In Pakistan, getting insurance claim settled can mean weeks or even months of waiting. Now, SECP wants to change that. Its proposed Market Conduct Rules 2026 would put insurers on strict deadlines for processing claims and issuing policies, while companies could face hefty fines for delays and violations.
The companies could face new rules on claim settlements, policy issuance and customer disclosures as the Securities and Exchange Commission of Pakistan (SECP) has unveiled the draft Market Conduct Rules 2026 for public consultation.
The proposed framework aimed at strengthening consumer protection and ensuring that insurers do not unnecessarily delay claims, sets out specific deadlines from the issuance of an insurance policy to the final payment of a claim.
Under the draft rules, insurers would be required to decide life insurance claims within 20 days of receiving all necessary documents. Motor insurance claims would have to be decided within five days of receiving the survey report, while non-life insurance claims would require a decision within seven days of completion of the survey. Once a claim is approved, insurers would have seven days to make the payment.
The proposed rules also seek to curb what could be seen as excessive documentation demands by insurers. Companies would only be allowed to request documents that are relevant to the claim, potentially reducing delays caused by repeated or unnecessary paperwork.
Insurance companies would be required to publish data on their websites showing the number of settled, rejected and pending claims. They would also have to disclose the proportion of claims that have remained pending for more than one year, putting greater public scrutiny on insurers with prolonged claim backlogs.
The proposed framework does not stop at claims. Insurance companies would have to complete processing of an application for a new insurance policy within seven days. Documents for life insurance policies would have to be issued within a maximum of 20 days. For policies sold through digital channels, the deadline would be even tighter: insurers would have to issue the policy within three days.
The draft rules also introduce specific consumer protections for motor insurance. Policyholders would have to be informed about the vehicle’s current market value, as well as the consequences of over-insurance and under-insurance.
For approved motor insurance claim, repairs would generally have to be completed within 15 days, potentially putting pressure on insurers and their associated repair networks to speed up the claims process.
For non-life insurance, the proposed framework would also give policyholders the right to cancel their policies without having to provide a reason.
SECP is also proposing financial penalties for insurers that fail to comply with the new requirements. A violation could attract a fine of up to Rs1 million, while a continuing violation could result in an additional penalty of up to Rs10,000 per day.
The proposed penalties, coupled with mandatory disclosure of claim-performance data, could significantly increase pressure on insurance companies to improve their customer-service and claims-handling practices.
The draft Market Conduct Rules 2026 are not yet final. The SECP has invited the public and all stakeholders to submit their comments and objections within 30 days. After reviewing the feedback, the proposed rules will be placed before the SECP Policy Board for approval.
