The Pension Insurance Authority (PIA) Acting Registrar and Chief Executive Officer Tresford Chiyavula has said the authority will continue to monitor and scrutinize the operations of all licensed insurance entities.
Mr. Chiyavula said PIA will focus on prudential supervision and market conduct in order to protect the interests of insurance policyholders and pension scheme members.
He told ZANIS in Lusaka today that the PIA will act decisively on misconduct in the pension insurance industry.
“The authority is cautioning unlicensed entities including, insurance companies, brokers and agents to desist from selling insurance policies as it is illegal to engage in or transact in insurance business without a valid licenses issued by the Registrar of Pensions and Insurance as doing so contravenes sections 4, 5, 6, 7, 8 and 9 of the Insurance Act No. 27 of 1997 as amended by Act No. 26 of 2005,” he said.
And Mr. Chiyavula disclosed that in 2018, the authority liquidated two insurance companies.
“The two companies in liquidations affected in excess of 1,800 policyholders under Focus Life Assurance and 780 under A Plus Life Assurance, respectively. The total value of policyholder liabilities is estimated at K7.51 million in respect of Focus Life Assurance and K1.92 million for A Plus Life Assurance,” he explained.
He said the payments to affected policyholders commenced in June 2020 and the liquidator and has so far paid out approximately K680, 000.
Mr. Chiyavula has since called on all affected policyholders that have not yet submitted their details to the liquidator to do so in order to facilitate payments.
“During early 2020, the authority also placed Windsor General Insurance Limited formerly Focus General Insurance Limited under compulsory liquidation. The liquidation manager is currently seeking to dispose the secured assets,’’ he said.
He said the claimants will be advised on the next steps in due course.
As at 28th February, 2021, the PIA has granted licenses to six pension fund administrators and nine pension fund managers.
Mr. Chiyavula noted that the authority has also issued out licenses to 355 insurance entities.
Out of the 355 entities, 30 are insurance companies, 20 general insurance and 10 long-term insurance companies.
The authority has also licensed three reinsurance companies, five reinsurance brokers, 56 brokers, 238 agents and 23 other intermediaries.
Meanwhile, PIA has also disclosed that the financial performance of the pensions and insurance industries has recorded a marginal growth in 2020 largely due to the negative impact of the Covid-19 pandemic on the economy.
Mr. Chiyavula said the pension industry net assets stood at K8.86 billion as at December 2020 compared to K7.96 billion in 2019, translating into an increase of 11.3 percent.
He added that the investment stood at K1.18 billion compared to K805.30 million in 2019, translating into an increase of 47.4 percent.
He attributed the increase mainly to the positive performances of government bonds, collective investment schemes and offshore investments.
Mr. Chiyavula explained that the total pension scheme membership reduced to 111,494 as at 31st December 2020 from 111,959 as at 31st December, 2019, representing a reduction of 0.42 percent.
“The number of active members also stood at 92,454, representing 82 percent of the total membership, while deferred members stood at 5,628, representing five percent of the total membership during the period under review,” he explained.
He said in terms of industry players, there were 244 pension schemes, six fund administrators, and eight fund managers as at the end of the fourth quarter of 2020.
Mr. Chiyavula noted that in the insurance industry, the combined gross written premiums (GWP) for both the long-term and general insurance business contracted by 13 percent to K1.15 billion as at 30th September 2020 from K1.36 billion in the corresponding quarter of 2019.
The GWP for the general Insurance was K720 million while long-term insurance contributed K430 million during the same period.
He said the significant decrease was attributed to the long-term insurance business, and largely arose due to defaults in servicing insurance policies, which can mainly be attributed to the effects of Covid-19 on the economy.
“Net assets in the insurance industry increased by 56.88 percent from K762.38 million in the third quarter of 2019 to K1.19 billion at the end of the third quarter of 2020.
The increase was largely attributed to assets introduced by insurance entities to meet solvency requirements.
He said the pensions and insurance industries were not spared from the negative effects arising from the Covid-19 pandemic.
The pension contributions arrears increased and some insurance classes such as life and travel insurance did not perform to expectations.