NEC asked to review life insurance legislation

A submission has been made to the National Executive Council for a review into the life insurance and superannuation legislations.

Bank of PNG Assistant Governor, Ellison Pidik, said the review is to ensure the policies are up-to-date so that the sectors are regulated properly.

He said under the Financial Services Sector Review, a recommendation has been sent to the NEC, through Treasury, for the establishment of a task force to conduct the review.

The review would look at the potential stumbling blocks, potential difficulties as well as provisions in the act that can be amended.

“The review will be for both life insurance and superannuation, as they both go hand in hand,” said Pidik

“Of course life insurance is part of general insurance, but it is closer to superannuation. And that’s why you will see that they are brought together and placed under the central bank’s supervision.

“So there are some mutual ways of operating these two together. For instance, taking up a group life by insurance members. 

“That will be one of the potential reviews that will touch that area. There are any others areas that we’ll look for enhancing the workings for life insurance in Papua New Guinea,” he said.

The Central Bank believes the life insurance industry in PNG has a lot of potential to grow. At the end of 2017, the industry was worth around K500 million.

The Association of Superannuation Funds PNG President and National Superannuation Fund (NASFUND) CEO, Ian Tarutia, has also been calling for a review into the superannuation legislation, which is over 15 years old.

Financial system development manager, George Awap, said the review is part of an innovative drive to move ahead with global best practice.

The Central Bank hopes the review is approved by the NEC.

Cedric Patjole