GOVERNMENT OF PAKISTAN
Securities and Exchange Commission of Pakistan

Islamabad, the 11th March, 2025

NOTIFICATION

S.R.O.356(I)/2025: In exercise of the powers conferred by Section 40B read with clause (u) of sub-section (4) and clause (fc) of sub-section (6) of section 20 of the Securities and Exchange Commission of Pakistan Act, 1997 (XLII of 1997) and clause (i) of section 458A of the Companies Act, 2017 (XIX of 2017), the Securities and Exchange Commission of Pakistan is pleased to issue the following regulatory requirements for the sale of life insurance savings products through technology-based distribution channels by life insurers, the same having been previously published in the official Gazette vide S.R.O. 1501(I)/2024 dated September 12, 2024.

(1) This directive shall be called the “Directive for Sale of Life Insurance Savings Products through Technology-Based Distribution Channels, 2025”.

(2) For the purpose of this directive:

(a) “Directive” means the Directive for Sale of Life Insurance Savings Products through Technology-Based Distribution Channels, 2025”

(b) “Ordinance” means the Insurance Ordinance, 2000 (XXXIX of 2000);

(c) “Regulations” means the Corporate Insurance Agents Regulations, 2020;

(d) “Rules” means the Unit Linked Product and Fund Rules, 2015;

(e) “Savings Products” has the same meaning as provided under clause (y) of sub-regulation (1) of regulation 2 of the Regulations and includes single premium products which have a savings or investment portion for the policyholder; and

(f) “Technology Based Distribution Channels” has the same meaning as provided under clause (bb) of sub-regulation (1) of regulation 2 of the Regulations.

In this Directive, the word "Takaful” may be used interchangeably with the word `Insurance', 'Family Takaful' with ‘Life Insurance’, 'contribution' with ‘premium' and ‘Life Insurer' with 'Family Takaful Operator’. Similarly, other terms used in the Takaful Rules, 2012 associated with the Takaful business may be used interchangeably with their conventional counterpart words / terms.

The words and expressions used but not defined shall have the same meaning as assigned to them in the Ordinance.

(3) This directive shall come into force with effect from April 1, 2025.

(4) Life insurers may distribute savings products through technology based distribution channels under the following two broad product categories, subject to compliance with other regulatory requirements, as are applicable on life insurance products:-

(a) Category A Products

(b) Category B Products

(5) Life insurers may distribute savings products under category A and B, which shall comply with the features and requirements as described in the table below:-

No. Particulars Minimum Requirements and Features Category A Products Category B Products (i) Eligible person to whom product can be offered Pakistani individuals having valid CNIC. (ii) Minimum and maximum entry age of the policyholder 18 - 60 years 18 - 65 years (iii) Maximum regular premium / contribution limit including top-up / adhoc premium Rs. 200,000/- per annum No limit (iv) Maximum cumulative premium / contribution limit including regular premium, single premium and top-up / adhoc premium. Rs. 3,000,000/- The cumulative maximum amount of premium / contribution (regular and adhoc) shall not exceed Rs. 200,000/- in a policy year. No limit (v) Minimum financial protection component
• Single Premium: 1.25
times of the basic premium
• Term < 1 year: 1.25 times
basic total premium
• Term > 1 year: 5 multiples
of basic annual premium
• Single Premium: 1.25
times of the basic premium
• Regular Premium: 5
multiples of basic annual premium
(vi) Minimum term of product No limit 5 years in the case of regular premium products (vii) Maximum limit for sum insured Rs. 3,000,000/- No limit (viii) Maximum term of product 15 years No limit (ix) Maximum allocation charges
• Term < 1 year: Nil
• Term > 1 year: Maximum
10% in first two policy years, nil thereafter.
• For Single Premium
Saving Products: 3%
Maximum 20% in the first two policy years, nil thereafter.
For Single Premium Saving
Products: 3%
(x) Maximum surrender charge • Term < 1 year: Nil
• Term > 1 year:
For Investment Contracts:

