In order to facilitate insurance policyholders in current challenging times, the Securities and Exchange Commission (SECP) has asked insurance companies to waive non-mandatory requirements for claims processing.
SECP has also advised insurers to use alternative methods for verifying the authenticity of claims.
The outbreak of COVID-19 has posed unprecedented challenges to businesses across the country. SECP has been taking measures to extend all possible relief and facilitation to companies and persons connected therewith being investors, borrowers, or policyholders, said the press release.
SECP has asked companies to consider extension in the grace period of payment of renewal premiums under insurance policies. Moreover, insurers have been encouraged to utilize digital or online payment modes for receipt of insurance premium and disbursement of claim payments, utilize electronic mediums such as SMS, emails, mobile applications, online portals, etc. for claim handling, delivery of policy documents and issuance of pre-authorizations for treatment in hospitals.
Furthermore, taking into account the anticipated low claim ratio in motor insurance business due to lockdown, SECP has recommended insurance companies to pass on the benefit of low claim ratio to motor insurance policyholders by granting one month free of cost extension in insurance coverage to all insurance policyholders.
Likewise, to provide ease of doing business, the commission has relaxed the license renewal requirements for insurance brokers, insurance surveyors, and authorized surveying officers (ASO’s) by introducing a relaxation period of two months starting from March 15, 2020, to May 15, 2020.
Insurance brokers/insurance surveyors/ASOs whose licenses have expired or might expire during this period will be able to continue to carry on their business without renewal.
SECP has also granted an exemption to insurers from the application of IFRS 16 (Leases) to the extent of their regulatory returns only till the period ended June 30, 2020.
The Commission strongly believes that such measures will facilitate the insurance industry and policyholders in coping with the disruption caused by COVID-19 pandemic and shall strengthen the confidence of policyholders in the insurance sector.