UNITED INSURANCE COMPANY LIMITED vs The DIRECTOR/HOD, ADJUDICATION-I, ADJUDICATION DIVISION, SECURITIES AND EX

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UNITED INSURANCE COMPANY LIMITED VS The DIRECTOR/HOD, ADJUDICATION-I, ADJUDICATION DIVISION, SECURITIES AND EXCHANGE COMMISSION OF PAKISTAN, ISLAMABAD Ss.32(2)(g) & 32(7)---admissible assets---"Related parties"---Receivables from such entities---Calculation of solvency, non-admissibility of---Misreporting of financial facts---Effect---appellant (Insurance Company) was penalized by the Securities and Exchange Commission of Pakistan ('Commission') for misreporting regarding admissible assets---Validity---Section 32(2)(g) of the Insurance Ordinance, 2000, stipulates that receivables from "related parties" cannot be admitted as admissible assets while calculating the solvency, and criteria to establish the 'related parties" status has been provided in S. 32(7) of the Insurance Ordinance, 2000---Keeping in view the said both provisions, the Respondent / Commission had adequately and reasonably adjudged in the impugned order that the inclusion of receivables from "related parties "as an admissible asset for solvency calculation was a violation of S. 32(2)(g) of the Insurance Ordinance, 2000---Notably, in the impugned order, the Respondent had established that the appellant and concerned banking company were "related parties" in terms of S. 32(7) of the Insurance Ordinance because in both companies, shareholding of the appellant exceeded 49%---Thus, the Respondent had adequately explained that two companies-in-questions had an effective shareholding of 87.79% and 67.75% in the appellant and Banking Company, therefore, both companies were "related parties " in terms of S. 32(7) of the Insurance Ordinance, 2000---On the same premise, the Respondent had established the "related party" status of the appellant with two companies/entities-in-question, therefore, receivables from such entities were also not admissible for calculation of solvency---Misreporting of financial facts was a serious violation and the misreporting of admissible assets by the appellant for calculation of solvency had been duly established by the Respondent which included "related party" receivables while calculating solvency---appeal, filed by Insurance Company, was dismissed.

UNITED INSURANCE COMPANY LIMITED vs The DIRECTOR/HOD, ADJUDICATION-I, ADJUDICATION DIVISION, SECURITIES AND EXCHANGE COMMISSION OF PAKISTAN, ISLAMABAD Ss — 2025 CLD 903 SECURITIES-AND-EXCHANGE-COMMISSION-OF-PAKISTAN

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