ISLAMABAD: The Competition Commission of Pakistan (CCP), in its policy note to the federal government, has asked it to amend Section 166 of the Insurance Ordinance, 2000 for ending the ‘monopoly’ of the National Insurance Company Limited (NICL).
According to the CCP, the Section 166 of the Insurance Ordinance, 2000 prevents competition in the non-life insurance market. The commission has pointed out that the Section 166 (3) of the Insurance Ordinance provides that all insurance business relating to any public property or to any risk or liability appertaining to any public property, shall be placed with NICL only and shall not be placed with any other insurer.
The National Insurance Company Limited is the only state-owned company, under the administrative control of the Ministry of Commerce, which is involved in non-life insurance business in the country.
The CCP observed that this statutory monopoly of NICL harms competition in the insurance market. In this case the government is the direct consumer and is denying itself the benefits of competition such as improved quality of service and competitive premiums.
