Islamabad, The Securities and Exchange Commission of Pakistan (SECP) recently conducted a pivotal session for stakeholders within the insurance sector, aiming to shed light on the intricacies of the Risk Based Capital (RBC) Regime. This meeting, a blend of in-person and virtual webinar formats, provided a platform for CEOs, finance, and risk professionals from the insurance industry, alongside actuarial representatives and accounting experts from the Pakistan Society of Actuaries and the Institute of Chartered Accountants of Pakistan, to discuss the forthcoming regulatory framework.
According to Securities and Exchange Commission of Pakistan, Commissioner Insurance, Mr. Aamir Khan, emphasized the critical need for Pakistan’s solvency regime to align with international standards, noting the country’s outlier status in the global insurance landscape due to its current capital adequacy requirements. Khan detailed the SECP’s strategic plan, highlighting the integration of insurance liabilities valuation, financial reporting under IFRS 17, and the RBC regime as principal areas of focus within the five-year strategic blueprint.
Mr. Falak S.H. Soomro, Advisor Insurance at SECP, charted the RBC implementation journey from the concept paper’s introduction in December 2022 to the dissemination of RBC templates for industry analysis. The templates are designed to help companies assess their risk exposures, conduct risk-based capital requirements analysis (Quantitative Impact Study), and finalize the model-validation process. Soomro’s walk-through of the templates addressed their technical and operational aspects, underscoring the importance of ongoing industry consultations to refine the framework, including parameter calibrations and assessing the comparative impact on existing solvency models.
The session also opened the floor to questions and observations from industry professionals, fostering a dialogue on the RBC regime’s future implementation in Pakistan. Commissioner Khan encouraged a cooperative approach among participants for the regime’s successful adoption, requesting the submission of questions related to the RBC template to facilitate the creation and distribution of a comprehensive FAQ document.
This initiative marks a significant step towards modernizing Pakistan’s insurance sector regulatory framework, aiming to enhance the industry’s stability and competitiveness on a global scale.