SRO 896(I)/2016: Directive on Group Health Insurance Claims Register

GOVERNMENT OF PAKISTAN

SECURITIES AND EXCAHNGE COMMISSION OF PAKISTAN

Islamabad, the 21st September, 2016

NOTIFICATION

S.R.O 896 (I)/ 2016: In exercise of the powers conferred by the Section 40B of the Securities and Exchange Commission of Pakistan Act, 1997 (Act XLII of 1997) read with clause (u) of sub-section (4) of Section 20 thereof and in continuation of SRO 162(I)/ 2014 dated 12th March, 2014, the Securities and Exchange Commission of Pakistan hereby issues the following directive to all companies registered as life and non-life insurers under the Insurance Ordinance, 2000 (XXXIX of 2000) including the family and general takaful operators, which are engaged in underwriting the business of group health insurance business.

(1) Group health insurance means policy issued on group underwriting basis through a master policy document offered on yearly renewable term. The policyholder is a company, body corporate, bank, registered association, or any enterprise. For the purposes of this Directive, “insurance” includes “takaful” and insurer includes “takaful operator”.

(2) This Directive shall apply to the functioning of the register of group health insurance claims experience (hereinafter to be referred as the “health register”) to be added in the Centralized Information Sharing Solution for Insurance Industry (CISSII), in accordance with the Memorandum of Understanding (MoU) signed between the insurance companies/ takaful operators and the Central Depository Company of Pakistan (CDC) on July 28, 2016 and August 5, 2016 for addition of health register in the CISSII, the information sharing solution already developed and maintained by the CDC. The detailed rights and obligations of the parties and the CDC with regards to confidentiality and security of information shall be provided in the CISSII participation agreement.

(3) The primary objective of addition of health register in the CISSII is to enable the insurance companies/ takaful operators to make informed decision in respect of underwriting and pricing of health risks due to availability of enhanced information. This will encourage the organized development of the insurance market in Pakistan and help protect the interests of policyholders in respect of maintenance of minimum service standards.

(4) All life and non-life insurers/ takaful operators which are engaged in underwriting the business of group health insurance are required to share information in respect of their group health insurance business with the CDC in accordance with the health register participation agreement.

(5) All life and nonlife insurers, which are not engaged in group health insurance business as on notification date of this directive, and any life or non-life insurer registered under the Insurance Ordinance, 2000 after the notification of this directive, will be required to share information on the health register of the CISSII by signing the MoU and the health register participation agreement, as soon as they get registered and start underwriting the group health insurance business, after the notification date of this Directive.

(6) The health register will enable sharing of information regarding health insurance claims experience triggered by certain prespecified parameters, as stated in the participation agreement.

(7) Where any difficulty arises in giving effect to any of the provisions of this Directive in particular cases, or class of cases, or if it would be in interest of the insurance sector to do so, the Commission may, for reason to be recorded in writing, relax such requirements subject to such conditions as it may deem fit.

(8) All life and non-life insurers/ takaful operators engaged in underwriting the group health insurance business are required to enter into health register participation agreement on or before October 31, 2016 and share the information in accordance with the health register participation agreement from November 1, 2016.

No.ID/PRDD/HI-CISSII/2016

(Bushra Aslam)
Secretary to the Commission