Part 1
“Appointed actuary” means the actuary required to be appointed by a life insurer pursuant to the
provisions of section 26 of this Ordinance. “auditor” means a person qualified under the provisions of
section 254 of the Companies Ordinance, 1984 (XLVII of 1984), to act as an auditor of companies
“authorized person” means, in the case of a company, a director, including the chief executive, or in
the case of insurers being bodies corporate incorporated outside Pakistan and continuing business
as such after the commencement of this Ordinance, the closest comparable equivalent thereto,
under the laws of the place of incorporation of such foreign body corporate. “Banking company” has
the meaning assigned to the term in clause (a) of section 2 of the Banking Companies (Recovery of
Loans, Advances, Credits and Finances) Act, 1997 (XV of 1997). “Borrower” has the meaning
assigned to the term in clause (c) of section 2 of the Banking Companies (Recovery of Loans,
Advances, Credits and Finances) Act, 1997 (XV of 1997). “Class of business” means a classification
of insurance business having similar characteristics, into which life insurance or non-life insurance
may be divided. “customer” has the meaning assigned to the term in clause (d) of section 2 of the
Banking Companies (Recovery of Loans, Advances, Credits and Finances) Act, 1997 (XV of 1997).
“Finance” has the meaning assigned to the term in clause (e) of section 2 of the Banking Companies
(Recovery of Loans, Advances, Credits and Finances) Act, 1997 (XV of 1997). “group” in relation to
contracts of life insurance, including health insurance, means contracts having a term not dependent
on the termination or continuation of human life, under which the benefits are payable to a member
of a group defined in the contract on the happening to that member during the term of the contract of
a contingency defined in the contract, not being a contingency which is bound to happen.
“Insurance” means the business of entering into and carrying out policies or contracts whereby, in
consideration of a premium received, a person promises to make payment to another person
contingent upon the happening of an event, specified in the contract, on the happening of which the
second-named person suffers loss, and includes reinsurance and retrocession. “Insurance broker”
means a person carrying on the business of insurance broking. “investment-linked” in relation to life
insurance means investment contracts, the principal object of which is the provision of benefits
calculated by reference to units, the value of which is related to the market value of a specified class
or group of assets of the party by whom the benefits are to be provided. “Lender” means a person
inside or outside Pakistan carrying on the business of advancing money by way of loans or finance
and includes a banking company. “Loan” has the meaning assigned to the term in clause (f) of
section 2 of the Banking Companies (Recovery of Loans, Advances, Credits and Finances) Act,
1997 (XV of 1997). “Managing agent” has the meaning ascribed to that term in section 206 of the
Companies Ordinance, 1984 (XLVII of 1984). “Mutual insurance Company” means an insurer, being
a company incorporated under the law of Pakistan or any country or state other than Pakistan, which
has no share capital and of which, by its constitution, only and all policy holders are members.
“Participating”, in reference to life insurance business, means contracts of life insurance, other than
investment-linked contracts, health contracts, group life contracts and group health contracts, under
the terms and conditions of which the policy holder has an entitlement to participate in distributions
by the life insurer of profits or surpluses. “policy holder” means the person to whom a policy is issued
or, in the case of a policy of life insurance, the person to whom the whole of the interest of the policy
holder in the policy is assigned once and for all, but does not include an assignee thereof whose
interest in the policy is defeasible or is for the time being subject to any condition. "policyholder
liability", in relation to life insurance, means “private company” has the meaning assigned to it in
clause (28) of subsection (1) of section 2 of the Companies Ordinance, 1984 (XLVII of 1984).
“Scheduled bank” has the meaning assigned to it in clause (m) of section 2 of the State Bank of
Pakistan Act, 1956 (XXXIII of 1956). “Subsidiary” or “subsidiary company” has the meaning assigned
to it in clause (38) of sub-section (1) of section 2 of the Companies Ordinance, 1984 (XLVII of 1984).
