The Apex Regulator cautioned the public regarding the status of these companies and warned them not to deal with them, on the flip side SECP told these companies that they were allowed to keep the existing contracts except entering into new deals.
Citing the grounds behind its action, Apex Regular stated all insurance companies are required to operate in compliance with the requirements given in the Insurance Ordinance 2000 and Companies Ordinance 1984.
The SECP told insurance companies to improve their functioning in the wake of the waning state of the insurance sector in the country.
The SECP has said that insurance plays a vital role in the development and growth of national economy. However, the insurance industry in the country continues to show sluggish growth and the current insurance penetration in Pakistan is only 0.7 per cent of the gross domestic product, which is also one of the lowest in the world.
The sector is growing by only six per cent annually and most of the companies were not providing cover against terror attacks despite the fact that it's a key threat to individuals and the business concerns.
During the last year, underwriting of 12 companies was ceased due to capital and solvency deficits, while the winding up proceeding against 12 companies is in process.
However, the insurance sector was still slow and both the industry and the SECP have yet to release the latest insurance sector figures for the year 2009.
No comments:
Post a Comment