SECP Announces Inflation Adjusted Growth Rate Scenarios for Insurance Operators - Android

The Securities and Exchange Commission of Pakistan (SECP) has announced the growth rate/inflation-adjusted growth rate scenarios for the life insurers… Read More

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The Securities and Exchange Commission of Pakistan (SECP) has announced the growth rate/inflation-adjusted growth rate scenarios for the life insurers and family takaful operators for the year 2021 to facilitate the policyholders.

Through a circular number 1 of 2021 issued by the SECP on Tuesday, the SECP has maintained the said rates of 2020 during 2021 for the life insurers and family takaful operators.

The SECP has released the details of such rates for the general public through circular 1 of 2021.

The commission has also shared the said circular with the concerned associations, insurance companies, and Takaful operators.

The SECP circular stated that attention is invited towards clauses 8.1, 8.2 and 11.1 of the directive for life insurance family takaful illustrations for 2016 vide SRO.255(I)/2016 dated March 25, 2016.

It stated that life insurers and family takaful operators use three growth rate scenarios and three inflation-adjusted growth rate scenarios to demonstrate projected benefits to potential policyholders. The SECP specifies these scenarios based on the long-term interest rate outlook prevalent in Pakistan.

In this regard, the Commission in consultation with the Pakistan Society of Actuaries has decided that for the year 2021, there would be no change in the nominal rate of return and inflation-adjusted rate of return as specified for the year 2020 through circular number 1 of 2020 dated January 23, 2020, SECP maintained.

Accordingly, for the year 2021 and onwards, the nominal rate of return would remain at 8 percent, 10 percent, and 12 percent and the inflation-adjusted rate of return would remain at 3 percent, 4 percent, and 5 percent, circular of the SECP stated.

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