A registration regime for digital-only insurers and dedicated micro-insurers has been launched by the Securities and Exchange Commission of Pakistan (SECP) aiming to promote digitalization and improve customer convenience through the immediate provision of services.
For this purpose, amendments to the Insurance Rules, 2017 have been informed vide SRO 1513(I)/2022.
To objective of the new framework is to encourage innovation, expand the product range, and promote financial inclusion. The requirements of the registration have been made to reduce barriers to entry, regarding minimum paid-up capital and solvency requirements.
In addition, the minimum capital requirements are set at Rs.100 million for non-life digital-only businesses and Rs.250 million for life digital-only businesses, while for non-life and life micro-insurers, the capital requirements have been fixed at Rs 80 million and Rs.150 million, respectively.
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The framework needs the digital-only insurer to establish a digital claim lodgment and payment process from the start of operations, simultaneously demonstrating through the implementation plan towards the entire transition to digitalized claims processing including claim intimation, claims assessment, and payment.
It is to be mentioned that the new framework does not ban current insurance companies to underwrite micro-insurance products or distribute insurance through digital modes using their existing setup.
The official website of SECP has all the details of S.R.O 1513(I) / 2022 covering the amendments to the Insurance Rules, 2017.
Earlier this month, the SECP said that digital AMCs had the potential to assist investors and increase the investor base, by decreasing paperwork, providing services in all areas, and leveraging customer data.
Moreover, the companies would give all AMC services, comprising launching of permitted collective investment schemes (CIS), online account opening to issuance and improvement of units, and inter CIS conversions through digital means, in this way the investor does not have to visit any distribution point physically, SECP added.
The proposed framework will help to cater to issues like challenges faced by brick-and-mortar AMCs, main ambitions underlying the development of digital AMCs, the potential of digital AMCs in Pakistan, and critical regulatory challenges.