SECP proposes amendments for enhanced takaful financial reporting

The Securities and Exchange Commission of Pakistan (SECP) has introduced proposed amendments to the General Takaful Accounting Regulations, 2019. The amendments aim to enhance transparency in financial reporting for non-life insurers involved in takaful operations.

Currently, non-life insurers are required to present their takaful results as a single line item in their financial statements, regardless of the scale of their takaful activities. The proposed changes, outlined in SRO 569(I)/2024 and available for public review on SECP’s website, suggest that insurers should disclose their complete takaful revenues separately.

To ensure comprehensive disclosure, the draft amendments recommend that financial statements include detailed breakdowns of both conventional and window takaful operations. Stakeholders and interested parties are encouraged to submit their feedback to the Director of the Insurance Division at SECP's office in Islamabad within thirty days of the SRO's issuance.

This move towards greater transparency in financial reporting is expected to benefit insurance companies by providing a clearer picture of their takaful operations and results. By allowing for separate reporting of takaful revenues, the proposed amendments seek to align with international best practices in financial disclosure.