Staff Writer
First Mutual Holdings Limited (FMHL) says it has been granted approval by the ZSE for a further extension of the deadline for the publication of the audited financial statements for the year ended 31 December 2024.
The group said the delay in publication has arisen as the company is currently working with its auditors to finalise outstanding audit opinions for the financial years 2021 to 2024 pending the conclusion of the forensic audit conducted by the Insurance and Pensions Commission (IPEC) and subsequent settlement agreement.
“FMHL remains committed to ensuring compliance with regulatory requirements and will keep shareholders and stakeholders informed of any further developments,” the group said in a statement.
The information is that First Mutual Life Assurance Company (FML), a subsidiary of FMHL, in 2022 was subjected to a forensic audit by the Insurance and Pensions Commission (IPEC).
The audit, following an asset separation exercise, investigated potential breaches of compliance and the impact on policyholders.
The audit revealed that FML had not properly separated assets between the policyholders and shareholders, potentially leading to losses for policyholders.
However, FMHL disagreed with the findings in the BDO Chartered Accountants (BDO) report and the Insurance and Pensions Commission (IPEC) corrective order on asset separation.
The financial services group argued its submissions were not properly considered.
FML received a corrective order from IPEC, which is based on the findings of the forensic auditor, BDO, and directed FML’s shareholders to pay significant sums in Zimbabwe dollars and US dollars to the policyholders in respect of perceived actual and potential losses, as recommended by BDO.
According to IPEC, the asset separation exercise was necessitated by the notable non-compliance by several insurance companies against the aforementioned legal requirements, which had the potential to prejudice policyholders in favour of shareholders.
Concerning FML, the assessment done by IPEC was to verify the extent to which FML complied with the provisions on asset separation, which the regulator said warranted an in-depth investigation.
The objective of the asset separation exercise is to enforce compliance with the requirements of the new industry legal provisions.
The exercise was done to identify assets that may have been misappropriated from policyholders to shareholders or vice versa, quantify the assets that may have been misallocated and apportion them to their rightful owners, and enhance compliance with the legal requirements for asset separation as a way of improving good governance in the insurance and pension sectors.