No. Particulars Minimum Requirements and Features Category A Products Category B Products

• 1
  st Policy Year: 10% of premium paid.
• 2
  nd Policy Year and onwards: Nil
  • Policy Years 1 to 3: 20% of
  the total premium allocated to investment account.
  • Policy Year 4 and
  onwards: Nil
  For Participating Contracts:
  • Policy Years 1 and 2: 100%
  of the premium.
  • Policy Year 3 and
  onwards: Nil
  (xi) Bid offer spread charges • Term < 2 year: Nil
  • Term > 2 years: 3% per annum
  (xii) Indexation of premium payment
  Not allowed Allowed
  (xiii)
  Investment avenues of underlying statutory fund or unit linked fund, as the case may be.
  In case of investment contracts: Government securities, bank deposits, money market mutual funds.
  As per investment policy of the underlying statutory fund or the unit linked fund, as the case may be.
  (xiv)
  Top-up / adhoc premium allocation, charges and utilization
  • Allowed, without any allocation charges and bid offer
  spread.
  • Adhoc premium shall not reduce the sum at risk under the
  policy.
  • No surrender charges.
  (xv) Exclusions Death caused by suicide within 13 months of policy inception.
  (xvi) Pre-existing conditions
  Pre-existing conditions are at least covered with a waiting period of 30 days.
  Pre-existing conditions may or may not be covered.
  (xvii) Maximum Waiting period for death claim admissibility 30 days As per terms of the policy.
  (xviii) Medical underwriting requirement No medical underwriting Medical underwriting as per medical underwriting chart.
  (xix) Built in Supplementary
  Benefits riders Allowed
  (xx) Optional Supplementary
  Benefits riders Not allowed Allowed
  (xxi) Automatic non-forfeiture
  (ANF) option
  At the proposal stage the ANF option offered shall be:
  For investment contracts, as per clause (b) of sub-rule (2) of rule 32 of the Insurance Rules, 2017.
  For participating contracts and non-participating conventional contracts, as per sub-rule (1) of rule 32 of the Insurance Rules, 2017.

