Fourth Schedule – Insurance business
Rules for computing the profits of life and non-life insurers: life insurance profits are computed separately, based on the actuarially advised surplus.
Who it applies to
Insurance and takaful companies
Structure and contents
| Part / area | What it covers |
|---|---|
| Life insurance | Profit = current year's surplus appropriated to profit and loss under the Insurance Ordinance 2000, as advised by the Appointed Actuary, with specified adjustments |
| Other business | Profit or loss before tax as per the accounts prepared under the Insurance Ordinance |
| Adjustments | Amounts paid or reserved for policyholders are allowed; investment gains and losses go into the surplus; the Commissioner can adjust artificial reserves after consulting SECP |
How it works in practice
Applies only to insurers and takaful operators. Reconcile the actuarial surplus to the accounts and apply the Schedule's add-backs.