By Our Correspondent
LAHORE – Crescent Star Insurance Limited (CSIL) has officially resumed its guarantee business after the Honourable Islamabad High Court nullified the Securities and Exchange Commission of Pakistan’s (SECP) directive that had previously barred the company from issuing fresh guarantees.
The SECP’s order, dated November 5, 2024, was challenged by CSIL, and in a significant ruling on July 29, 2025, Honourable Mr. Justice Mohsin Akhtar Kayani declared the directive unlawful. The Court held that the SECP had acted beyond its lawful authority and had failed to comply with the procedural requirements laid out in the Insurance Ordinance, 2000. Specifically, the Court noted that the Commission had not followed Sections 62 and 63, which obligate the regulator to give an insurer a fair chance to address alleged violations through a compliance plan before taking coercive steps.
CSIL argued that its guarantee business falls under Class VI—Credit and Suretyship—within the scope of non-life insurance and is operated using valid facultative reinsurance arrangements. The Court recognized this model, explaining that facultative reinsurance allows insurers to evaluate and accept risks individually and that there is no legal requirement to obtain additional reinsurance. The Court also emphasized that such business decisions are at the discretion of the insurer based on its own risk appetite, operational needs, and strategy.
Importantly, the Court highlighted that no complaints were filed by any policyholders and concluded that the SECP’s actions were excessive and lacked jurisdiction. The writ petition filed by CSIL was allowed, and SECP was directed to proceed according to the law in its future dealings with the company.
A spokesperson for Crescent Star Insurance welcomed the verdict, stating:
“We welcome the Court’s decision, which reaffirms the importance of due process and regulatory accountability. Crescent Star Insurance remains fully committed to compliance, transparency, and the protection of our policyholders’ interests. We extend our sincere thanks to our clients, stakeholders, and partners for their continued trust and support throughout this period. The company is now focused on restoring full operations and continuing to play its part in facilitating business and economic activity across Pakistan.”
CSIL also expressed its gratitude to its legal counsel—Syed Ahmed Hassan Khan of Hassan, Kaunain & Nafees – Legal Practitioners & Advisors, and Saadat Ali Saeed of AHM & Co.—for their expert representation in the case before the Islamabad High Court.
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