Govt unveils major insurance sector reforms under new bill 2026

May 19, 2026 (MLN): The Federal Government has introduced the Insurance Bill, 2026 in the National Assembly to make insurance services simpler, faster and more accessible for citizens through digital platforms.

The legislation, proposed by the Securities and Exchange Commission of Pakistan (SECP), aims to replace the 25-year-old Insurance Ordinance, 2000 and facilitate quicker claim settlements along with stronger consumer protection mechanisms.

The proposed law is also expected to attract investment, promote competition and support the development of affordable and modern insurance products in Pakistan, where the sector has long struggled with low penetration, outdated regulations and limited innovation.

Under the proposed framework, insurance services will become more streamlined and accessible through digital onboarding, tech-driven insurance products and simplified regulatory procedures, making the sector more efficient for both providers and policyholders.

Key reforms in the Insurance Bill, 2026 include market liberalization by opening Pakistan’s insurance sector to foreign insurers and reinsurers through branch structures, and promoting private sector growth by allowing participation in public property insurance and granting private reinsurers the first right of mandatory reinsurance.

The bill also focuses on digital transformation by introducing tech-driven distribution models, flexible intermediary structures and formal recognition for emerging insurtech products.

In addition, ease of doing business measures include replacing periodic renewals with perpetual licensing and simplifying regulatory filing processes.

For stronger consumer protection, the legislation mandates stricter claim-handling timelines, safeguards against mis-selling and transparent dispute resolution mechanisms.

It also introduces a risk-based capital framework along with early corrective action mechanisms to improve financial resilience and solvency management.

The SECP has been working closely with federal ministries, parliamentary committees and stakeholders to build consensus and ensure smooth implementation of the proposed reforms.

SECP Chairman Dr. Kabir Ahmed Sidhu said that insurance plays a critical role in protecting households, businesses and the broader economy from financial shocks.

He added that the Insurance Bill, 2026 will help enhance insurance penetration in Pakistan by enabling affordable insurance products through digital platforms for all segments of society.

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