The Securities and Exchange Commission of Pakistan (SECP) has revised the eligibility criteria for the appointment of Chief Financial Officers (CFOs) in insurance companies. The SECP announced this change in a new S.R.O. 1586(I)/2024, amending the Code of Corporate Governance for Insurers, 2016. This regulatory update was released on Saturday, with changes aimed at strengthening financial leadership within the insurance sector.
Expanded Criteria for CFO Eligibility
Under new regulations, members of specific actuarial societies can now qualify for CFO roles in insurance companies. The SECP now allows Fellows or Associates from the Casualty Actuarial Society, the Institute of Actuaries in England, and the Society of Actuaries in the U.S. to be eligible. However, they must also have at least five years of experience in managerial roles in audit, accounting, or financial management. This change broadens the criteria, allowing actuarial professionals with financial experience to qualify for these roles.
“This amendment widens the pool of qualified professionals who can strengthen insurance companies’ financial stability,” the SECP announced in its statement.
Legal Basis for the New Rules
The SECP used specific powers under the SECP Act, 1997, and the Insurance Ordinance, 2000, to make these changes. The new rule falls under clause (xxi) of the Code of Corporate Governance for Insurers. This additional proviso officially expands eligibility for the CFO position in the insurance sector.
The SECP had earlier shared these changes for public feedback on July 8, 2024, through S.R.O. 1087(I)/2024. Following the collection of public comments, the SECP finalized the amendment.
Enhancing Corporate Governance in Insurance
This revision is part of SECP’s broader efforts to improve corporate governance and financial accountability in the insurance industry. By allowing professionals from actuarial societies with managerial experience to qualify for CFO roles, the SECP aims to bring diverse expertise into the financial management of insurers.
According to the SECP, “This amendment will allow insurers to tap into a broader range of financial and managerial expertise, ultimately promoting a stronger governance structure within the insurance sector.”
Purpose and Impact of the New Amendment
The SECP’s updated criteria aims to equip insurance companies with more qualified and experienced financial leaders, helping them navigate complex financial regulations and industry standards. With this amendment, insurers now have the flexibility to consider a wider range of candidates with relevant financial expertise and managerial skills.
SECP’s Ongoing Regulatory Enhancements
The SECP has been actively implementing regulatory improvements across Pakistan’s financial sector. This latest amendment for insurance CFOs is aligned with SECP’s goals to increase transparency and improve governance. These changes reflect the SECP’s commitment to adapting corporate governance codes to meet the evolving needs of the financial sector.
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