Pakistan Insurance Ordinance Review

Flashcards covering the Pakistan Insurance Ordinance, focusing on business classes, registration, capital requirements, solvency, management, and legal provisions.

According to Section 3(2), a contract of insurance providing for the payment of money on the death of a person constitutes __________ business.

life insurance

A contract providing an annuity for a term not dependent on the continuance of human life but exceeding __________ shall be classified as life insurance.

one year

A contract providing an indemnity for __________ expenses is considered life insurance business under Section 3(2)(e).

medical

An __________ contract is classified as life insurance business under Section 3(2)(g).

investment

A contract with a principal object of life insurance containing subsidiary non-life provisions shall be taken to constitute __________ business.

life insurance

A contract for death benefits is not life insurance if the duration is not more than __________ and payment is only for death by accident.

one year

Contracts not classified as life insurance contracts shall be classified as __________ insurance contracts.

non-life

Class 1 of life insurance business is __________ life business.

ordinary

Class 2 of life insurance business is __________ redemption business.

capital

Class 3 of life insurance business is __________ fund business.

pension

Class 4 of life insurance business is __________ and health business.

accident

Pension fund business means contracts maintained for retirement schemes owned by __________ under the scheme.

trustees

Accident and health business provides fixed pecuniary benefits or benefits in the nature of __________.

indemnity

Non-life Class 1 business is __________ and property damage business.

fire

Non-life Class 2 business is marine, __________, and transport business.

aviation

Non-life Class 3 business is motor third party __________ business.

compulsory

Non-life Class 5 business is __________ compensation business.

workers’

Non-life Class 6 business is __________ and suretyship business.

credit

Non-life Class 8 business is __________ insurance including crop insurance.

agriculture

Treaty reinsurance Class 9 business is __________ treaty business.

proportional

Treaty reinsurance Class 10 business is __________ treaty business.

non-proportional

Marine, aviation, and transport business includes loss of or damage to merchandise and __________ in transit.

baggage

Motor third party compulsory business refers to liabilities specified in the __________ Act, 1939.

Motor Vehicles

Credit and suretyship business includes contracts for __________ bonds and performance bonds.

fidelity

Non-life accident and health business is restricted to a duration of not more than __________.

one year

Agriculture insurance involves loss of or damage to property including __________.

crops

In a proportional treaty, a proportion of __________ is payable to the reinsurer by the cedant.

premium

The __________ may prescribe sub-classes of business by rules.

Commission

The Federal Government may prescribe a class of business as a __________ class.

restricted

Only a public company or a __________ incorporated under Pakistani law (not a private company) may start insurance business.

body corporate

Foreign insurers must transfer business to a new public company within __________ months of the Ordinance commencement.

six

No person shall carry on insurance business without a certificate of __________ from the Commission.

registration

The National Insurance Corporation is deemed registered for __________ from the commencement date.

one year

An application for registration can be made in English or the __________ language.

Urdu

Registration applications from existing insurers must include a plan for compliance with __________ capital and solvency levels.

paid-up

The business plan for life insurance registration must cover a period of not less than __________ years.

ten

An __________ actuary must state that life insurance contracts are sound and workable.

appointed

Any change in registration particulars must be notified to the Commission within __________ days.

14

Giving false or __________ information in a registration notice is prohibited.

misleading

The Commission must be satisfied that the applicant meets criteria for sound and __________ management.

prudent

Life and non-life insurance business cannot be carried on by the __________ insurer simultaneously.

same

The Commission must notify an applicant of registration status within __________ days of receipt.

thirty

If an application is technically deficient, it is not treated as received until the applicant __________ the deficiency.

amended

Conditions on insurers may only be imposed if necessary for the protection of __________.

policy holders

Insurers must be given __________ days' written notice before new conditions are imposed.

thirty

Documents filed with the Commission under Section 6 may be inspected upon payment of a __________ fee.

prescribed

Registration continues until it is __________ by the Commission.

revoked

Registration cannot be revoked unless adequate provision is made for the transfer of __________ liabilities.

insurance

Revocation of registration must be published in the __________.

