ISLAMABAD
\nThe Securities and Exchange Commission Policy Board met in Islamabad at the SECP Headquarters under the Chairmanship of Mr. Mehmood Mandviwalla. During the meeting, the Board approved significant amendments to the insurance regulatory framework including the Insurance Rules, 2017, Insurance Accounting Regulations, 2017, and General Takaful Accounting Regulations, 2019.
\nThe amendments are aimed at strengthening the insurance regulatory framework by enhancing industry resilience, addressing key sectoral challenges, diversifying capital sources and streamlining reporting requirements.
\nA key amendment approved relates to increase in the minimum capital requirements for life and non-life insurance companies. Under the revised framework, non-life insurers must maintain a minimum paid-up capital of Rs. 2,000 million, while life insurers are required to meet a threshold of Rs. 3,000 million, with a phased implementation timeline extending until 2030.
\nThis enhanced capital requirement aims to strengthen the industry\u2019s risk absorption capacity, bolster financial stability, and provide greater protection for insurance policyholders.
\nAnother significant amendment introduces an enabling framework for insurance companies to issue subordinated debt instruments and defines its treatment for solvency purposes.
\nThis reform enhances insurers\u2019 financial flexibility by allowing them to explore alternative capital-raising avenues, strengthen their creditworthiness and maintain additional regulatory capital. By expanding access to additional capital, this amendment reinforces the long-term sustainability and resilience of the insurance sector, whilst aligning with SECP\u2019s planned implementation of the Risk-Based Solvency Regime.
\nFurther amendments approved relate to the standardization of recording advance and withholding tax in the financial statements of life insurance companies. Additionally, the amendments address the concerns of the life insurance industry in respect of holding a specified percentage of government securities against advance\/withholding tax, which has been relaxed.
\nIn addition, amendments have been approved to the General Takaful Accounting Regulations, 2019, allowing non-life insurers with substantial Takaful operations to present their complete Takaful results alongside conventional results. Supporting notes will offer a detailed breakdown of both conventional and window Takaful operations, ensuring greater transparency in financial reporting.
\nThis change is designed to provide stakeholders with a clearer understanding of insurers\u2019 financial performance and reinforce confidence in the sector.<\/p>\n","protected":false},"excerpt":{"rendered":"
ISLAMABAD The Securities and Exchange Commission Policy Board met in Islamabad at the SECP Headquarters under the Chairmanship of Mr. Mehmood Mandviwalla. During the meeting, the Board approved significant amendments to the insurance regulatory framework including the Insurance Rules, 2017, Insurance Accounting Regulations, 2017, and General Takaful Accounting Regulations, 2019. The amendments are aimed at […]<\/p>\n","protected":false},"author":2,"featured_media":0,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[5],"tags":[],"class_list":{"0":"post-464453","1":"post","2":"type-post","3":"status-publish","4":"format-standard","6":"category-business"},"yoast_head":"\n