By Bernard Mpofu, HARARE, March 17 (The Source) – Zimbabwe’s insurance regulator has suspended short-term insurer Global Insurance from underwriting new business due to a weak capital position.
The Insurance and Pension Commission (IPEC) said it had carried out an onsite inspection and resolved to suspend the company. According to its third quarter report for the period ending September 30, Global’s core capital stood at $662,000 against a minimum requirement of $1,5 million.
In 2013, the regulator doubled the minimum capital requirements for the sector, with short-term insurers required to achieve a minimum capital level of $1,5 million and life assurers having to put up $2 million. Companies were required to have complied by last September.
“Following the conduct of an on-site inspection …, the commission hereby advises that Global Insurance Company Limited has, with immediate effect, been suspended from initiating and renewing insurance business,” said IPEC commissioner Manette Mpofu in a letter dated March 13.
“The regulatory measure has been taken in terms of section 67(3) of the Insurance Act [Chapter 24:07], taking cognizance of the glaring shortcomings noted in the inspection, in a bid to protect policyholders. Meanwhile, we request that you withhold all the funds due to Global Insurance Company Limited from the pools administered by your association which include the Motor Insurance Pool, pending further instructions.”
Last year IPEC, which is yet to release the year-end report for the sector, told The Source that eight short-term insurers – about a third of the companies — and one life assurance company failed to meet minimum capital thresholds by the June 30 deadline, reflecting a struggling industry amid an economic slowdown.
The regulator has, since dollarisation in 2009, deregistered several insurers which include Agricultural Insurance Company, Altfin, Jupiter Insurance Company, SFG Insurance Company and Suremed Health Insurance Company.