CSIL challenges SECP's directive on credit, surety guarantees

December 27, 2024 (MLN): Crescent Star Insurance Limited (PSX: CSIL) has challenged the Securities and Exchange Commission of Pakistan’s (SECP) directive to cease issuing fresh guarantees under its Credit and Surety business, citing alleged non-compliance with Credit Surety Rules.

The matter is currently sub judice before the Islamabad High Court, where notices have been issued to SECP.

CSIL remains hopeful of securing a stay order, as a similar stay was granted to another insurer by the Lahore High Court, the aforementioned information was disseminated through a notification to Exchange.

The company has defended its position, stating that it adheres to prudent underwriting policies and maintains facultative reinsurance for its Guarantee business.

It also emphasized that SECP has misinterpreted reinsurer communications, denying any misstatement of facts.

With a low claim ratio of 2.5% over the past three years, CSIL considers its Guarantee business among the safest.

CSIL has asserted that the SECP’s directive unfairly targets one class of business, which does not significantly impact its overall operations.

The company is confident the courts will rule in its favor, as previous SECP directions have been overturned by superior courts.

Copyright Mettis Link News