Asian News - Pakistan: Rules drafted for reinsurance brokers
Source: Asia Insurance Review | Dec 2015
The Securities and Exchange Commission of Pakistan (SECP) has proposed a minimum paid-up share capital of PKR50 million (US$474,400) for a reinsurance broker to operate in the country. The requirement is set out in draft rules for reinsurance brokers released in November.
The rules will bring currently unregulated reinsurance broking into the existing insurance regulatory framework of the SECP with the aim of improving conduct and practices, said the regulator.
Apart from minimum capital requirements, the proposed rules cover matters like duties and responsibilities of reinsurance brokers, minimum statutory deposits, professional indemnity insurance, and fit and proper criteria for directors and key officers.
Code of Corporate Governance
SECP has also issued a Code of Corporate Governance for insurance companies which, among various requirements, requires insurers to ensure effective representation of independent non-executive directors on their board of directors. The Code stipulates that each insurance company should have at least one and preferably one third of the total number of directors as independent directors.
Insurers shall ensure that a statement of ethics and business practices is prepared and circulated among directors and employees to establish a standard of conduct, which shall be signed by each director and employee.
The Board of Directors of an insurer must also establish a system of sound internal control, which is effectively implemented at all levels within the company.