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PAKISTAN: As
part of its ongoing insurance reform, the Securities and Exchange
Commission of Pakistan (SECP) has issued a regulatory directive requiring
Family Takaful operators and life insurance companies to participate in
the Centralized Information Sharing Solution for Life Insurance Industry
(CISSII) before the 1st May 2014. According to a statement
issued by the SECP, the CISSII aims to promote a formal information
sharing mechanism by making membership mandatory for Family Takaful
operators and life insurance companies.
The CISSII is an information technology based formal mechanism through
which insurers can share specified critical information on real time
basis. It comprises of four components: a centralized agents’ register
including the s-register; centralized register for postponed and declined
life risks; centralized claim register and centralized group life claim
experience register. The centralized information sharing platform seeks
to enhance the policyholders’ protection and concrete development of the
life insurance industry through the implementation of a formal
information sharing mechanism amongst insurers to reduce systematic risk
in life insurance industry.
Based on the Insurance Industry Reforms Committee’s IIRC Report 2014
published by the SECP late last month, operational challenges facing the
insurance industry include: the lack of coordination between insurance
companies in sharing of critical information such as acceptance of claim,
postponed or declined life risks and malpractices by agents, which are
all due to absence of a formal information sharing mechanism. The IIRC
(established in 2012) also highlighted that immediate development can
begin by adopting a modular approach in areas such as underwriting
information, the claim register, the agency and s-reference register.
By virtue of an MoU signed by the all Family Takaful operators and life
insurers and Central Depository Company (CDC) earlier in March 2013, all
parties have consented to the development and subscription of the CISSII.
Under the MoU, in order to create greater efficiency and transparency in
the life insurance industry, the centralized information sharing platform
was to be developed and maintained by the CDC.
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