Gazette

A lost certificate of registration can be replaced by a __________ certificate.

duplicate

Every insurer must appoint an __________ recognised by the Commission.

auditor

Insurers are deemed to have undertaken to abide by decisions of __________ disputes resolution committees.

small

The annual supervision fee is payable by the fifteenth day of __________ every calendar year.

January

The minimum annual supervision fee is Rs. __________.

$$100,000$$

The supervision fee can be one rupee per __________ of gross direct premium written in Pakistan.

thousand

Directors and officers of an insurer must be __________ and proper persons.

fit

A person is not fit and proper to be Chief Executive if they lack experience relevant to __________ operations.

insurance

Insurers must maintain adequate accounting and other __________ of their business.

records

Failure to supervise the activities of a __________ may indicate unsound management.

subsidiary

No insurer shall appoint a __________ agent for the conduct of its business.

managing

Changes to life insurance policy terms must be furnished to the Commission __________ days prior to the offer.

thirty

Every life insurer must maintain at least one __________ fund.

statutory

Life insurance business outside Pakistan requires a separate __________ fund.

statutory

Statutory funds may not be divided or __________ without Commission approval.

amalgamated

A life insurer with share capital must maintain a __________ fund.

shareholders’

A life insurer without share capital must maintain a __________ capital fund.

permanent

Insurers must give __________ days' notice before establishing a new statutory fund.

thirty

A non-investment-linked policy must be referable to __________ statutory fund only.

one

The proportion of premium credited to each fund must be specified if a policy is referable to __________ statutory funds.

two or more

All assets and __________ related to a statutory fund's business must be included in that fund.

investments

Assets, liabilities, revenues, and expenses not attributed to a statutory fund go to the __________ fund.

shareholders’

Apportionment between funds requires written advice from the __________

appointed actuary

__________ between statutory funds maintained by the same insurer is prohibited.

Reinsurance

A __________ payment is an amount credited to a statutory fund that is not required and not from another statutory fund.

capital

Capital contributed to a statutory fund may be distributed as __________ to participating policy holders.

bonuses

The __________ Account identifies retained earnings on participating business for policyholders.

A

The __________ Account identifies non-distributable retained earnings for shareholders.

B

The __________ Account identifies distributable retained earnings for shareholders.

C

The __________ Account identifies retained earnings on non-participating business.

D

Not less than __________ per cent of surplus from participating contracts must be allocated to the A Account.

ninety

Dividends to life insurance shareholders may ONLY be declared or paid from the __________ fund.

shareholders’

Interim bonuses may be declared on the recommendation of the appointed __________.

actuary

Existing life insurance funds had to be converted to statutory funds by 31st December __________.

$$2001$$

An appointed actuary cannot be dismissed without the permission of the __________.

Commission

The minimum paid-up capital for a life insurer is __________ rupees (subject to Federal prescription).

$$150\,million$$

The minimum paid-up capital for a non-life insurer is __________ rupees.

$$80\,million$$

Insurers must deposit the higher of __________ rupees or 10% of paid-up capital with the State Bank of Pakistan.

$$10\,million$$

Statutory deposits must be kept in cash or __________ market-valued securities.

approved

Deposits made for life insurance business are deemed part of the __________ fund.

shareholders’

Government securities are __________ assets for solvency purposes unless encumbered.

admissible

Intangible assets like __________ are not admissible assets.

goodwill

Established costs that have been __________ are inadmissible assets.

capitalised

A person holding less than __________ per cent of shares is not considered a shareholder for loan admissibility rules.

one

Premiums due for more than __________ months are inadmissible assets.

three

Office equipment and __________ are listed as inadmissible assets.

vehicles

Two natural persons are 'related' if they are members of the same __________.

family

Immovable property in __________ is considered an asset in Pakistan.

Pakistan

No asset of an insurer shall be valued at more than the amount net of __________ costs.

transaction

Non-life liabilities for outstanding claims must include provision for __________ development.

adverse

Life insurers must maintain a surplus of at least __________ rupees in their shareholders' fund (as of end of 2004).

$$75\,million$$