GOVERNMENT OF PAKISTAN
SECURITIES AND EXCHANGE COMMISSION OF PAKISTAN -.-.-.-

Islamabad, the 5 th July, 2022

NOTIFICATION

S.R.O. 1010(I)/2022.- In exercise of the powers conferred by section 83 of the Insurance Ordinance (XXXIX of 2000), read with sub-section (2) of section 167 thereof, the Securities and Exchange Commission of Pakistan, with the approval of the Policy Board, is pleased to make the following amendments to the Credit and Suretyship (Conduct of Business) Rules, 2018, the same having been previously published in the official Gazette through S.R.O. 345(I)/2020 dated April 28th, 2020 for eliciting public opinion thereon.

AMENDMENTS

In the aforesaid rules, -

1. After the rule 3, the following new rules shall be inserted:

“3A. Risk Assessment of Guarantee/Bond Holder. - (1) An Insurer undertaking credit and suretyship business shall establish and put in place risk assessment mechanism to evaluate the technical and financial strength of the prospective guarantee/bond holders.

(2) The risk assessment mechanism to be devised by the insurer to undertake assessment of the prospective guarantee/bond holder, shall at a minimum cover the following:

(a) measures to gauge the ability to meet current and future obligations;

(b) experience and expertise in respect of the contract requirements for which guarantee/ bond is being solicited; and

(c) financial strength to carry on the project work.

3B. Maintenance of Record and Internal Controls. - (1) An insurer undertaking credit and suretyship business shall maintain record of all bonds/guarantees issued by it.

(2) All the guarantees/bonds issued by the insurer shall be sequentially numbered and internal control mechanisms shall be put in place by the insurer to ensure that all guarantees/bonds issued by it are recorded on the books of the insurer.”

2. In rule 4, for sub-rule (2) the following shall be substituted:

(i) for the figure “80”, the figure “10” shall be substituted; and

(ii) the words “less reinsurance in respect of a particular guarantee/bond” shall be omitted.

[File No. ID/MDPR/C&S/2022]

( Bilal Rasul )
Secretary to the Commission