- Committee suggests introduction of e-stamping regime for insurance policies
ISLAMABAD: The Technical Committee on Insurance (TCI) formed in pursuance of the National Financial Inclusion Strategy (NFIS) has conducted a meeting to propose amendments to the stamp duty laws administered by the provincial revenue boards.in Islamabad.
The meeting was attended by the members of NFIS – TCI, including the Insurance Association of Pakistan chairman, representatives of insurance companies and the State Bank of Pakistan.
Under the existing laws, insurance companies are required to physically affix the stamps on all insurance policy documents. This poses an administrative hurdle in case of policies that are sold electronically.
During the meeting, progress update of previous tasks was submitted, while new proposals were presented for deliberation. The tasks completed by the NFIS-TCI included formulation of English-Urdu glossary, defining 200 words for use in insurance policy documents and promotional activities, reduction in NADRA verification cost for microinsurance policies and rationalization of enhanced due diligence requirement for the insurance products distributed through digital platforms.
The ongoing tasks included implementation of compulsory group life insurance, motor third party liability insurance and inculcation of insurance related content in academic curriculum at various levels.
The committee suggested that in order to enhance financial inclusion through promotion of technology-based alternative distribution channels, it is essential to remove the bottlenecks and hurdles from the processes and streamline the systems. Therefore, the committee proposed to introduce an electronic stamping (e- stamping) regime for all provinces for insurance policies to promote distribution of insurance through technology-based channels such as mobile phone, internet, mobile applications etc.
The committee deliberated upon the usage of digital platforms for dissemination of insurance policy documents and affirmed that such methods will not only help in cost saving for the insurers but will also bring efficiencies in the processes, with an improvement in the customer journey. However, the amendment to the stamp duty laws are a prerequisite to practice the aforementioned methods.
