SECP proposes mandatory timelines for insurance claims

Business Recorder reported that the SECP has floated draft rules requiring insurers to meet fixed deadlines when handling and settling claims, aimed at shielding policyholders and cutting delays. Released on Thursday for public consultation as the Market Conduct Rules 2026, the framework applies solely to individual insurance policies.

Under the draft, a life insurer would need to reach a decision within 20 days after receiving paperwork, while motor claims must be resolved within 5 days of the survey report and other non-life claims within 7. Once approved, payments would have to go out within 7 days. Health cases follow separate timelines: in-patient claims would be settled within 20 days, and hospital discharge authorisations must be issued within 3 hours so that insurer delays cannot keep patients in hospital.

The draft also limits documentation requests to claim-relevant documents and requires insurers to publish settled, rejected and pending claim data online, including the share pending beyond a year. New policy applications must be processed in 7 days, life policy documents issued within 20 days at most, and digitally sold policies within 3 days. Policyholders would gain a right to cancel non-life policies without giving reasons, while fines of up to Rs1 million could apply, with up to Rs10,000 per day for continued breaches. Public and stakeholder feedback is invited within 30 days before the SECP Policy Board considers the rules.