SECP Draft Actuarial Valuation Rules 2025 Released
The Securities and Exchange Commission of Pakistan (SECP) has put out its draft Actuarial Valuation Rules 2025
The Securities and Exchange Commission of Pakistan (SECP) has put out its draft Actuarial Valuation Rules 2025 this week, opening them up for public comments. It’s part of the regulator’s broader push to modernize the insurance and Takaful sectors under its “Journey to an Insured Pakistan” plan. In simple terms, the draft sets out how insurers and Takaful operators should calculate their liabilities and reserves, bringing local practices closer to international standards.
What’s new here is that the SECP wants insurers to rely on more consistent, principle-based methods rather than leaving too much to individual discretion. For long-term business, the draft leans on gross premium valuation, while for short-term policies it updates the way companies calculate both premium reserves and claims. These may sound like technical tweaks, but they go a long way in shaping how companies manage risk and how secure policyholders’ money really is.
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The draft was developed with input from the Pakistan Society of Actuaries, and it mirrors ideas you’ll find in international standards, like those set by the International Association of Insurance Supervisors. The SECP is also nudging the industry toward a risk-based capital regime, which means companies will need to hold financial cushions that reflect their actual risk rather than one-size-fits-all requirements. That’s a big shift for local players, especially smaller firms that may not have the same systems or expertise in place yet.
Another part of the rules focuses on improving the quality of data and standardizing how insurers submit their valuation reports. It might sound dry, but reliable, comparable numbers are critical if regulators want to spot problems early and if policyholders want to feel confident their insurer is solvent.
Why does this matter? For one, it should give customers more peace of mind. If insurers are reserving properly and using transparent methods, the chances of sudden collapses or unpaid claims go down. It also levels the playing field, because all companies are judged by the same yardstick. And for the industry itself, aligning with global practices makes it easier to attract investment and build credibility.
That said, there are challenges. Smaller insurers and Takaful operators could find it tough to adapt, whether it’s the cost of hiring more actuaries, investing in better systems, or just shifting their mindset. There’s also the question of how well global frameworks fit with Pakistan’s realities, where things like inflation or mortality trends might not match international assumptions.
For now, the SECP has opened the draft for public consultation, giving stakeholders 30 days to share feedback. They’re expected to hold meetings with insurers, actuaries, and other industry players before finalizing the rules. How flexible they are in responding to that feedback will decide whether these changes land smoothly or stir up friction.
In short, the draft rules are a serious attempt to strengthen the insurance and Takaful sectors, protect policyholders, and make the system more resilient. The idea makes sense, but the execution especially how smaller players adapt and will be worth watching closely in the months ahead.
