November 07, 2023 (MLN): The Securities and Exchange Commission of Pakistan (SECP), to provide the manner of recording advance/withholding tax in the books of life insurance companies has proposed amendments in the regulatory framework for insurance companies.
These amendments also facilitate the proper management of investments in government securities by life insurance companies
According to a press release issued by the regulatory body today, the SRO 1514(I)/2023 and SRO 1516(I)/2023, proposing amendments to the Insurance Rules, 2017 and the Insurance Accounting Regulations, 2017, respectively, have been placed on SECP’s website.
As per the existing framework, life insurance companies are required to hold a specified percentage of government securities against the advance/withholding tax, which has an impact on the liquidity position of insurance companies.
The proposed amendments aim to ease the burden on life insurance companies through the withdrawal of the requirements of holding a specified percentage of government securities against the advance/withholding tax.
Moreover, these amendments will also bring standardization to the procedure for recording advance /withholding tax.
