The Securities and Exchange Commission of Pakistan (SECP) has ruled that no person shall act or perform the functions of the Reinsurance Broker unless registered as a Reinsurance Broker with the Commission.
The SECP has issued S.R.O.281(I)/2021 here on Monday to issue Securities and Exchange Commission (Reinsurance Brokers) Regulations, 2021.
Under the new regulations, no person shall act or perform the functions of the Reinsurance Broker unless registered as a Reinsurance Broker with the Commission under these regulations except International Reinsurance Broker. On the commencement of these regulations, any person already providing services as a reinsurance broker shall obtain registration under these regulations within a period of six months from such commencement.
Provided that companies licensed under the Insurance Ordinance to perform functions of direct insurance broking may be eligible to apply for registration under this regulation subject to the fulfillment of all regulatory requirements under these regulations and any other conditions as the Commission deems appropriate.
A company limited by shares, incorporated under the Companies Act, 2017 may apply to the Commission for registration to act as a reinsurance broker, provided that it meets the pre-conditions of such registration in terms of paid-up capital requirement, statutory deposit, professional indemnity, fit and proper criteria, and such other conditions as deemed appropriate by the Commission, SECP said.
A foreign reinsurance broker may apply to the Commission for grant of registration to act as a reinsurance broker in Pakistan, provided that it meets the pre-conditions of such registration in terms of paid-up capital, professional indemnity, statutory deposit and such other conditions as deemed appropriate by the Commission, SECP added.
Any applicant seeking registration as a Reinsurance Broker under these regulations shall satisfy the following conditions: Firstly, it shall have a minimum amount of paid-up capital as Rs. 30 million or any higher amount as may be specified by the Commission. Secondly, the paid-up capital in the company shall be in the form of equity shares; Provided that the companies licensed to perform functions of direct insurance broking shall comply with the paid-up capital requirement within one year from the date of issuance of these regulations.
A reinsurance broker shall before the commencement of its business, deposit and keep deposited with the Bank a sum equivalent to 10 percent of the minimum prescribed paid-up capital as a statutory deposit, which shall not be released to it by the Bank without prior written permission of the Commission.
A reinsurance broker shall furnish to the Commission as and when called upon to do so a statement certified by the Bank related to its statutory deposit and the statutory deposit held by the company in the capacity of a direct insurance broker is admissible for the purposes of statutory deposit in the capacity of reinsurance broker.
The Commission may also specify the requirements for any or all employees of the Reinsurance Broker before it seeks the registration, to complete, at least twenty hours of training, imparted by an institution recognized by the Commission for this purpose, from time to time, SECP stated.
Source: Pro Pakistani