THIS is apropos the article `Reinsurance: outflow of funds abroad` (Dawn Business & Finance, May 8).
The article brings to the fore an area which receives little or no attention.
Inthe absence ofadequate and progressive regulatory measures, the country has lost out on the recent wave of infrastructure projects for which insurance proceedshave beenexported to countries like China, UK or Dubai with little or no regard to the country capabilities.
The draftinsurance billeirculated lacks substancein respectofcoreissues impacting non-life insurance, as well as a sound outlook for strengthening the market for the long term. It would be worth its while for the Securities and Exchange Commission of Pakistan (SECP) to set benchmarks with comparable jurisdictions such as India, Bangladesh, Saudi Arabia, Malaysia and Thailand in respect of non-life insurance regulations.
To introduce financial transparency, Pal(istan has issued anti-money laundering legislation. As regards insurance, one measure towards greater transparency is to make reinsurance brokers` registration mandatory in order to avoid the use of front companies.
Another measure would be to include commission disclosures on contracts this is being done in regional countries where regulations require that customers be informed of both insurance and reinsurance commissions paid to intermediaries from their premium.
Given the new insurance regulations are under discussion, it is hoped that SECP will take appropriate measures to develop the domestic insurance industry across all tiers andincrease transparency,especially so in the wake of the China-Pakistan Economic Corridor and other investment initiatives.
