First Mutual Holdings cautions shareholders
Staff Writer
First Mutual Holdings (FMHL) says corrective measures being instituted on its subsidiary First Mutual Life as part of the ongoing forensic audit by the Insurance and Pensions Commission (IPEC) will have a material impact on the price of the company’s shares.
On April 5, 2022, stakeholders were advised that the Insurance and Pensions Commission intended to perform a forensic investigation on First Mutual Life Assurance Company (FML), a subsidiary of First Mutual Holdings Limited, arising from the asset separation exercise initiated by IPEC.
In a statement, FMHL said the investigation was completed in February 2023, and the report was submitted to the Minister of Finance, Economic Development, and Investment Promotion in accordance with Section 67 of the Insurance Act [Chapter 24:07].
“In line with the Act, FML submitted representations on the contents of the report to the Minister on June 8, 2023. On December 21, 2023, FML received a response from IPEC indicating that the Commission was mandated by the Minister to institute corrective measures.
“The corrective order issued by IPEC is receiving due attention from the FML Board and management,” the statement read.
According to Ipec, the asset separation exercise was necessitated by the notable non-compliance by several insurance companies against the afore-mentioned legal requirements, which had the potential to prejudice policyholders in favor of shareholders.
With respect to FML, the assessment done by IPEC was in order 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.
