SECP Issues Draft Regulatory Framework for Digital-only Insurers & Micro-Insurers

The Securities and Exchange Commission of Pakistan (SECP), as part of its agenda to promote digitalization and encourage innovation in financial services, has introduced a draft registration regime for digital-only insurers and dedicated micro-insurers for seeking public comments.


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The draft framework, proposed through amendments in Insurance Rules, 2017, sets out the registration requirements for entities desirous to operate through digital mode only and for entities wanting to transact small ticket size insurance, i.e., micro-insurance.

In addition, the draft also stipulates requirements relating to business conduct such as technological capacity, allowable classes of business, a requirement to start pilot operations before full-scale launch, cyber-security, product filing requirements, fair treatment of customers, among others.

The initiative, based on global developments concerning insurers operating on a digital-only basis, will be further complemented by recent developments in the payment systems landscape.

Moreover, the new framework does not prohibit existing entities to underwrite micro-insurance or distribute insurance through digital modes.


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The objective of the proposed amendments is to encourage innovation, improve competition, widen product range, and enhance financial inclusion while aiding in the reduction of entry barriers through lenient regulatory requirements in terms of minimum paid-up capital and solvency regime.

The draft amendments, along with a position paper illustrating the proposed framework, can be accessed at SECP’s website.