ISLAMABAD: The Securities and Exchange Commission of Pakistan (SECP) has increased the minimum premium limit for group life insurance required for certification by the appointed actuary of a life insurer.
The limit has been increased from Rs1 million to Rs2 million. In this regard, the SECP has issued a circular, which will take effect on July 1.
Actuarial certification is required to ensure the soundness and workability of group life insurance and other terms and conditions.
“The decision to increase the minimum premium limit for group insurance was based on a survey of the group life insurance market conducted by the SECP to assess effectiveness of the regulatory measures introduced in 2005,” said the SECP in a press release issued on Tuesday.
The survey showed that the number of group life policies with premium exceeding Rs1 million had increased considerably, causing practical difficulties for life insurers and appointed actuaries. The survey also revealed that overall claim ratios had been reasonably stable over the last six years.
The SECP said it decided to increase the limit considering the positive trend in group insurance.
A previous SECP circular on group insurance premium issued in August 2005, required that the appointed actuary of a life insurer certify that premium rates and other terms and conditions of each group insurance policy are sound and workable.
Published in The Express Tribune, June 19th, 2013.
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