ISLAMABAD: The Securities and Exchange Commission of Pakistan (SECP) has officially halted the guarantee business of The United Insurance Company of Pakistan Limited, effective May 20, 2025, citing serious regulatory violations and failure to honour financial commitments.
The decision, made under Section 60 of the Insurance Ordinance, 2000, comes after the company was found to have refused encashment of guarantees amounting to Rs2.2 billion as of December 2023. The regulator had earlier served a show-cause notice, prompting United Insurance to obtain a stay order from the Lahore High Court in February 2024. However, the petition was dismissed on April 10, 2025, as being without merit.
According to SECP, it also received complaints worth Rs822 million over non-encashment of guarantees during 2024 and 2025. The company repeatedly failed to meet compliance standards, despite being given multiple opportunities to present its case.
Further aggravating the case, United Insurance was found to have made materially false claims regarding the settlement of a guarantee worth around Rs1 billion. This matter is now under separate proceedings.
With this Direction, United Insurance has been barred from issuing new guarantees or rolling over existing ones. However, it has been instructed to honour all existing guarantee obligations as they mature.
The company may seek modification or cancellation of this Direction, subject to fulfilling all regulatory conditions, including settling outstanding liabilities and securing appropriate collateral.
The SECP emphasized that the action aims to protect policyholders and guarantee holders and maintain public trust in the insurance sector.
Since July 1, 2024, the SECP has handled over 3,000 complaints, resulting in Rs1.3 billion in recoveries for policyholders—a part of its broader push for stronger regulatory compliance and consumer protection in Pakistan’s financial sector.
