ISLAMABAD: Every insurance company will issue an employees trading policy governing trading or investment in securities by its employees, their spouse and dependent children to check ‘insider trading’.

The SECP on Friday issued S.R.O.1013(I)/2022 to make some key changes in the Code of Corporate Governance for Insurers, 2016.

The SECP has also introduced a new section, ie, “Trading by Employees” in the amended Code of Corporate Governance for Insurers, 2016. Under the amended code, the insurer shall have a board of directors approved employees trading policy governing trading or investment in securities by its employees, their spouse and dependent children to ensure compliance with regulatory requirements governing prohibition of insider trading. Such policies shall at least cover disclosure requirements, retention of records and stringent requirement for personnel involved in investment decision function or process.

The internal audit function, wholly or partially, may be outsourced by the insurer to a professional services firm or be performed by the internal audit staff of the holding company and in lieu of outsourcing, the insurer shall appoint or designate a full-time employee other than 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.

SECP notifies amendments to Insurance Companies Regulations

The head of internal audit shall functionally report to the audit committee and administratively to the chief executive officer, SECP added.

Under the revised Code, all board committees of an insurer, except the Audit Committee, shall meet at least twice in a year. The proceedings of the meetings of all committees (whether management committees or the Board committees) shall be recorded and be kept at the insurer’s head office. Each committee of an insurer shall appoint a secretary of the Committee. The secretary shall circulate minutes of meetings of the relevant Committee to all members, directors and, if necessary, the Chief Financial Officer within a fortnight, SECP added.

Copyright Business Recorder, 2022