Missing members: Reinsurance company seeks full-time chairman

Requests commerce ministry for appointment, wants SECP to extend deadline for AGM.

KARACHI:

Pakistan’s only reinsurance company has requested the Ministry of Commerce to appoint a full-time chairman as well as members of its board of directors.

Pakistan Reinsurance Company has sent the ministry a letter, a copy of which is available with The Express Tribune, requesting the federal government to expedite the appointment of its chairman and directors in order to ensure compliance with regulatory requirements.

Established in 1952, Pakistan Reinsurance Company is the country’s only reinsurance organisation. It operates as a public-sector company under the administrative control of the Ministry of Commerce.

Out of the total nine members of the board of directors, seven are nominated by the federal government whereas two members are elected by shareholders. Currently, only four nominated directors and two elected directors serve on the board of the company.

As many as three insurance companies in the public sector have been operating without any of leadership for many months now. These companies include the Pakistan Reinsurance Company, State Life Insurance Corporation and National Insurance Corporation.

Speaking to The Express Tribune on Thursday, an official of Pakistan Reinsurance Company confirmed that the company has written to the Ministry of Commerce several times in the recent past, requesting it to fulfil regulatory requirements by filling vacant positions on the board.

The government holds a 51% stake in Pakistan Reinsurance Company while 49% shares are held by the private sector. The company is listed on the bourse. According to the letter, further delaying the appointment of the company’s chairman may involve the risk of a drop in its share price.

The closing price of Pakistan Reinsurance Company’s stock on Thursday was Rs32.46 compared with the price of Rs29.24 a share one month ago.

Meanwhile, Pakistan Reinsurance Company has asked the Securities and Exchange Commission of Pakistan (SECP) for the extension of the deadline for holding the annual general meeting (AGM) for 2013 by one month.

The company is required to hold its AGM by April 30 every year under the law. However, it has sought the permission to hold the AGM by May 31 this year, saying its accounts incorporate a significant portion of business on the basis of the quarterly returns received from all insurance companies.

In accordance with the rules prescribed by the Ministry of Commerce, insurance companies are required to submit their returns within one month of the close of the financial year.

The accounting year end of ceding insurance companies and that of Pakistan Reinsurance Company is the same i.e. December 31. Many ceding insurance companies are busy in finalising their accounts, Pakistan Reinsurance Company said, which means the reinsurer will need more time for the identification of reconciliation differences.

Published in The Express Tribune, April 4^th, 2014.

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