SECP Raises Minimum Paid-Up Capital Requirement for Insurance Companies
The Securities and Exchange Commission of Pakistan (SECP) has raised the minimum required paid-up capital for insurance companies through a new notification.
Draft Amendments to Insurance Rules
The SECP issued SRO 1588(I)/2024 to introduce draft amendments to the Insurance Rules, 2017. The notification outlines the revised minimum capital requirements for both life and non-life insurers registered under the Insurance Ordinance.
Increased Capital Requirements for 2025
Under the new rules, the minimum paid-up capital for a life insurer will be raised to Rs 1,000 million by the year 2025, while the requirement for a non-life insurer will be increased to Rs 800 million. Currently, the minimum paid-up capital requirement is set at Rs 700 million for life insurers and Rs 500 million for non-life insurers, which remains in effect until December 31, 2025.
Capital Requirements for New Insurers
For insurers seeking to register after the introduction of these amendments, the SECP has set even higher capital thresholds. A new life insurer will need a minimum paid-up capital of Rs 3,000 million, and a non-life insurer will require Rs 2,000 million to register.
Micro-Insurers and Digital-Only Insurers
The SECP has also specified new capital requirements for micro-insurers and digital-only insurers. The minimum paid-up capital for a life micro-insurer is set at Rs 150 million, and for a non-life micro-insurer, it is Rs 80 million. Meanwhile, the minimum capital for a life digital-only insurer will be Rs 250 million, and for a non-life digital-only insurer, it will be Rs 100 million.
Special Conditions for Life Digital-Only Insurers
Additionally, life digital-only insurers must comply with specific capital requirements based on their product offerings. According to the SECP, the capital requirement depends on whether these insurers underwrite life insurance savings products prior to the insertion of this new rule, as outlined in sub-rule (1) and (2) of rule 11.
