Product illustrations: SECP issues directives to insurance sector

These products are long-term in nature, typically ranging over 10 to 20 years


APP March 30, 2016

ISLAMABAD: The Securities and Exchange Commission of Pakistan (SECP) issued a directive to life insurance and family takaful sector on product illustrations through a Statutory Regulatory Order (SRO). Life insurance and family takaful products are long-term financial protection and savings vehicle for individual policyholders, a statement issued by the SECP said. These products are long-term in nature, typically ranging over 10 to 20 years. Life insurers use product illustration to describe the life insurance policy benefits for each future policy year. Hence, product illustration is an integral part of the overall sales process for life insurance and family takaful policies. The new requirements include placing enforceability on the insurers, making use of Urdu compulsory along with English, using inflation adjusted rate of returns in projection of savings and placing investment performance document into regulatory ambit.

 

Published in The Express Tribune, March 31st,  2016.

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