed to cease entering into new contracts of insurance.
The company was further directed to settle all policyholders’ complaints/liabilities. In another case, a company placed 95% of the risk abroad and circumvent the requirements of Rule 18 of the Insurance Rules, 2017 of circulating the risk in the market and obtaining the Commission’s permission.
Furthermore, the SECP disposed of 75 complaints pertaining to insurance policyholders since July. It expeditiously addressed the complaints filed by insurance policyholders or their legal heirs against the insurance companies.
The SECP in its resolve to provide timely relief to the policyholders disposed of 75 complaints at the start of this financial year. Most of these complaints were settled to the satisfaction of the policyholders as they were given appropriate relief in respect of their complaints.
Accordingly, a relief of Rs5,352,866 was provided to the policyholders through complaints resolution during these two months. Effective and efficient resolution of complaints of the aggrieved policyholders reflects the SECP’s commitment to reforming and developing the insurance industry.