The Securities and Exchange Commission of Pakistan (SECP), with the approval of its policy board, has increased the minimum paid up capital requirement for insurance companies.
The policy board has approved an amendment to the Securities and Exchange Commission (Insurance) Rules, 2002, whereby the minimum paid up capital for both non-life and life insurance companies has been increased by an amount of Rs 200 million.
A new rule 9 has been inserted in the said rules under which the baseline paid-up capital requirement for non-life and life insurance companies have been prescribed as Rs 500 million and Rs 700 million respectively. Further, the amount of minimum paid up capital will be net off any discount offered on issue of shares. These new capital requirements would be applied in a phased manner and the existing insurance companies would be allowed a period of two years till December 31, 2017, to meet the said requirement.
At the time of enactment of the Insurance Ordinance, 2000, the minimum paid-up capital requirements for non-life and life insurance companies were Rs 80 million and Rs 150 million respectively. In the year 2007, the paid-up capital requirements for non-life and life insurance companies were increased to Rs 300 million and 500 million respectively in a phased manner.
