The Securities and Exchange Commission of Pakistan (SECP) has directed all insurance companies to establish an actuarial function, which shall be commensurate with the nature, size, and complexity of its business.
The SECP has issued an S.R.O.42(I)/2025 to introduce draft amendments to the Code of Corporate Governance for Insurers, 2016.
Every insurer shall establish an actuarial function, which shall be commensurate with the nature, size and complexity of its business. The actuarial function shall, at a minimum:
- evaluate data quality in line with actuarial standards to ensure accuracy, appropriateness, completeness and comprehensiveness of data for the purpose of the investigations carried out.
- Determine and evaluate the adequacy of insurance contract assets and liabilities (including mathematical reserves, premiums and claims reserves, etc.) as per the applicable regulatory requirements and financial reporting standard.
- Assess minimum solvency requirement in accordance with the requirements of the Insurance Ordinance, 2000.
- Carry out experience studies on the demographic, macroeconomic and expense analysis for different purposes and the appropriate use of assumptions for investigations
- Evaluate the adequacy of overall pricing policy and its alignment with the underwriting and claims management policy of the insurer.
- Evaluate the adequacy of reinsurance arrangements against business size, nature, risk appetite and solvency position of the insurer.
- Provide advice on the insurer’s investment policies and strategies through asset[1]liability management studies to provide strategic and tactical asset allocation.
- in case of life insurer, perform coordination with the appointed actuary in all the matters assigned as per the requirements of the Insurance Ordinance, 2000 and the Rules and Regulations made thereunder.
The actuarial function shall report directly to the Chief Executive Officer and shall have access to the Board to submit its findings on a regular frequency. However, the insurer shall ensure that the independence of the actuarial function is maintained and the actuarial function does not perform any such function(s) that may give rise to conflict(s) of interest.
There shall be Head of the actuarial function appointed by an insurer. The Head of the actuarial function must fulfill the following requirements, SECP added.
