ISLAMABAD: The Securities and Exchange Commission of Pakistan (SECP) has released a draft of the Market Conduct Rules for Insurers, 2026, for public consultation. The draft rules propose specific timelines for processing insurance claims and policy issuance, enhanced disclosure of claims performance, and aim to bolster consumer protection measures.
According to Securities and Exchange Commission of Pakistan, the draft rules are set to apply to personal line insurance contracts targeting individual consumers. These regulations are designed to establish baseline standards for insurers in their interactions with individual customers, covering the entire customer lifecycle. The rules stipulate that life insurers must adjudicate claims within 20 working days after receiving all necessary documentation. In the case of non-life insurance, motor claims are to be resolved within five working days following the final survey report, while other claims should be concluded within seven working days.
Once a claim is approved, insurers must make payment within seven working days of notifying the decision. The draft also mandates that insurers request only documents directly pertinent to claim settlement. For health insurance, hospitalization claims must be processed within 20 working days after the last required document is received, with insurers providing hospital discharge authorization within three hours to prevent discharge delays.
The proposed regulations emphasize transparency in claims processing, requiring insurers to publish their settlement, repudiation, outstanding, and pending ratios on their websites and in annual reports. This data must cover at least the previous three years. Additionally, insurers are required to communicate decisions on new insurance proposals within seven working days, with life insurance documents issued within 20 working days, and policies sold through digital or telemarketing channels issued within three working days.
Motor insurance customers are set to receive enhanced protections under the new rules, which obligate insurers to disclose the estimated market value of vehicles and clarify the consequences of over- and under-insurance. Approved motor repairs are generally expected to be completed within 15 working days, barring exceptional circumstances. Non-compliance with these rules could result in fines up to Rs. 1 million, with an additional Rs. 10,000 per day for ongoing defaults.
SECP has called for public and stakeholder feedback on the draft rules within 30 days of notification, with all input to be considered before proceeding through the necessary approval channels.