SECP suspends insurance firm’s guarantee business

The Securities and Exchange Commission of Pakistan (SECP) has suspended the guarantee business of United Insurance Company of Pakistan Limited, prohibiting the company from issuing new guarantees or renewing existing ones. The decision was taken following a show-cause notice served on the company. United Insurance had obtained a stay order from the Lahore High Court on Feb 21 last year. However, on April 10 this year, the court dismissed the petition filed by United Insurance, deeming it without merit. United Insurance had deliberately refused to encash called guarantees on various pretexts over time, resulting in the accumulation of guarantees amounting to Rs2.2 billion by December 2023.