Union Insurance Co. Ltd. received a qualified audit opinion for 2025 after its auditor flagged weaknesses in claim approval and recording processes, along with uncertainties over tax liabilities and inter-insurance balances.
The auditor also included an “Emphasis of Matter” paragraph in the audit report for the year ended 31 December 2025.
According to the audit findings, claim liabilities involving amounts due or intimated by policyholders relied heavily on management judgment and carried risks of understatement.
While reviewing claims paid during the year and outstanding claims as of 31 December 2025, the auditor observed variances and control lapses in the approval and recording process.
The auditor also said closing balances of “amount due to other bodies carrying on insurance business” and “amount due from other bodies carrying on insurance business” could not be independently confirmed.
The audit report further flagged issues relating to income tax and deferred tax provisions.
According to the auditor, provisions for income tax and deferred tax are required to be maintained under International Accounting Standard 12, commonly known as IAS 12, which governs accounting treatment for tax obligations.
However, the auditor observed variances while verifying tax-related provisions and expenses.
The report also stated that tax assessment orders remained pending or under appeal for many years, making it difficult to confirm potential additional tax liabilities.
The audit report was signed by FAMES & R Chartered Accountants Partner Fouzia Haque.
