The Security and Exchange Commission of Pakistan (SECP) has said that the lockdown situation and economic disruptions during the COVID-19 affected the insurance sector indiscriminately.
According to the annual report issued by SECP, the SECP taking cognizance of its responsibility, has facilitated the insurance industry to prepare for corona virus impact by providing relaxation and relief in regulatory reporting and statutory filing requirements under applicable regulatory framework.
The SECP also advised the insurance industry to prepare comprehensive plan envisaging how it will manage the effects of the coronavirus outbreak and assess disruptions and other risks to its services and operations, report said.
Specific measures were also taken to provide necessary relief to the policyholders.
Taking into account the anticipated low claim ratio in motor insurance business due to lockdown, the SECP through Circular has encouraged insurance companies to take steps to facilitate and pass on the benefit of low claim ratio to motor insurance policyholders by granting one month free of cost extension in insurance coverage to all motor insurance policyholders.
Impairment of Available for Sale Investment: Keeping in view the effects of the COVID – 19 on the investment portfolios of insurance companies, the SECP through S.R.O 414(I)/2020 dated May 11, 2020 allowed relief to companies/entities from the requirements contained in IAS 39 in relation to their Available for Sale (AFS) Equity Investments by allowing them to show impairment loss (if any, due to significant or prolonged decline in fair value of AFS equity investment portfolio), as at March
31, 2020, in the statement of changes in equity, report said.
Considering the coronavirus situation, the SECP, through a circular, has asked insurance companies to waive non-mandatory requirements for claims processing. SECP has also advised insurers to use alternative methods for verifying the authenticity of claims.
To facilitate policyholders, the SECP has asked companies to consider extension in grace period of payment of renewal premiums under insurance policies.
Moreover, insurance companies have been encouraged to utilize digital or online payment modes for receipt of insurance premium and disbursement of claim payments, utilize electronic mediums such as SMS, emails, mobile applications, online portals etc. for claims handling, delivery of policy documents and issuance of pre-authorizations for treatment in hospitals.
Also, insurers have been asked to consider providing coverage against claims incurred in non-panel hospitals along with recommendation for increasing list of panel hospitals.
The SECP provided relaxation and relief to the insurance industry by extending the timeline for renewal of insurance brokers’ license, insurance surveyors and insurance surveyors’ and authorized surveying officers’ license.
The Companies which had difficulty in holding AGM within due time were allowed a general extension of 30 days. Similar extension was allowed in respect of filing of returns.