SECP to establish Insurance Repository in Pakistan

ISLAMABAD: The Securities and Exchange Commission of Pakistan (SECP) is working on establishing an Insurance Repository in Pakistan, which will improve the image of the insurance industry and enhance the confidence of policyholders.
SECP Chairman Zafar Hijazi said this, while speaking at a roundtable on establishment of insurance repository in Pakistan, organised by the commission in Karachi.
He expressed the hope that it would ensure speedy settlement of claims and reduction in disputes between insurers and insurance policyholders.
Senior officials from the SECP, life insurance industry and the Central Depository of Pakistan were present.
Explaining the objectives of the repository, Fida Hussain Samoo, Commissioner (Insurance), SECP, said an insurance repository basically facilitates dematerialisation of life insurance policies, which are long-term financial protection and investment contracts.
The repository will be developed and managed by an entity independent of insurance companies.
It will maintain data relating to life insurance policies in electronic format, including the history of transactions throughout the term of the policy.
The repository will make the information easily accessible to all related entities with speed and accuracy, he added.
The first phase of the insurance repository had already been implemented in the form of the Centralized Information Solution for the Life Insurance Industry (CISSII) being operated by the Central Depository Company of Pakistan Limited.
He said the repository will also help reduce the number of claim disputes relating to improper implementation or record keeping of insurance policy endorsements and other terms and conditions of insurance policy. Through the single integrated e-Insurance Account for each customer, each insurance company shall have access to complete information about prospective policyholders.
Thus the insurance underwriting function will be facilitated to determine the appropriateness of an insurance policy, the level of insurance coverage and affordability of the insurance policy for the customer which will ultimately result in need based selling and substantial reduction in misselling.
Through dematerialization of life insurance policies, there will be no need for physical documentation at the time of claim.
Highlighting the background of this reform, the Insurance Commissioner said that the SECP had constituted the Insurance Industry Reforms Committee (IIRC) in 2012 having representation from the insurance industry and the Securities and Exchange Commission of Pakistan.
The recommendations of the committee outlining future roadmap were made public in February 2014 in the form of IIRC Report 2014.
The IIRC recommendations include establishment of an insurance repository in Pakistan.