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  • Invitation: East Asian Insurance Congress (EAIC) Hong Kong Conference, 24-27 September 2024

    The 30th East Asian Insurance Congress to be held in Hong Kong on the 24th to the 27th of September 2024 is just around the corner. This highly anticipated gathering is set to be one of the standout highlights of the industry in 2024. Registration is now open so make sure you secure your spot and enjoy our early-bird offer which runs through 21 June 2024. Don’t miss the opportunity to: • Foster valuable connections and explore potential collaborations with industry peers. • Immerse yourself in cutting-edge knowledge and gain exclusive insights from esteemed industry experts and thought leaders. For the latest updates and further details about the conference, please visit the official EAIC website https://eaic2024.hk We look forward to seeing you in Hong Kong and sharing a wonderful experience together.

  • 15th ASEAN School for Young Insurance Managers 2024

    The ASEAN School for Young Insurance Managers (AYIM) is an initiative by the ASEAN Insurance Education Committee aimed at nurturing promising young insurance managers from ASEAN countries. This program is crafted to transform these high-potential individuals into well-rounded leaders who possess a comprehensive understanding of management basics and a wide-ranging market perspective. It prepares them to take on the multifaceted roles required to leaders within their companies and the broader industry. Download the eBrochure. For more information, you may visit: www.scicollege.org.sg/AYIM2024

  • Insurers Face Crisis with Hundreds of Billions in Corporate Tax Increases

    This year, insurers are facing a crisis where they may have to pay hundreds of billions of won more in corporate taxes compared to the previous year due to the adoption of the new accounting standard, IFRS 17, which has been in place for just two years. Since the introduction of IFRS 17, the amount of cash surrender reserves recognized as expenses has surged annually by trillions of won. As a result, there are discussions about lowering the reserve accumulation amount compared to the current level. While cash surrender reserves are originally excluded from taxation as they represent liabilities that must be returned to policyholders upon contract termination, the sudden increase in reserve size has prompted calls for regulatory improvements. According to the insurance industry on May 2, the National Tax Service began investigating the reasons why corporate tax revenues did not increase despite insurers recording their highest-ever net profits after the introduction of IFRS 17. In the first year of implementing IFRS 17 last year, insurers accumulated a net profit of 13 trillion won. One of the reasons cited for the lack of tax revenue growth compared to net profits is the significant increase in cash surrender reserves last year. Cash surrender reserves are funds set aside to refund policyholders in the event of contract termination, as required by commercial law to protect policyholders. Historically, they were not subject to taxation as they were categorized as liabilities, reflecting the obligation to repay policyholders at some point in the future. However, the situation has become more complex with the adoption of IFRS 17, which assesses liabilities at market value. This is because the reserves calculated under the new accounting standard have decreased compared to those under the previous accounting standard, IFRS 4. To address potential shortages in funds for future repayments to policyholders, financial authorities have instructed that the difference between the amounts calculated under IFRS 17 and IFRS 4 should be accumulated below the accumulated earnings of the capital item, specifically earmarked for cash surrender reserves. This measure aims to ensure compliance with the new accounting standards while fulfilling the legal obligation to protect policyholders under commercial law. Additionally, tax authorities revised tax laws in 2022 to exclude these reserves from taxation. However, the cash surrender reserves included as deductible expenses under tax laws snowballed last year. Annual increases of over 1 trillion won per insurance company are notable. By life insurance company, Shinhan Life exceeded 3 trillion won, with 3.45 trillion won as of the end of last year, followed by Hanwha Life with 2.5 trillion won and NH Nonghyup Life with 1.95 trillion won. In the non-life insurance sector, Hyundai Marine & Fire Insurance recorded the highest amount at 3.42 trillion won, followed by KB Insurance with 2.79 trillion won, DB Insurance with 2.65 trillion won, and Samsung Fire & Marine Insurance with 1.18 trillion won. If a corporate tax rate of 26.5 percent was applied to the cash surrender reserves, insurers would potentially owe hundreds of billions of won more in taxes this year, based on the current accounting year. However, direct taxation is difficult without amending the law, given that the reserves were recognized as expenses under tax laws in 2022. Instead of amending the law, there is practical discussion within financial authorities about revising supervisory regulations to lower the accumulation rate of cash surrender reserves. Lowering the accumulation rate would reduce the reserves but increase taxable income under tax laws, thereby enabling tax revenue to be secured. The controversy is expected to persist. As insurers face a sharp increase in corporate tax burdens, there is concern that the fundamental principle of protecting policyholders under commercial law could be significantly undermined. When IFRS 17 was introduced, cash surrender reserves were not only excluded from taxation but also excluded from distributable profits by financial authorities, all in the interest of policyholder protection. In response, the insurance industry has mobilized task forces (TFs) to devise strategies to address these challenges. Source: businesskorea.co.kr

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Other Pages (54)

  • EVENTS | PIRA, Inc.

