Law: Securities and Exchange Commission of Pakistan Act, (XLII of 1997)

Section: 33

Security and Exchange Commission of Pakistan Act (XLII of 1997)--S.33---Insurance Ordinance (XXXIX of 2000), Ss. 29(2)(3) & 36--Mutual Insurance Company---Financial criteria---Lack of paid-up capital---Appellant was directed to deposit an amount of Rs.10 million as a liquidity reserve pursuant to requirement of S.29(2) of Insurance Ordinance, 2000---Validity---Required minimum amount of deposit under S.29(2)(a) of Insurance Ordinance, 2000, was to be the higher of Rs.10 million or 10% of the insurer's paid-up capital---Lack of paid-up capital of a mutual insurance company meant that it had to deposit Rs.10 million---Meaning attributed to expression "mutual insurance company" in definition section of Insurance Ordinance, 2000, could not control the substantive provisions of the Ordinance---For non-life insurers and for all insurers across the board imposed specific qualifying financial criteria that was meant to establish their financial and business credibility---Such provisions created clear and definite obligations that could not to be avoided by resort to statutory interpretation---Statutory requirement for a cash deposit by Insurance Company with State Bank of Pakistan was binding and must be complied by the company--High Court declined to interfere in the demand raised against the company---Appeal was dismissed in circumstances. ORDER UMAR ATA BANDIAL, J.---This appeal is directed against the impugned order passed by Appellate Bench No.1 Securities and Exchange Commission of Pakistan under section 33 of the Securities and Exchange Commission of Pakistan Act (XLII of 1997) whereby the appellant has been directed to deposit an amount of Rs.10 million as a liquidity reserve pursuant to the requirement of section 29(2) of the Insurance Ordinance, 2000 ("Ordinance"). The only question of law raised by the learned counsel for the appellant is that the requirement of the said liquid deposit to be made with the State Bank of Pakistan under section 29(3) of the Ordinance, is meant for insurance companies formed with paid-up capital and not for mutual insurance companies that as a matter of law are incorporated without such capital and are limited by guarantee.…

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