The purpose of current study is to evaluate the institutional response of the insurance regulations under Contract Law and compare the data from Europe and Pakistan. To conduct the study, the data was collected through already published annual reports of the insurance companies, and government’s reports regarding how insurance companies had been responding to the consumers during pandemic. The findings revealed that European countries were badly affected by the COVID-19 when compared with Pakistan, therefore the consumers’ requests for reimbursements were high in ratio. This led to the situation where the surplus of the insurance companies ended, and made them unable to serve the consumers as per the Contract Insurance Law. On the contrary, the situation in Pakistan was different, as there are less number of insurers. Thus, the study discusses in details regarding the differences in institutional responses in insurance regulations of the countries, and need for legislative updates.