ISLAMABAD: The Securities and Exchange Commission of Pakistan (SECP) has approved a new micro-insurance product under the SECP (Microinsurance) Rules, 2014 with the name “First Sehat Tahafuz Plan”, under which micro health (hospitalisation) coverage can be provided to low-income clients of a microfinance institution, a statement said.
The initiative is in-line with the objectives of the National Financial Inclusion Strategy recently adopted by the federal government, and aimed at promoting and developing the microinsurance market in Pakistan. Under the NFIS, the government has committed to providing access to broad-based financial services, including insurance to those consumers who are currently excluded from the financial sector.
For the purpose of bringing financial inclusion through the insurance sector, microinsurance is considered to be of significant importance. Most low-income people face a number of risky incidents such as illnesses, accidents, disability, deaths, natural disasters – all events with negative affects leading to a decline in income or a rise in expenditure or both.
The low-income people are more vulnerable to these risks: they are exposed to a higher number of risks, to more severe risks, and to a higher probability of a risk occurring because of their more hazardous living and working conditions.
Microinsurance can play a vital role in providing social and financial protection against losses by ensuring financial shock absorbency of low-income households to both predictable and unpredictable risk events and to maintain wellbeing.
