May 26, 2023 (MLN): The Securities and Exchange Commission of Pakistan (SECP) has issued requirements for Grievance Handling Mechanism for the Insurance Sector to ensure effectiveness, robustness, and uniformity in the grievance-handling function with the objective of protecting policyholders, a statement issued by the commission revealed. 

The Code of Corporate Governance for Insurers 2016 requires insurers to establish a grievance function.

Giving due consideration to the importance of detailed requirements for the effective functionality of the grievance function in light of the historical trend of policyholder complaints, minimum requirements for the establishment and functioning of a grievance management process have been prescribed.

Accordingly, the issued requirements cover areas of formulation of grievance handling policy, maintenance of a centralized grievance handling system, acceptable modes for lodging complaints, bifurcation of complaints on the basis of criticality, timelines for resolution of complaints on the basis of criticality, communication with policyholders during the process of complaint resolution, etc.

Imparting awareness relating to the existence of grievance handling mechanisms and other available forums, monitoring for continuous improvement, and reporting and record-keeping of complaints-related data.

These requirements are in line with other financial sectors and international best practices and will be applicable to all insurers and takaful operators.

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Posted on: 2023-05-26T19:11:10+05:00