SECP Proposes New Insurance Rules For Faster Claims And Better Consumer Protection
The Securities and Exchange Commission of Pakistan has proposed new rules aimed at strengthening consumer protection in the insurance sector, including mandatory timelines for processing and settling claims, clearer responsibilities for insurers, and greater disclosure of claims data.
The SECP has released the draft Insurance Market Conduct Rules, 2026, for public consultation. The proposed rules would apply only to individual insurance policies and would establish responsibilities for insurance companies from the issuance of a policy through the processing and payment of claims.
Under the proposed framework, life insurance claims would have to be decided within 20 days after the insurer receives all required documents. Motor insurance claims would have to be decided within five days of receiving the survey report, while other non life insurance claims would have to be decided within seven days of the survey report. Once a claim is approved, the insurer would have seven days to make the payment.
The draft also proposes specific timelines for health insurance claims involving hospitalized patients. Such claims would have to be settled within 20 days. Insurers would also be required to approve a patient’s discharge within three hours, and a patient could not be prevented from leaving the hospital because of a delay caused by the insurance company.
The proposed rules would also restrict insurers from requesting documents that are not relevant to a claim. Insurance companies would have to publish data on settled, rejected and pending claims on their websites, including the proportion of claims that have remained pending for more than one year.
The draft sets timelines for issuing new policies as well. Insurance companies would have to process applications for new insurance policies within seven days. Life insurance policy documents would have to be issued within 20 days, while policies sold through digital channels would have to be issued within three days.
For motor insurance, insurers would be required to disclose the current market value of the insured vehicle and explain the implications of overinsurance and underinsurance to policyholders. In approved motor insurance claims, repairs would generally have to be completed within 15 days.
The proposed framework would also give non life insurance policyholders the right to cancel a policy without providing a reason. Insurers violating the proposed rules could face a penalty of up to Rs. 1 million, while continued violations could attract an additional penalty of up to Rs. 10,000 per day.
The SECP has invited the public and stakeholders to submit comments and objections on the draft rules within 30 days. Following the consultation process, the proposed rules will be presented to the SECP Policy Board for approval.
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