KARACHI: The Securities and Exchange Commission of Pakistan (SECP) directed the Pak-Qatar Family Takaful and its CEO to pay Rs800,000 and Rs200,000, respectively, in fines to the regulator within 30 days for running advertisements containing “deceptive and/or misleading information” through one of its agents.
BankIslami Pakistan published an advertisement in Dawn on October 27 last year that promoted three Takaful products of Pak-Qatar Family Takaful.
However, the name of Pak-Qatar Family Takaful was not printed anywhere in the advertisement. According to the SECP order passed on February 26, the advertisement did not suggest any involvement of Pak-Qatar Family Takaful with the products; and therefore, it was “deceptive/misleading for the public at large.”
BankIslami acted as a corporate agent of Pak-Qatar Family Takaful and, according to Bancassurance Guidelines, 2010, any sales-related material must be approved by both the insurer and the bank. Insurance Ordinance, 2000, holds the insurer liable for every act and/or omission of the agent of that particular insurer.
During the hearing proceedings held on January 28, it was mentioned that the wording, “Save Rs15,000 per month and get a coverage of up to Rs5,000,000” gave the impression that if an accountholder of BankIslami saved Rs15,000 per month in his account then he will automatically be entitled to a coverage of Rs5 million, which is “deceptive and misleading.”
In its written response to the SECP on February 4, Pak-Qatar Family Takaful maintained that the advertisement was actually an extract from a publicity brochure. BankIslami published the same under the impression that it was already approved by the SECP, the Islamic insurer said in its response. The publication of the said advertisement was stopped, it added, while BankIslami published a new advertisement as per the SECP guidelines to remove any ambiguity arising out of the previous one.
The total amount of contribution underwritten by Pak-Qatar Family Takaful through BankIslami between October 28, 2012, and January 27 was Rs10.3 million, as it sold 149 Takaful policies.
A spokesperson for Pak-Qatar Family Takaful declined to speak to The Express Tribune for this story.
As opposed to seven conventional insurance companies, only two family Takaful companies currently operate in Pakistan.
Total gross premiums of Takaful companies in 2011 were Rs3.3 billion, which was only 2.8% of the gross premiums of conventional insurance companies in the same year.
Published in The Express Tribune, March 2nd, 2013.
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