    GATHERINGS AND EVENTS Mar 26 PHILIPPINE INSURANCE SUMMIT 2024 The Insurance Institute for Asia and the Pacific, Inc. (IIAP), in collaboration with the Philippine Insurers and Reinsurers Association... 1 2 3 4 5 COMBINED COMMITTEE CHRISTMAS PARTY The City Club, Makati December 19, 2023 PHILIPPINE INSURANCE CUP Riviera Golf Club Silang, Cavite August 10, 2023 INSURANCE CONSCIOUSNESS WEEK Various October 16-21, 2022 46TH ASEAN INSURANCE COUNCIL MEETING Virtual October 2020 PIRA GOLF TOURNAMENT Riviera Golf Club Silang, Cavite June 14, 2019 PIRA-IUMI Maritime Insurance Conference 2023 Makati Diamond Residences October 26, 2023 JOINT COMMITTEE CHRISTMAS PARTY The City Club, Makati December 20, 2022 2ND INSURANCE COMMISSIONER'S CUP Canlubang Golf and Country Club July 29, 2022 PHILIPPINE INSURTECH CONFERENCE Makati Diamond Residences September 12, 2019

  • NEWS | PIRA, Inc.

    PIRA Updates DATE DESCRIPTION May 8-9 DOJ-Office for Competition Sectoral Consultative Workshop on Competition Enforcement, Consumer Protection and Regulatory Efficiency (NCR Leg). April 26 DENR Forum on the Blue Economy. April 5 Launch of the 3rd National Risk Assessment (NRA) on Money Laundering and Terrorism Financing. March 28 Global Online Summit on Extreme Heat hosted by United States Agency for International Development (USAID) and the International Federation of Red Cross and Red Crescent Societies (IFRC). March 25-26 ADB Conference on Insurance Complementation. March 21 Courtesy call of FALIA officers (The Foundation for the Advancement of Life & Insurance Around the World). March 21 7th Technical Working Group (TWG) Meeting on PIFITA. March 21 Meeting with Diligent, a global platform provider that supports corporate governance, ESG, GRC and corporate board effectiveness for a large number of clients worldwide, including the Philippines. March 14 IC Orientation/Briefing on PFRS17 Reporting and Draft IC CL Guidelines on Electronic Submission of 2023 AS and AFS. March 13 Online briefing conducted by NatRe for PIRA members on the Simplified PCIF1 scheme. March 11 Face-to-face meeting of the Bidding Committee on PIRA Project: Actuarial Study on Premium Rates/Tariff for Fire & Surety Business and Repository of Industry Data to formally open all submitted bids. March 7 Meeting with the IC Commissioner re. PIRA as a rating organization. March 6 BDB Law exclusive webinar on Ease of Paying Taxes (EOPT) and RMC 5-2024. Industry News 23 hours ago 15th ASEAN School for Young Insurance Managers 2024 The ASEAN School for Young Insurance Managers (AYIM) is an initiative by the ASEAN Insurance Education Committee aimed at nurturing... 23 hours ago Insurers Face Crisis with Hundreds of Billions in Corporate Tax Increases This year, insurers are facing a crisis where they may have to pay hundreds of billions of won more in corporate taxes compared to the... 1 day ago Regulator and general insurers launch database to promote industry developments Thailand's insurance regulator, the Office of Insurance Commission (OIC), has launched an insurance database system (IBS) in... 7 days ago More focus expected on profitability in the short term in P&C reinsurance sector - Hanover Re Over the medium to long term, substantial growth in the property and casualty reinsurance in the APAC region continues to be anticipated,... May 9 Insurance regulator signs free legal aid agreement with bar association The Insurance Commission (IC) and the Integrated Bar of the Philippines (IBP), the national organisation of lawyers, have signed an... May 7 Announcement: Reynaldo A. De Dios Departs from Insurance Industry The Philippine Insurers and Reinsurers Association, Inc. is sad to announce the passing of Mr. Reynaldo A. De Dios last Sunday May 05,... 1 2 3 4 5 Articles May 2024 (11) 11 posts April 2024 (19) 19 posts March 2024 (17) 17 posts February 2024 (11) 11 posts January 2024 (9) 9 posts December 2023 (22) 22 posts November 2023 (24) 24 posts October 2023 (13) 13 posts September 2023 (20) 20 posts August 2023 (26) 26 posts News Archive

  • PIRA, Inc.

    PIRA Updates Read More PIRA celebrates its 70th Anniversary 1954 - 2024 Read More PIRA Member Companies To play, press and hold the enter key. To stop, release the enter key. Full list of members, click here .

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