Islamabad: Federal Minister for Commerce Jam Kamal Khan has underscored the necessity for modernizing Pakistan’s insurance sector to meet evolving economic conditions. He emphasized that expanding insurance coverage and updating the regulatory framework are pivotal for the country’s growth.

Speaking during a briefing organized by the Ministry of Commerce’s Insurance Wing and the Securities and Exchange Commission of Pakistan (SECP), Khan detailed the proposed amendments to the Insurance Ordinance, 2000. These reforms, developed after significant stakeholder consultations, are slated for submission to the Federal Cabinet for approval.

Khan pointed out the low insurance penetration in Pakistan compared to neighboring regions, advocating for increased awareness, innovation, and regulatory updates to broaden the sector’s reach. He described insurance as a vital safety net for individuals and businesses, essential for fostering inclusive economic growth.

The proposed amendments to the Insurance Ordinance introduce significant reforms in four key areas. They allow greater competition in the market by permitting the entry of foreign insurers, recognizing microinsurers and digital-only insurers, and enabling private sector involvement in public risks. The reforms also aim to promote ease of doing business by encouraging technological use and developing new products like index-based insurance and disaster risk coverage.

Further, the amendments propose simplifying the primary law by moving operational details to regulations, creating a more flexible and principle-based framework. They also enhance supervisory oversight through a risk-based capital framework, solvency requirements, and improved governance, alongside increased SECP enforcement powers.

These changes aim to align the insurance law with other financial legislations, such as the Companies Act 2017 and the Federal Ombudsmen Institutional Reforms Act 2013, while ensuring compliance with global best practices.

Khan asserted that a robust insurance market would not only protect citizens and businesses but also mobilize long-term savings and investments, vital for sustainable economic development. He reiterated the government’s dedication to fostering an environment where the insurance industry can innovate, expand, and significantly contribute to Pakistan’s economy.