KARACHI, March 15: The Securities and Exchange Commission of Pakistan (SECP) has directed all the insurance companies to make sure that their ensure agents are properly qualified and have competed their respective foundation courses.
A circular issued by the SECP’s Insurance Division has stated that the insurance companies need to make sure that their agents meet the statutory requirements.
It further stated that all the insurance companies are directed to ensure that no person is appointed as an agent, unless he has the minimum prescribed qualifications and has completed the respective foundation course within the time period as specified in the statutory provisions.
It is evident that the insurance agents form one of the most vital links in the insurance business. The insurance agents are the interface of insurance companies with the public at large. A standard professional training to the agents in order to enable them to work effectively for the insurance companies is imperative.
This mandatory requirement has also been prescribed in the Sub-Rule (b) of Rule 26 of the 2002 SECP (Insurance) Rules, issued in pursuance of Section 97 of the 2000 Insurance Ordinance. According to the law, the agents operating in the non-life insurance business shall be required to complete the foundation course of the Pakistan Insurance Institute, within a period of three years and agents operating in the life insurance business shall have to complete a three-moth-long foundation course to be organized by the relevant insurance company.
The insurance agents, who have not completed their respective foundation course within the stipulated time, must complete the same by September 30, 2013. In case of non-compliance, any business or transaction carried out by any agent, lacking requisite qualifications, shall be treated as null void and no payment of commission can be made to them.