SECP Asks Insurance Companies to Outsource Their Internal Audits to Professional Audit Firms

The Securities and Exchange Commission of Pakistan has further tightened regulations for the insurance companies and directed them to outsource their internal audit function to any professional services firm.

On Wednesday, the SECP has issued S.R.O. 1085 (I)/2020 to introduce the draft amendments to the Code of Corporate Governance for Insurers, 2016.

Under the revised regulations, the internal audit function, wholly or partially, may be outsourced by the insurer to a professional services firm and in lieu of outsourcing, the insurer shall appoint or designate a full-time employee other than the chief financial officer or an employee directly reporting to the chief financial officer, as head of internal audit holding equivalent qualification prescribed under this code, to act as a coordinator between firm providing internal audit services and the Board: Provided that while outsourcing the function, the insurer shall not appoint its existing external auditors or any of its associated company or associated undertaking, as internal auditors.