The Securities and Exchange Commission of Pakistan (SECP) has introduced registration regime for digital-only insurers and dedicated microinsurers. This will promote digitalization and improve customer convenience through instant provision of services. In this regard, amendments to the Insurance Rules, 2017 have been notified vide SRO 1513(I)/2022.
The new framework is aimed at encouraging innovation, expanding product range, and promoting financial inclusion. The registration requirements have been designed to reduce barriers to entry, in terms of minimum paid up capital and solvency requirements. The minimum capital requirements have been set at Rs100 million for non-life digital-only business and Rs250 million for life digital-only business, whereas for non-life and life microinsurers, the capital requirements have been set at Rs80 million and Rs150 million, respectively.
The framework requires the digital-only insurer to develop digital claim lodgment and payment process since inception of operations, whilst demonstrating through implementation plan towards complete transition to digitalized claims processing comprising of claim intimation, claims assessment and payment.
It is notable here that the new framework does not prohibit existing insurance companies to underwrite microinsurance products or to distribute insurance through digital modes, under their existing setup. S.R.O 1513(I)/2022 covering the amendments to the Insurance Rules, 2017 is placed on the official website of the SECP and can be accessed at https://www.secp.gov.pk/document/s-r-o-1513i-2022-amendments-to-the-insurance-rules-2017-digital-only-insurer-and-micro-insurer/?wpdmdl=45374&refresh=62fe091dae94c1660815645.
