Prime Minister approves new insurance policy in principle

 

 

 

ISLAMABAD (April 14 2007): Prime Minister Shaukat Aziz on Friday approved in principle new insurance sector policy which aims at increasing penetration, removing impediments to insurance industry development and outlining a more rational role of the public sector in line with the best international practices.

The decision to this effect was taken by the Prime Minister while chairing a meeting to review the insurance industry growth here. Shaukat said insurance which is an important part of the financial sector needs to be revamped.

He said the percentage of life insurance in the country which presently is 0.28 percent is among the lowest in the region. The immediate goal should be to enhance it to one percent in a period of three years, he added.

He said: "Life insurance is an excellent way of increasing savings, risk mitigation and has direct impact on capital formation and investment levels." Shaukat Aziz said attention should also be paid to improving coverage and outreach in the areas of health, general and micro insurance.

He said changes should be made in the overall fiscal regime in the insurance sector to motivate individuals to invest in life, health and general insurance policies. The Prime Minister, in principle, also approved conversion of State Life Insurance Corporation (SLIC) into a company under the companies ordinance, 1984. He said all public sector insurance entities should be corporatised, their boards restructured and more professionals inducted to make them efficient.

Shaukat Aziz said the marketing departments of the insurance companies should be strengthened and they should get engaged in aggressive marketing. He also agreed to the proposal to open up the insurance of public property (other than strategic assets) to private companies after formulating comprehensive rules and procedures. He took serious notice of the fact that a number of spurious insurance companies are issuing bogus third party insurance policies, which are accepted by Motor Registration Offices.

 
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