No.	Particulars	Minimum Requirements and Features
		Category A Products	Category B Products
(xxii)	Requirements for insurance need analysis as per the Regulations and the Rules	Not applicable	The Insurer shall conduct the need analysis digitally, to capture the needs of the prospect and shall cover at least the following factors: • employment / business details; • financial details; • future saving needs; and • risk profiling.
(xxiii)	Requirements for fund suitability analysis under the Rules (in case of unit linked products)	Not applicable	• The Insurer shall conduct fund suitability analysis digitally covering information related to investment objective, risk appetite / tolerance level, investment horizon, and level of investment knowledge. • In case of investment in unit linked funds having medium or high risk profile, the Insurer shall take declaration digitally from the policyholder as an acknowledgment of understanding the investment risk associated with exposure to equity.
(xxiv)	Requirement for audio visual clip under the Rules and the Regulations.	• Insurer to create a link for audio visual clip to enable policy holder to view the clip during digital onboarding. • Insurer is encouraged to obtain confirmation digitally from prospect on viewing of the audio visual clip.	• Insurer to create a link for audio visual clip to enable policyholder to view the clip during digital onboarding. • Insurer to obtain confirmation digitally from prospect on viewing of the audio visual clip.
(xxv)	Requirement for illustration document	• Simplified illustration be made available by illustrating values as per the Directive for Life Insurance and Family Takaful Illustrations, 2024	Illustration be made available by providing illustrative tables and relevant notes as per the requirements of the Directive for Life Insurance and Family Takaful
		with an option to download. • Illustrative values shall be generated by inputting minimum fields such as age (if standard rate is not used), term, annual premium etc. The generated illustration shall illustrate sum assured, year wise cash value or cash values at policy intervals.	Illustrations, 2024 with an option to download.
		Insurer shall maintain record of the generated illustration document.
(xxvi)	Requirement for mandatory call back to policyholder	• Can be made at the discretion of the insurer. • In the case the sales are made through assistance of physical modes (i.e. other than digital) call back confirmation (CBC) shall be undertaken within 3-7 days of the issuance of policy. • In case the policyholders’ response in the CBC is adverse, the premium shall be refunded to the policyholder.
(xxvii)	Requirement for minimum Information at time of purchase of policy	Information as per CNIC and verification of CNIC.	Information as per proposal form and as per Circular No. 06 of 2023 dated April 19, 2023 and verification of CNIC.
		Insurer shall ensure that mobile number used for purchase of policy is in the name of the policyholder.	Insurer shall ensure pairing of mobile number with CNIC through Pakistan Mobile Network Database or conduct video call interview with prospective customer.
		• Insurer may fetch relevant information from Mobile Network Operator(s) (MNOs), Mobile Wallet(s) or Bank(s) etc. subject to formal agreement and consent. • Screening the name and CNIC against proscribed / designated persons and entities as per the statutory notifications issued by Federal Government from time to time.
(xxviii)	Form of insurance policy	E-policy (electronic format). Printed copy of the policy shall be made available on the request of the policyholder. The e-policy shall be bilingual i.e. in English and Urdu language.
(xxix)	Transmission of policy documents and other key documents	Insurer shall ensure that key documents i.e. insurance policy as well as the summary statement of product features shall
		automatically flow to the policyholders on their registered and verified email / SMS on issuance of the policy.
(xxx)	Acceptance of contract and terms and conditions	Acceptance of policyholder on a secured web-based “I agree” or “I accept” button or any other similar mechanism.
(xxxi)	Minimum communication during policy cycle with policyholder	• Through SMS to the policyholder at his registered mobile number in both Urdu and English language covering at a minimum:- - Welcome message covering issuance of policy and free look period. - Premium receipt message. - Renewal notice before the premium due dates. • Additionally, the insurer may also communicate through email or in-app notifications. • Insurer shall give to policyholder a digital receipt of every payment made by the policyholders under the policy.
(xxxii)	Payment of premium	Insurer shall ensure that premium shall be received from the bank account / branchless banking account or through debit / credit card of the policyholder.
(xxxiii)	Claim lodgement and payment	• Insurer shall ensure that claim lodgement including lodgement of surrender claims be enabled digitally. • Insurer shall ensure that claim payment be made directly to the bank account / branchless banking account of the policyholder / beneficiary.
(xxxiv)	Subscription / distribution mode of the product	Website, mobile application, digital platform of the insurer or the technology partner (MNOs, Aggregator, Bank, Mobile Wallet etc.). Physical assistance mode for sales is permitted, but not encouraged.

(6) The requirements of the regulatory framework i.e. the rules, regulations, notifications and circulars issued under the Ordinance or the SECP Act, 1997 shall not be applicable in respect of those matters which are specifically provided for in clause (5) above. Save as provided above, all the other applicable regulatory requirements of the regulatory framework shall be applicable on life insurance savings products distributed through technology based distribution channels.

(7) All life insurers shall within one year of the coming into effect of this directive:

(a) offer at least one life insurance savings product under category A and category B through its own website or mobile application; and

(b) place its savings products under category A and category B on an independent platform providing online aggregation / comparison services.

(8) The insurer shall develop adequate technological capability to conduct the operations digitally in the areas of customer engagement, customer enrolment, distribution, administration, servicing, claim processing and / or any other aspect of its core operations. This may include inter alia the necessary resources to carry out the business operations, the availability of back-up system for business continuity planning and disaster recovery and arrangements to protect the confidentiality of policyholder data.

_____________________________________________________________________________________ [File No. ID/LP&AD/Digital-Savings/2025]

( Bilal Rasool )
Secretary to the Commission