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Alba Iulia
Wednesday, January 29, 2020

Five insurance firms face liquidation after failing to raise minimum capital

Economy Five insurance firms face liquidation after failing to raise minimum capital

Five insurance firms could be liquidated for failing to raise the minimum capital.

Pensions and Insurance Authority -PIA- which regulates insurance firms says the five firms where given a grace period to meet statutory regulations with regard to minimum capital for insurance companies.

Public Relations manager Doreen Silungwe says December 31,2017 was the deadline for raising the required minimum capital.

She says only 32 insurance companies out of 37 managed to meet the deadline.

Ms. Silungwe says of the five firms who have failed to raise the minimum capital four are general insurance companies and the fifth one is a long-term insurance company.

And PIA Registrar Martin Libinga says the five firms are not allowed to take on any new business but must conclude matters still on their books.

He told ZNBC that the regulator will take further assessment on the future of the five firms and appropriate action will be taken in due course.

In 2015, Government signed Statutory Instrument (SI) number 71 to compel insurance companies increase their paid-up capital to the minimum of K20 million from K1 million, long-term and general insurers to K12 million and K10 million respectively from K1 million , while for brokers it stands at K100,000 from K50,000.

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  1. You can’t say that only 32 out of 37 made it when the response is over 85%. If it was five who had made it out of 37 the sentence would have been appropriate.

  2. Imagine you pay your premiums. A major natural catastrophe occurs, and many people go and claim for insurance benefits

    However in the face of so many claims, the insurance companies close, leaving people stranded.

    This is the rationale for the imposition of minimum capital levels that insurance companies must raise from their shareholders, before they are allowed to start business

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