IFMP Life Insurance Agents Certification (LIAC), Pakistan cheat sheet

Life Insurance Agency Practice and Professional Standards (Pakistan)

• Regulatory frame: life insurance business in Pakistan is supervised by the Securities and Exchange Commission of Pakistan (SECP) under the Insurance Ordinance, 2000; agents must hold a licence from the insurer and be registered as required, and must deal only through a licensed insurer.

• Agent licensing path: sponsor an insurer, complete the prescribed pre-appointment training and the LIAC-type certification, submit the application with identity and qualification documents, and renew before expiry; soliciting while unlicensed or lapsed is a breach exposing both agent and insurer to penalties.

• Utmost good faith (uberrimae fidei): the proposer must disclose all material facts on the proposal form; a material fact is one that would influence a prudent underwriter's decision on acceptance, rating or terms. Non-disclosure or misrepresentation can void the contract.

• Insurable interest: the proposer must have a legally recognised interest in the life assured at inception - self, spouse, dependent, or key person/creditor to the extent of the debt. Absence of insurable interest makes the contract void, not merely voidable.

• Free-look period: the policyholder may return the policy within the period stated in the policy document (commonly 14 days from receipt) for cancellation and refund of premium less any stated charges; the agent must inform the client of this right at delivery.

• Premium payment and grace period: premiums are payable as contracted; a grace period (typically 30 days for non-monthly modes, 15 days for monthly) keeps cover in force, after which the policy may lapse or acquire reduced paid-up/automatic premium loan treatment under its terms.

• Nomination and assignment: a nomination directs policy money to the nominee but does not transfer ownership; assignment transfers rights. Under the Insurance Ordinance a nominee's receipt discharges the insurer, and nomination must be recorded with the insurer to be effective.

• Suitability and needs analysis: before recommending a product the agent must document the client's age, dependants, income, existing cover, liabilities and affordability, then match sum assured, term and premium to the identified need rather than to commission.

• Anti-money-laundering and KYC: agents must verify identity, record source of funds for large or unusual premiums, screen against prescribed lists, retain records for the statutory period, and report suspicious transactions to the insurer's compliance officer.

• Disclosure and conduct: present benefits, exclusions, waiting periods, surrender values and charges accurately; do not compare products using misleading figures, do not promise guaranteed returns on unit-linked plans, and do not rebate commission - rebating is a market-conduct violation.

• Commission and remuneration: first-year and renewal commission rates are set by the insurer within regulatory limits; commission is earned on premiums actually received and in-force, and lapses or refunds trigger clawback under the agency agreement.

• Record keeping and service standards: maintain a register of clients, proposals, premium receipts and complaints; deliver the policy document promptly, confirm receipt, assist with claims documentation, and route grievances to the insurer's complaint cell and then the SECP.