The Securities and Exchange Commission of Pakistan (SECP) has released its draft Actuarial Valuation Rules, 2025 for public comment, marking a significant step in modernizing the country’s insurance and takaful regulatory framework.
Raising the Bar for Insurance Oversight
The draft rules outline how insurers and takaful operators should calculate the value of their contract assets and liabilities. They are designed in line with the standards of the International Association of Insurance Supervisors (IAIS) and reflect best practices used in global actuarial regimes.
SECP worked closely with the Pakistan Society of Actuaries (PSoA) in preparing the draft, which also incorporates risk-based capital measures and supervisory requirements. According to the Commission, the move is part of its broader five-year strategic roadmap, Journey to an Insured Pakistan, which aims to expand coverage, improve transparency, and strengthen digital adoption across the sector.
Focus on Competition and Sustainability
SECP Chairperson highlighted that reforming actuarial practices is central to building a stronger insurance market in Pakistan. “Our priority is a level playing field—removing barriers, encouraging competition, and ensuring regulations meet international benchmarks,” the Chairperson noted.
Key Shifts in the Draft Rules
The proposed framework introduces several updates that could reshape industry practices:
- Gross premium valuation for life and family takaful products.
- Revised reserving methods for short-term general insurance and takaful.
- Principle-based actuarial assumptions to replace rigid, outdated approaches.
- Stronger data quality requirements for more reliable reporting.
- Standardized submissions to improve regulatory review and oversight.
Analysts suggest that these reforms could significantly enhance financial stability, protect policyholders’ interests, and provide insurers with clearer insights for long-term business management.
Next Steps: Industry Consultation
The draft has been published on SECP’s website, with a 30-day window for public and industry feedback. The regulator has also announced upcoming consultation sessions to gather views from stakeholders before finalizing the framework.
