KARACHI: Pakistan on Tuesday introduced a sweeping insurance reform bill aimed at opening the sector to foreign firms, expanding digital insurance services and strengthening consumer protections, as Islamabad pushes broader financial-sector reforms to attract investment and modernize the economy.
The proposed Insurance Bill, 2026, introduced in the National Assembly by the federal government, would replace the 25-year-old Insurance Ordinance, 2000 and overhaul Pakistan’s insurance regulatory framework.
Pakistan’s government has been pursuing wider reforms aimed at improving investor confidence, deepening financial markets and digitizing the economy under an ongoing IMF-backed stabilization program. Insurance penetration in Pakistan remains among the lowest in the region, leaving large parts of the population and economy exposed to financial shocks linked to health emergencies, business losses and climate-related disasters.
The proposed legislation, developed by the Securities and Exchange Commission of Pakistan (SECP), is designed to simplify insurance services through digital onboarding, technology-driven products and streamlined regulatory procedures.
“The proposed law is also expected to attract investment, promote competition and support the development of affordable and modern insurance products in Pakistan, where the sector has long struggled with low penetration, outdated regulations and limited innovation,” the government said in a statement.
The bill would open Pakistan’s insurance market to foreign insurers and reinsurers through branch structures, while also allowing greater private-sector participation in public property insurance and reinsurance services.
Authorities say the reforms are intended to support innovation in the sector by formally recognizing emerging insurtech products and introducing more flexible technology-based distribution models.
The legislation also proposes perpetual licensing for insurers instead of periodic renewals and simplified filing procedures aimed at improving the ease of doing business.
Consumer protection measures include stricter timelines for claims handling, safeguards against mis-selling and more transparent dispute resolution mechanisms.
The bill further introduces a Risk-Based Capital framework for solvency management and grants broader supervisory and enforcement powers to the SECP.
“Insurance plays a critical role in protecting households, businesses and the broader economy from financial shocks,” SECP Chairman Dr. Kabir Ahmed Sidhu said in the statement.
“The Insurance Bill, 2026 is a key step toward enhancing insurance penetration in Pakistan by enabling affordable insurance products through digital platforms for all segments of society,” he added.
The SECP said it had been working with ministries, parliamentary committees and industry stakeholders to build consensus around the reforms and ensure a smooth transition toward the new regulatory regime.