“Surveyor” means a person who examines the goods, property or any interests insured under a
contract of non-life insurance to express an independent opinion as to the cause, extent, location
and amount of any loss incurred or claimed to be incurred under that contract. “Unit”, except in
section 32, means a notional share in the net value of a specified class or group of assets of a
statutory fund of an insurer carrying on life insurance business, the value of which is to be used as a
basis for determination of the benefits payable under an investment linked contract. (2) Subject to
sub-sections (3), (4) and (5), the effecting and carrying out of any or all of the following type of
contracts shall constitute the carrying on of life insurance business; namely:
(a) A contract of insurance that provides for the payment of money on the death of a person or on
the happening of a contingency dependent on the termination or continuance of human life
(b) A contract of insurance that is subject to payment of premiums for a term dependent on the
termination or continuance of human life
(c) A contract of insurance that provides for the payment of an annuity for a term dependent on the
continuance of human life.
Notwithstanding anything in this Ordinance to the contrary, the effecting and carrying out of a
contract whose principal object is one of life insurance business, but which contains related and
subsidiary provisions of a non-life insurance nature, shall be taken to constitute the carrying on of life
insurance business.
Notwithstanding anything in this Ordinance to the contrary, the effecting and carrying out of a
contract that provides for the payment of money on the death of a person shall not constitute the
carrying on of life insurance if the contract is effected and carried out by an insurer who is registered
to carry on non-life insurance business; and both of the following conditions exist:
Notwithstanding anything in this Ordinance to the contrary, the effecting and carrying out of a
contract that provides for the payment of money in the event of a person suffering loss, other than
death, attributable to accident, sickness or infirmity shall not constitute the carrying on of life
insurance if the contract is effected and carried out by an insurer who is registered to carry on nonlife insurance business; and by the terms of the contract, the duration of the contract is to be not
more than one year.
“Ordinary life business” means effecting and carrying out contracts of life insurance other than
contracts included in Class 2, Class 3 or Class 4.“pension fund business” means effecting and
carrying out contracts of life insurance that are maintained for the purposes of a pension or
retirement scheme and are owned by trustees under the scheme; and “accident and health
business” means effecting and carrying out contracts of insurance providing fixed pecuniary benefits
or benefits in the nature of indemnity or a combination of both, against risks of the policy holder or a
person for whose benefit the contract was made For the purposes of this Ordinance, the following
shall be the classes of business into which non-life insurance business is divided. “Fire and property
damage business” means effecting and carrying out contracts of insurance against loss to the policy
holder arising from loss of or damage to property, other than as contained in class2. “Marine,
aviation and transport business” means effecting and carrying out contracts of insurance against
loss to the policy holder arising from. “motor third party compulsory business” means effecting and
carrying out contracts of insurance against loss to the policy holder arising from liabilities incurred to
third parties arising out of or in connection with the use of motor vehicles on land, as specified in the
Motor Vehicles Act, 1939 (IV of 1939). “liability business” means effecting and carrying out contracts
of insurance against loss to the policy holder arising from liabilities incurred to third parties, other
than in respect of risks specified in class 2, class 3 or class 5.“Workers’ compensation business”
means effecting and carrying out contracts of insurance against loss to the policy holder arising from
liabilities incurred to workers arising out of or in connection with the employment of the workers by
the insured persons. “accident and health business” means effecting and carrying out contracts of
insurance, the duration of which under the contract is not more than one year, providing fixed
pecuniary benefits or benefits in the nature of indemnity or a combination of both, against risks of the
policy holder or a person for whose benefit the contract was made. “Agriculture insurance” means
effecting and carrying out contracts of insurance against loss to the policyholder arising from loss of
or damage to agriculture related property including crops. “Miscellaneous business” means effecting
and carrying out contracts of insurance of types not included in any other class. “Non-proportional
treaty business” means effecting and carrying out of contracts of treaty reinsurance, not being
contracts of a type included in Class 9.