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RULES, 2015

SMALL DISPUTE RESOLUTION COMMITTEES (CONSTITUTION AND PROCEDURE) RULES, 2015

[Gazette of Pakistan, Extraordinary, Part-II, 5th June, 2015]

S.R.O. 545(I)/2015, dated 3.6.2015.–In exercise of the powers conferred by Section 117 and sub-section (2) of Section 167 of the Insurance Ordinance (XXXIX of 2000), read with S.R.O. 708(I)/2009 dated 27th July 2009, and in supersession of S.R.O. 417(I)/2005 dated 11th May 2005 and Notification No. 2(19)/97-Ins.II dated 16th December 2006, the following draft rules are hereby published by the Commission for information of all persons likely to be effected thereby and notice is hereby given that objections and suggestions, if any, received by the Securities and Exchange Commission of Pakistan within the thirty days of the publication of this notification, will be taken into consideration.

CHAPTER I

SHORT TITLE, COMMENCEMENT AND DEFINITIONS

1.       Short Title and Commencement.–(1) These Rules shall be called the “Small Dispute Resolution Committees (Constitution and Procedure) Rules, 2015.

(2) These Rules shall come into force at once.

2.       Definitions.–(1) In these Rules, unless there is anything repugnant in the subject or context,–

(a)     “Act” means the Securities and Exchange Commission of Pakistan Act, 1997;

(b)     “Commission” means the Securities and Exchange Commission of Pakistan constituted under Section 3 of the SECP Act, 1997;

(c)     “Committee” means the Small Dispute Resolution Committee constituted under the provisions of these Rules;

(d)     “Member” means a natural person appointed as member of the Small Dispute Resolution Committee to take part in the dispute resolution process for a particular dispute;

(e)     “Ordinance” means the Insurance Ordinance, 2000 (Ordinance No. XXXIX of 2000);

(2)  The words and expressions used but not defined shall have the same meaning as assigned to them in the Ordinance.

CHAPTER 2

CONSTITUTION AND COMPOSITION OF SMALL DISPUTE RESOLUTION COMMITTEES

3.       Constitution of the Committees.–(1) The Committees shall be constituted at the following places:

(a)     Islamabad;

(b)     Lahore;

(c)     Karachi; and

(d)     Such other places as may be specified by the Commission through notification in the official gazette.

(2)  Each Committee shall establish its own secretariat to be situated in the city or place at which it is constituted in pursuance of sub-rule (1), and the amount prescribed by the Commission shall be paid to the Committee to meet its expenses.

4.       Composition of the Committee.–(1) Each Committee shall comprise of the following individuals to act as members of the Committees:–

(a)     an Advocate as defined under clause (a) of Section 2 of the Legal Practitioners and Bar Councils Act, 1973 (Act No. XXXV of 1973);

(b)     a chartered accountant as defined under clause (b) of Section 2 of the Chartered Accountants Ordinance, 1961 (Ordinance No. X of 1961) or a cost and management accountant as defined under clause (a) of sub-section (1) of Section 2 of the Cost and Management Accountants Act, 1966 (XIV of 1966);

(c)     an individual from the insurance industry of Pakistan; and

(d)     any other person deemed appropriate by the Commission:

          Provided that on the basis of any special reason, the Commission may reduce or increase the number of members for a Committee as may be specified through a notification in the official gazette.

CHAPTER 3

JURISDICTION OF THE COMMITTEE AND ADMISSION OF DISPUTES

5.       Committee to arbitrate certain disputes.–The Committee shall have the authority to arbitrate disputes having pecuniary limits given in the following table:

Nature of the Underlying Insurance Policy

Maximum Sum Insured

Individual life contract

Rupees One Million Only.

Domestic insurance policy

Rupees Two Million Only.

Private motor insurance policy

Rupees One Million Only.

6.  Reporting of the disputes to the Committee.–A policyholder having a dispute with an insurer shall make an application to the Committee, at the respective secretariat, in the Form annexed with these rules, for registration of the dispute and the Committee shall register the same subject to the compliance of requirement of Rule 5.

CHAPTER 4

DISPUTE RESOLUTION PROCESS

7.       Power of the Committee to call for written submissions from the parties.–(1) The Committee shall have the power to call for written submissions from the parties to the dispute.

(2)     Any request for calling the written submissions from the parties shall be made through a notice, in writing:

Provided that any notice issued to call for written submissions from the parties to the dispute shall allow a timeframe of not less than fourteen days from the date of its dispatch to the parties for submission of their written statements.

(3)     The parties shall be bound to provide their written submissions, if any, to the Committee within the allowed timeframe, unless there is any reasonable ground hampering the compliance of the notice.

8.       Power of the Committee to obtain opinion from the experts and professionals.–(1) The Committee may, if deemed appropriate, may call for opinion from the experts and professionals in order to resolve any dispute.

(2)  Any request for calling the opinion from the experts and professionals shall be made in writing.

9.       Power of the Committee to call the parties for hearing.–(1) The Committee shall have the power to call the parties to the dispute for hearing, who shall be bound to appear in person before the Committee.

(2)  The Committee shall cause a hearing notice in the name of any or both the parties to the dispute, as the case may be.

10.     Committee to prefer amicable resolution of the disputes through negotiation, mediation, conciliation and arbitration.–The Committee shall, at all times, prefer amicable resolution of the disputes through negotiation, mediation, conciliation and arbitration.

11.     Committee to resolve dispute within certain timeframe.–(1) The Committee shall resolve a particular dispute within a period of thirty days.

(2)  If in a particular dispute, opinions from experts and professionals is obtained or intended to be obtained, in exercise of the powers given under these rules to the Committee, the timeframe given under sub-rule (1) of this rule shall be extended for such additional period as may be required by the Committee to obtain such opinions.

12.  Decision of the Committee.–(1) Subject to Rule 10 and Rule 11, the Committee shall communicate its decision, in writing, to each party to the dispute, resolved or arbitrated by the Committee.

(2)     The Committee shall also file a copy of its decision to the Commission, on the same day on which such decision is taken by the Committee.

(3)     Each decision of the Committee should be speaking and complete, that is to say that the decision should contain all relevant grounds, arguments and facts and findings of a particular case along with the rationale for the decision so taken.