KARACHI: The Securities and Exchange Commission of Pakistan (SECP) has directed the State Life Insurance Corporation of Pakistan (SLIC) to disclose age-wise analysis of unclaimed insurance benefits in its financial statements with immediate effect.
The SECP also strictly warned the corporation to be careful in future and comply with the requirement of Circular II of 2014. The SECP initiated proceedings against SLIC and its directors, for alleged contravention of Circular II of 2014, Section 156 of the Insurance Ordinance, 2000. During examination of the financial statements for the period ending December 31, 2015, the SECP had observed that SLIC did not disclose the age-wise break- up of the unclaimed insurance benefits in its financial statements as per requirement of clause 2 of Circular 11 of 2014.
As a result, the SECP advised SLIC to provide age-wise break-up of outstanding claims amounting to Rs 17. 9 billion along with names of the claimants/ policyholders and the dates since the said claims were outstanding. However, SLIC only submitted the partial detail and did not provide the other information i.e. names of the policyholders/ claimants along with the dates since the said claims were outstanding. Furthermore, SLIC did not disclose the list of policyholders’ names on its website; instead, it only provided the search option by policy number.
On failing to comply with the legal requirements, the show cause notice was issued to SLIC by SECP while hearing in this regard was held in February 2017, where lzqar Khan, Muhammad Rashid, Muhammad Faisal and Waqas Asad Sheikh represented SLIC. In the hearing, the SLIC said that unclaimed insurance benefits were being reported in actuarial reserves and SLIC was exempted to disclose age-wise analysis of the said benefits in the financial statements. They were of the view that disclosing age-wise break-up in financial statements would not be beneficial to the policyholders and would result in tax implications for the SLIC.
However, the SECP’s Commissioner Fida Hussain Samoo said that SLIC in not exempt from disclosing age-wise analysis of unclaimed insurance benefits in the financial statements and he advised SLIC to comply with the legal requirement.
Published in Daily Times, September 8th 2017.
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