Life Insurance Agency Practice and Professional Standards (IFMP LIAC, Pakistan)
This domain tests the day-to-day conduct of a licensed life insurance agent in Pakistan: how to solicit and advise within the Insurance Ordinance 2000 and SECP requirements, how to handle premiums and client data, and how Takaful differs from conventional life business. Questions often turn on suitability, disclosure, replacement and the disciplinary consequences of misconduct.
Regulatory and licensing frame
- The SECP regulates insurers and insurance agents; an agent must be licensed and appointed by the insurer before soliciting business.
- The Federal Insurance Ombudsman provides redress for policyholder grievances after the insurer's complaint process.
- Takaful is written under the Takaful Rules; an agent must use the operator's approved Wakala/Mudaraba and Tabarru' wording, not conventional insurance language.
- AML/CFT controls require CNIC verification, source-of-funds checks, PEP screening and reporting of suspicious transactions.
Conduct standards
Sell on a documented fact-find. Explain premium, charges, exclusions, waiting periods, surrender values and the non-guaranteed nature of illustrated benefits. Never rebate commission, misstate policy terms, sign a client's declaration, use blank forms or keep premiums in a personal account. Issue the insurer's official receipt and remit promptly. For a replacement, compare the existing and proposed policies and disclose surrender loss, new exclusions and cost. Protect confidentiality and declare conflicts.
Worked example
A client holds an endowment policy with a PKR 2,000,000 sum assured and PKR 350,000 surrender value. An agent wants to move the client into a unit-linked policy and says 'you will get a guaranteed 15%'. That statement is misrepresentation. The agent should calculate the surrender loss and new charges, explain market risk and any new waiting period, test affordability, and complete replacement disclosure. If the switch is unsuitable, the agent should refuse; if it proceeds, document the comparison and client acknowledgement. The test is suitability, not commission.
Traps that cost marks
- Treating a proposal as bound cover before underwriting and premium.
- Presenting unit-linked projections as guaranteed.
- Accepting cash without an official company receipt.
- Filling in the client's health answers.
- Using conventional wording for Takaful or ignoring replacement/AML red flags.