SECP Increases Minimum Paid-Up Capital Requirement for Insurance Companies

The Securities and Exchange Commission of Pakistan (SECP) has significantly raised the minimum paid-up capital requirements for both existing life and non-life insurance companies. This adjustment aims to bolster the financial robustness of the insurance sector.

According to S.R.O.1588(I)/2024 issued by the SECP, the revised capital requirements are stipulated as the new minimum thresholds for insurance companies to operate within the country.

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Starting in 2025, life insurers must have a minimum paid-up capital of Rs. 1,000 million, while non-life insurers must maintain Rs. 800 million. Previously, the minimum requirements were Rs. 700 million for life insurers and Rs. 500 million for non-life insurers, applicable until December 31, 2025.

Furthermore, new insurance companies registering after this rule’s enactment must meet higher capital thresholds. Life insurance companies will need a minimum of Rs. 3,000 million, and non-life insurance companies will need Rs. 2,000 million in paid-up capital.

The SECP also outlined specific capital requirements for micro insurers and digital-only insurers. The minimum paid-up capital for a life micro insurer is set at Rs. 150 million and Rs. 80 million for a non-life micro insurer. For digital-only insurers, the minimum is Rs. 250 million for life insurers and Rs. 100 million for non-life insurers.

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The SECP emphasized that life digital-only insurers underwriting life insurance savings products before the new clause’s insertion must comply with the existing requirements of sub-rule (1) of rule 11, while new entrants must adhere to sub-rule (2) of rule 11.