The Islamabad High Court (IHC) has suspended the Securities and Exchange Commission of Pakistan’s (SECP) directive that had halted the guarantee business operations of United Insurance Company of Pakistan Limited. The court’s order provides interim relief to the insurer, enabling it to continue its guarantee-related business until the case reaches a final judgment.
The regulatory dispute dates back to May 20, 2025, when SECP issued a formal direction under Section 60 of the Insurance Ordinance, 2000, requiring United Insurance Company to cease all fresh guarantee business activities with immediate effect. According to SECP, the decision stemmed from serious regulatory breaches, including the company’s failure to fulfill certain guarantee obligations.
On May 21, 2025, SECP followed up with a public statement confirming the action. The commission emphasized that its decision was aimed at protecting the interests of policyholders and guarantee holders while safeguarding overall confidence in Pakistan’s insurance sector. The directive prohibited United Insurance from issuing new guarantees or rolling over existing ones. However, the company was required to honor all previously issued guarantees as they matured, ensuring that existing commitments were not disrupted.
The company responded swiftly by challenging SECP’s directive in the Islamabad High Court. In its petition, United Insurance argued that the regulatory action was excessive and sought judicial relief to resume its guarantee business, which forms a significant component of its operations. The firm maintained that the SECP’s measures risked damaging its market reputation and could adversely affect its financial performance.
In a significant development, the Islamabad High Court has now suspended the SECP’s directive of May 20, 2025. The suspension effectively nullifies the commission’s press release dated May 21, 2025, which had publicly announced the cessation of United Insurance’s guarantee business. With this interim order, United Insurance can resume issuing and renewing guarantees while the broader legal proceedings unfold.
Legal and financial experts suggest that the case underscores the growing importance of judicial oversight in Pakistan’s financial regulatory landscape. While the SECP continues to emphasize strict compliance and investor protection, the courts remain a key venue for companies seeking relief from regulatory actions. The suspension order not only provides breathing space for United Insurance but also signals the judiciary’s role in balancing enforcement with due process.
For the insurance industry, the case highlights the need for robust compliance frameworks and transparent engagement with regulators. At the same time, it reflects the increasing legal scrutiny that accompanies regulatory interventions in financial markets. Market observers will now watch closely how the proceedings progress and whether the interim relief translates into a longer-term resolution favorable to the company.
The outcome of this case could carry broader implications for regulatory enforcement across Pakistan’s insurance and financial services sectors, shaping future interactions between regulators, insurers, and the judiciary.
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