KARACHI: The Pakistan Re-insurance Company Limited (PRICL), a state-controlled entity, has estimated the local insurance market has crossed the mark of Rs25 billion.

In 2006, the company said, total amount of gross premium of the insurance industry was Rs25 billion. Of this amount, the share of Pakistan Re-insurance stood at Rs4,499 million or 18 per cent. Meanwhile, the external auditors of the company have qualified its accounts on six counts. The first one was related to the amount of Rs412.12 million due to other persons and bodies carrying out insurance business.

The second was related to Rs348 million due to and due from other persons and bodies carrying out insurance business.

But the re-insurance company was of the view that these balances had not yet been agreed and settled with the insurance companies.

The company said it was in the process of getting confirmation and reconciling balances with various insurance companies.

Consequently, the impact of possible adjustment on these balances and profit and loss account could not be quantified.

The third type of balance was related to the amount of Rs879.6 million due from other persons and bodies carrying out insurance business.

The fourth type of balance was related to the amount of Rs26 million in premium and claim reserves retained from the ‘retrocessionaires’.

The fifth one pertained to Rs32.7 million worth of premium and claim reserves retained by the ‘cedants’.

The external auditors said “appropriate documentation for substantiating these claims was not provided (by the management).

The ‘disputed’ balances could not be quantified and consequently we (the auditors) are unable to verify these balances.

“Respective insurance companies have not confirmed the balances, consequently we (auditors) are unable to verify these balances.”

The Pak Re-insurance Co has made provisions of Rs669 million during the last two years on account of amount due from other persons and bodies carrying out insurance business.