Government decides to boost competition and investment in insurance sector
ISLAMABAD: The government has decided to enhance competition and attract greater investment in the insurance sector, as the Insurance Bill 2026 has been presented in the National Assembly, proposing major reforms to modernize the industry.
According to details, the bill suggests fully opening the insurance sector to foreign investment. The proposed legislation will replace the 25-year-old Insurance Ordinance and aims to improve efficiency, including faster claim settlements and swift resolution of disputes.
The bill proposes allowing foreign insurance and reinsurance companies to operate in Pakistan through branch structures. It also recommends greater private sector participation in the insurance of state-owned assets and ensures equal opportunities for private reinsurance firms in mandatory reinsurance arrangements.
It further proposes legal recognition of technology-based distribution models and insurtech products to promote digital transformation in the sector.
The Securities and Exchange Commission of Pakistan (SECP) has suggested replacing the repeated renewal of insurance licenses with a permanent licensing system. It also recommended strict timelines for settlement of policyholder claims.
The SECP has proposed strong measures against misleading sales practices in insurance policies, along with the introduction of a risk-based capital framework and improved solvency management system for insurance companies.
SECP Chairman Dr. Khawaja Kamaluddin said that a stable insurance sector is essential for sustainable economic growth. He added that the new insurance bill will provide better protection to citizens, businesses, industry, and agriculture, while digital platforms will help deliver low-cost and faster insurance services.
