Draft of market conduct rules for insurers issued

ISLAMABAD: The Securities and Exchange Commission of Pakistan (SECP) has released a draft of Market Conduct Rules for Insurers, 2026 for public review. The rules target personal lines insurance contracts for individual consumers, aiming to enhance policyholder protection and set minimum standards for insurers' interactions with customers throughout their journey. Key provisions include binding timelines for claims, policy issuance, and payments, as well as more comprehensive disclosure of insurers' claims performance.

Life insurers must resolve claims within 20 working days of receiving all necessary documents and clarifications. Non-life insurers, specifically motor insurers, must decide on claims within five working days of receiving the final survey report, while other claims should be settled within seven working days. Once a claim is approved, payment must be made within seven working days of communicating the decision.

Hospitalization claims under health insurance must be settled within 20 working days of receiving the last required document. Insurers must provide hospital discharge authorization within three hours, and patients cannot be denied discharge due to delays in authorization. Transparency in claims handling is promoted through the disclosure of claim settlement, repudiation, outstanding, and pendency ratios on insurers' websites and annual reports.

New insurance policies must receive a decision on proposals within seven working days. Life insurance policy documents should be issued within 20 working days, while policies sold through digital channels or telemarketing must be issued within three working days. The draft rules also bolster protection for motor insurance customers by requiring insurers to disclose the estimated market value of a vehicle and explain the consequences of over- and under-insurance.

Approved motor repairs generally need to be finished within 15 working days, with exceptions for unforeseen circumstances.

Non-compliance may result in fines of up to Rs1 million, with additional penalties of up to Rs10,000 per day for ongoing defaults. The SECP has invited public and stakeholder comments and suggestions within 30 days of the notification, which will be considered before the rules advance through the approval process.