The draft Rules lay down a comprehensive framework for the valuation of insurance contract assets and liabilities. Developed in line with the International Association of Insurance Supervisors’ (IAIS) Core Principles and aligned with the latest global actuarial practices, the Rules have been prepared in consultation with the Pakistan Society of Actuaries (PSoA). They also incorporate risk-based capital requirements and modern supervisory regimes, with the goal of standardizing actuarial valuation practices and bringing them closer to international benchmarks. This initiative is part of the SECP’s broader objectives of digitization, transparency, and innovation.
Emphasizing the Commission’s strategic focus on the insurance industry, the SECP Chairperson stated, “Building a vibrant and sustainable insurance sector is central to our five-year strategic plan. Our approach is anchored in global best practices—fostering competition, opening markets, eliminating barriers such as legal monopolies, encouraging privatization, and ensuring that our regulatory framework adheres to the highest international standards.”
The new Rules introduce and strengthen modern, market-consistent reserving methods. Key features include: gross premium valuation for long-term insurance and takaful businesses, revised methodologies for premium and claims reserving in short-term insurance and takaful, the use of principle-based and consistent actuarial assumptions, improved practices for data quality, and greater standardization in regulatory submissions.
By adopting these updated valuation practices, the SECP aims to ensure the long-term financial health and sustainability of the insurance industry. The reforms are expected to better protect policyholders’ interests, enhance shareholder confidence and oversight, and improve the quality and consistency of statutory reporting.
The draft Rules have been published on the SECP website for public review and feedback. Stakeholders are invited to share their comments within 30 days of publication. In addition, the SECP will hold consultation sessions to gather industry-wide input before finalizing the framework.
