Law: Insurance Ordinance, 2000

Section: 158

Insurance Ordinance (XXXIX of 2000)--Ss. 41 & 158---Securities and Exchange Commission of Pakistan Act (XLII of 1997), S.33---Maintenance of reinsurance treaty arrangement with fake Insurance Corporation by the Insurance Company---Imposition of Penalty--Appeal against---During the inspection of the books of accounts and other record of the Insurance Company, it transpired that Company had maintained its reinsurance treaty arrangements with an Insurance Corporation of which no office existed--Appellant Company was proceeded against and vide impugned order penalty of Rs. one million was imposed upon the appellant-Validity---Appellant had failed to provide evidence of existence of said Insurance Corporation; and also failed to provide any documentation in support of its relationship with said Corporation---Appellant had also made false re-insurance documents in violation of S.158 of Insurance Ordinance, 2000---Appellant, in circumstances, was rightly imposed the maximum penalty---Re-insurance arrangements were one of the basic requirements of the registration of an insurance company and in absence of such an arrangement, no Insurance Company would be allowed to operate. ORDER This order shall dispose of Appeal No. 11 of 2010 filed under section 33 of the Securities and Exchange Commission of Pakistan (the "Commission") Act, 1997 against the order dated 14-1-2010 (the "Impugned Order") passed by the respondent. 2. During the inspection of the books of accounts and other records of the appellant, it transpired that the appellant has maintained its reinsurance treaty arrangements with Korean National Insurance Corporation ("KNIC"). The letter head of the treaty documents of KNIC with the appellant mentioned the address of the KNIC, however, on inquiry it was revealed that there was no such office existed at the address mentioned on the letter head. 3. Show-cause notice dated 10-9-2009 ("SCN") was issb4d to the Chief Executive Officer ("CEO") and Directors of the appellant under section 41 read with section 158 of the Insurance Ordinance, 2000 (the "Ordinance"). The appellant submitted its reply and the CEO and the legal advisor of the appellant appeared for the…

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