ISLAMABAD: The Securities and Exchange Commission of Pakistan (SECP) has halted the guarantee business of Crescent Star Insurance Limited (Crescent Star) due to violations of regulatory requirements. The company issued guarantees worth Rs. 229 billion without securing the necessary collateral or valid reinsurance arrangements.
Despite multiple opportunities to comply, Crescent Star failed to meet SECP’s requirements, prompting the regulator to issue a Direction under section 60 of the Insurance Ordinance, 2000. SECP’s investigation revealed that Crescent Star misrepresented its reinsurance arrangements, which were denied by the concerned insurance company.
The SECP has ordered Crescent Star to cease rolling over existing guarantees and fulfill its obligations as they come due. The company is required to submit a monthly comparative statement of outstanding guarantees to SECP.
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SECP’s action aims to safeguard the integrity of Pakistan’s insurance sector. Similar proceedings are underway against United Insurance Company of Pakistan Limited, which faces similar issues related to guarantees business compliance.
In addition to these actions, SECP has resolved over 2,300 complaints in the first half of FY2024-2025, recovering Rs. 268 million for claimants, strengthening public trust in the regulatory framework.
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