The Securities and Exchange Commission of Pakistan (SECP) conducted a session on Thursday for participants in the insurance industry to provide an overview of the Risk-Based Capital (RBC) regime and a walk-through of the recently disseminated RBC templates.
The meeting was attended by Chief Executive Officers (CEOs), finance and risk professionals from the insurance industry. It was also attended online by actuarial representatives and accounting experts from the Pakistan Society of Actuaries and the Institute of Chartered Accountants of Pakistan, according to a news release.
Commissioner Insurance Aamir Khan briefed the participants on the importance of aligning the current solvency regime with international standards. He informed them that with the adoption of a more risk-based approach to capital and solvency requirements regionally and internationally, Pakistan is now perceived as an outlier by the global insurance industry.
As part of the strategic plan, he expressed his intent to leverage the alignment of insurance liabilities valuation, financial reporting under IFRS 17, and the RBC regime, which are key priority areas of a five-year strategic plan.
Advisor Insurance at SECP Falak S H Soomro provided an overview of the RBC implementation journey, including the development of the concept paper in December 2022 and the RBC template shared with the industry for data analysis.
Soomro informed participants that the RBC template is designed to assist companies in evaluating their risk exposures, conducting risk-based capital requirements analysis (commonly referred to as Quantitative Impact Study), and completing the model-validation process. A walk-through of the RBC templates about the technicalities and operationalities of the model was presented.
Published in The Express Tribune, March 22nd, 2024.
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