Pakistan: Capitalisation of State Life meets resistance
Source: Asia Insurance Review | May 2017
The government’s move to convert the State Life Insurance Corporation (SLIC) into a public limited company has hit snags for want of parliamentary approval.
SLIC, the leading player in the Pakistani life insurance market, is currently a department of the Ministry of Commerce. The government intends to corporatise SLIC and divest 25% of the new company’s shares through the stock exchange while retaining management control, reported the Dawn newspaper.
An ordinance on SLIC’s re-organisation was promulgated in April 2016, and cleared by the National Assembly in May 2016. But, the Senate sent it back to the lower house with certain amendments. Several meetings have been held over the amended Bill during the last 11 months but the government and opposition parties have failed to narrow their differences.
Pakistan has applied for a US$500-million loan from the World Bank for development policy credit and conversion of SLIC into a company is a prior condition for extending the loan to promote institutional reforms.
The SLIC is a profitable organisation but is facing various risks such as there being no appointed chairman while other top slots also remain vacant.
Analysts believe a corporation with minority private investor shares would not only improve SLIC’s performance but also promote transparency and accountability. A