The Securities and Exchange Commission of Pakistan (SECP) has taken a major step toward transforming Pakistan’s insurance landscape by notifying the draft Actuarial Valuation Rules, 2025, for public consultation. This initiative is a cornerstone of SECP’s five-year strategic plan, “Journey to an Insured Pakistan,” which seeks to expand coverage, enhance market efficiency, and align regulatory practices with international benchmarks.
The draft rules apply to both life and non-life insurance as well as takaful businesses. Their primary objective is to bring actuarial valuation practices in line with global standards, ensuring consistency, transparency, and improved risk management across the sector. By introducing these reforms, SECP aims to not only safeguard policyholders but also strengthen the financial viability and competitiveness of insurance providers in Pakistan.
Among the most significant features of the new framework is the adoption of gross premium valuation for long-term business. This approach ensures a more accurate representation of liabilities and financial obligations, offering greater reliability in solvency assessments. For short-term business, the rules propose updated reserving methodologies that better capture evolving risk exposures and market dynamics.
The draft also introduces principle-based actuarial assumptions, shifting away from rigid formulas to more flexible, judgment-driven approaches. This change empowers actuaries to tailor their assumptions based on specific company data while maintaining consistency with regulatory expectations. In addition, a stronger emphasis is placed on improving data quality and standardization, ensuring that valuation outcomes are not only precise but also comparable across the industry.
SECP Chairperson Akif Saeed highlighted the broader vision behind these reforms, stating that developing a vibrant and sustainable insurance sector is central to Pakistan’s economic resilience. “We are guided by a commitment to core principles that ensure a level playing field: championing competition and market openness, removing barriers such as legal monopolies, and ensuring our regulatory framework meets the highest international standards,” he said.
The introduction of the draft Actuarial Valuation Rules is expected to support the transition toward risk-based capital frameworks, a major international trend in insurance regulation. By embedding these practices, Pakistan’s insurance sector will be better equipped to manage solvency risks, enhance policyholder protection, and improve statutory reporting standards.
Industry observers note that the timing of these reforms is crucial. As Pakistan works to increase insurance penetration, particularly in underserved segments such as microinsurance and takaful, a robust regulatory framework will be vital to building trust and driving adoption. The alignment with international standards also positions Pakistan to attract foreign investment and foster cross-border collaborations in insurance and reinsurance markets.
The SECP has invited stakeholders, including insurance companies, actuaries, and consumer advocacy groups, to review the draft rules and submit feedback within 30 days. This consultative approach underscores the Commission’s intent to create a balanced and inclusive regulatory environment that reflects the perspectives of all market participants.
With the draft Actuarial Valuation Rules 2025, SECP is signaling its commitment to creating a modern, transparent, and resilient insurance sector. The move is expected to pave the way for more sustainable growth, better governance, and stronger protection for millions of policyholders across the country.
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