Pakistan is developing country. The progress of insurance is at a very slow speed due to (1) illiteracy of the people (2) extreme poverty (3) lack of insurance mindedness (4) personnel and above all the higher rate of interest offered by saving schemes.
1. State Life Insurance Corporation. State Life Insurance Corporation was
established on November 1, 1972 to manage the life insurance business in
Pakistan. The life insurance business was nationalized on March 17, 1972. The
paid up capital of the Corporation was raised to Rs.30 million in 1974 and is
wholly subscribed by the Federal Government. The Federal Government has also
advanced a loan of Rs.25 million to the Corporation.
2. Pakistan Insurance Corporation. The Pakistan Insurance Corporation was
established in 1953 with an authorized capital of Rs. Ten million: Federal
Government hold 51% of the capital and the remaining 40% is subscribed by the
public including national insurance companies. The Pakistan Insurance Corporation
(PIC) provides (1) reinsurance facilities within the country and overseas (2)
it helps the development of national insurance industry by helping in the
promotion of new companies and rendering technical advice to such companies (3)
it also promotes regional co-operation in the field of insurance (4) it also
administers the Export Guarantee Scheme on behalf to the Government.
3. Export Credit Guarantee Scheme. It is entirely owned by the Federal
Government and is managed by the Pakistan Insurance Corporation. It provides
securities to the commercial banks to advance money to the exporters to
indemnify for the loss sustained due to non-realization of sale proceeds on
account of political and commercial risks.
4. Regional Co-operation. It is R.C.D collaboration in the field of
insurance for the purpose of reducing foreign exchange outflow and proving the
standard of insurance and reinsurance in Pakistan.
5. National Insurance. National Insurance Corporation was set up in
1973 with a working capital of Rs.5 million to preserve the public sector
resources and also the provide general insurance service at lower cost to the
public and semi-public organization. The profit earned is to be reverted to the
Government. The Corporation has achieved some progress in respect of reduction
in the cost of insurance early settlement of claims and reduction of outflow of
foreign exchange on account of reinsurance premium.
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