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Draft Ins acts submitted to ministry
FE Report
12/27/2005
An experts' committee submitted Monday three draft acts on insurance sector to the government.
The draft acts are: Independent Insurance Regulatory Authority Act -2005, the Insurance Act 2005 and 'Takaful' Act 2005 for Islami insurance companies.
The full-fledged experts' committee headed by the Chief Controller of Insurance (CCI) Firoz Ahmed placed the draft laws to the Commerce Secretary Farooq Ahmed Siddiqi at his Secretariat office.
The government formed the committee in January 2005 for the preparation the draft on the laws.
The legislation of the three new acts aims to streamline the regulatory processes of the country's insurance business.
The proposed Insurance Act 2005 will replace the existing Insurance Act 1938 and the Insurance Rules 1958, according to sources.
Several new provisions have been incorporated into the draft Insurance Act 2005, according to the committee sources.
The new provisions include establishment of a policyholders' protection fund, enhancement of companies' capital-base, creation of brokerage houses for insurance policies and requirement for minimum solvency margin.
The proposed "Independent Regulatory Authority Act' aims to replace the existing Department of Insurance, sources said.
The new act will also bring all the insurance companies, both private and state-run ones, under a uniform regulatory framework.
Currently, the chief controller of insurance regulates the private insurance companies while the state-owned Sadharan Bima Corporation (JBC) and Jiban Bima Corporation (JBC) are guided by the Insurance Corporation Act 1973, sources said.
After examining proposals, the commerce ministry is to place them before the Ministry of Laws and Parliamentary Affairs for approval, an official said.
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