Islamabad High Court suspends SECP's direction against United Insurance Company

MG News | September 05, 2025 at 09:41 AM GMT+05:00

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September 05, 2025 (MLN): The Islamabad High Court has suspended the Securities and Exchange Commission of Pakistan's (SECP) directive that had ceased the guarantee business operations of United Insurance Company of Pakistan Limited.

This provides interim relief to the insurance firm.

Background of the Regulatory Action

On May 20, 2025, the SECP issued a direction to United Insurance Company of Pakistan Limited to cease its fresh guarantee business operations immediately.

The regulatory action was taken under Section 60 of the Insurance Ordinance, 2000, following what the SECP described as serious regulatory violations and the company's failure to honor guarantee obligations.

The SECP subsequently issued a press release on May 21, 2025, announcing the decision and stating that the action was taken to protect the interests of policy and guarantee holders while maintaining public trust in the insurance sector.

The commission prohibited the company from issuing new guarantees or rolling over existing ones, though it was instructed to honor all existing guarantee obligations as they matured.

Legal Challenge and Court Intervention

Following the SECP's directive, United Insurance Company of Pakistan Limited filed a petition before the Honorable Islamabad High Court challenging the regulatory decision.

The company sought judicial intervention to overturn the SECP's action, arguing against the cessation of its guarantee business operations.

In a significant development, the Islamabad High Court has now suspended the SECP's Direction dated May 20, 2025, granting interim relief to the insurance company.

This judicial intervention allows United Insurance to resume its guarantee business operations pending the final resolution of the legal proceedings.

As a consequence of the court's suspension order, the SECP's press release dated May 21, 2025, announcing the cessation of United Insurance's guarantee business now stands withdrawn.

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