Law:

Section:

(a) Insurance Companies (Sound and Prudent Management) Regulations, 2012------- --------Regln. 2(2)-------Insurance Ordinance (XXXIX of 2000), Ss.11(i)(f), 12(1)(b), 63(1) & 156-------Failure of insurer to meet criteria for sound and prudent management-------Regulation 2(2) of Insurance Companies (Sound and Prudent Management) Regulations, 2012, provided that Director or Chief Executive, or Principal Officer of the insurer, would not assume the charge of office, until their appointment had been approved by the Securities and Exchange Commission of Pakistan-------Under provisions of S.11(1)(b) Insurance Ordinance, 2000, insurer was to meet criteria for sound and prudent management, set out in S.12 of Insurance Ordinance, 2000-------Company had elected nine Directors for a period of three years-------Said nine Directors had not assumed the charge of office of the Directors and the Chief Executive Officer of the company, with the approval of the Commission-------Company, in circumstances, had contravened the provisions of Regln.2(2) of the Insurance Companies (Sound and Prudent Management) Regulations, 2012 and Ss.12(1)(b) & 11(1)(b) of Insurance Ordinance, 2000; for which punitive actions as provided under S.63(1) and S.156 of the Ordinance, could be invoked-------Representative of the company, had stated that Chief Executive and Directors and the company had obtained approval of the Commission; and that non-compliance was merely a result of misunderstanding of the applicability of the Regulations, as to whether those would be applicable to the elected Directors or not-------Company's representative, further assured that company and all its 'Directors' would ensure compliance with Regulations, in future------- Default of Regulations and relevant Ss.11(1)(f) & 12(1)(b) of Insurance Ordinance, 2000 having been established, Directors under S.63(1) and S.156 of Insurance Ordinance, 2000 penalty could be imposed-------Commission, instead of directing the company to cease entering into new contracts of insurance, or imposing the penalty on the company and its Directors, took lenient view, condoned the default and issued stern warning to its Directors…

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