Eligibility Criteria:

  • No person who is not a company shall be eligible to be licensed as an insurance broker.

Pre-requisites:

  • A minimum paid-up share capital of not less than ten million rupees for local brokers and 0.3 million US dollars for a foreign insurance broker to be registered in Pakistan;
  • statutory deposits in the amount of 0.5million rupees maintained with the State Bank of Pakistan; and
  • professional indemnity insurance to a limit of ten million rupees for any one occurrence.

Application for Licensing:

  1. An application for grant of a license or renewal of license to act as an insurance broker shall, for the purposes of sub-section (4) or (5) of section 102 of the Ordinance, shall contain the following details in respect of the applicant, namely :—
    1. Its name;
    2. the address of its registered office;
    3. its postal address (if different);
    4. a description of the business carried on by it (other than insurance broking);
    5. the names of insurance companies, if any, which have appointed the applicant as insurance agent;
    6. the names & pattern of shareholding and details of shareholders holding more than ten per cent of the issued share capital;
    7. the names & particulars including qualification, experience, etc. of all directors of the body corporate; and
    8. evidence, in original or certified copy form, of compliance with the prescribed qualifications.
  2. Every application shall be accompanied by a declaration by the applicant stating that-
    1. the information given by him is complete and correct;
    2. he has complied with the requirements of the Insurance Ordinance 2000 and the rules made thereunder concerning the required qualifications of an insurance broker;
    3. he undertakes to comply, and (in the case of an existing insurance broker) declares that he has during the previous twelve months complied with being the Insurance Ordinance 2000 and the rules made thereunder concerning the conduct of an insurance broker; and
    4. neither the body corporate, nor any director of the body corporate, nor any officer of the body corporate engaging in the business of insurance broking, is disqualified from acting in the business of insurance broking by virtue of—
      1. being a minor;
      2. having been found of unsound mind by a Court of competent jurisdiction;
      3. having been found guilty, within five years preceding the date of the declaration, of criminal misappropriation or criminal breach of trust, cheating or forgery or an abetment of or attempt to commit any such offence by a Court of competent jurisdiction;
      4. having served any custodial sentence imposed by a Court of competent jurisdiction, ending within five years preceding the date of the declaration;
      5. having been found guilty by a Court of competent jurisdiction of any offence involving insurance; or
      6. having been otherwise declared as disqualified by the Insurance Tribunal, other than for a term which had expired prior to the date of the declaration.
  3. Every application and declaration required shall be made in writing and the declaration shall be signed by at least two directors of the body corporate.

Documentary Evidences:

An application for an insurance broker’s license should be accompanied by the following documents,  namely:

  • certified true copy of the last filed Form A, 21 & 29, attested by the concerned CRO;
  • certified true copy of the Memorandum and Articles of the broker and Certificate of Incorporation attested by the concerned CRO;
  • evidence of professional indemnity insurance policy;
  • evidence that the requisite amount has been deposited as statutory deposit with the State Bank of Pakistan;
  • a declaration form to the effect that neither the applicant nor any director or principal officer of the applicant is disqualified from holding his office as such;
  • a letter of support from not fewer than five registered insurers, each signed, on behalf  of the insurer, by a duly authorised representative;
  • original challan of the fee deposited in the designated bank account in the amount of Rs.10,000;
  • confirmation from the external auditors in respect of the minimum paid up capital;
  • feasibility Study and Business Plan containing 3 years financial projections;
  • CVs in respect of the Chief Executive Officer, Directors & Key Officers along with experience certificates of two employees at least one of whom must be a director. The proposed broker should ensure that not fewer than two employees (at least one of whom must be a director) should have a minimum of five years’ experience working in or in relation to the  insurance industry, as—
    1. an employee of an insurer; or
    2. an agent; or
    3. an employee of an agent; or
    4. an employee of an insurance broker; or
    5. in such capacity, related to the business of insurance, as satisfies the Federal Government that the person has appropriate experience and knowledge to undertake the business of insurance broking;
  • An undertaking is required that neither the body corporate nor any director of the body corporate, nor any officer of the body corporate engaging in the business of insurance broking—
    1. is a minor;
    2. has been found of unsound mind by a Court of competent jurisdiction;
    3. has been found guilty, within the five years preceding the present date, of criminal misappropriation or criminal breach of trust, cheating or  forgery or an abetment of or attempt to commit any such offence by a Court of competent jurisdiction;
    4. has served any custodial sentence imposed by a Court of competent  jurisdiction, ending within the five years preceding the present date;
    5. has been found guilty by a Court of competent jurisdiction of any offence involving insurance; or
    6. has been otherwise declared as disqualified by the Insurance Tribunal, other than for a term which had expired prior to the present date.

Conflict of Interest:

It is mandatory that no insurer or no director of an insurer should hold any direct or indirect ownership interest in an insurance broker or take part in the management or direction of an insurance broker or vice versa.

Period of Licensing:

An insurance broker’s license shall be issued initially for a period of one year and may on application in the prescribed form be renewed annually.

Withdrawal and Refusal of Licensing:

The Commission may cancel or refuse to issue or renew a broking license, where the Commission believes on reasonable grounds that the broker has contravened a provision of the Insurance Ordinance 2000, including without limitation that the broker has failed to maintain prescribed minimum levels of paid-up capital, statutory deposit or professional indemnity insurance.