IPEC crafts risk based capital framework….FMHL in first trade for the week on ZSE

IPEC crafts risk based capital framework

By Insurance24

HARARE, The Insurance and Pensions Commission (IPEC) is now a gear up towards the development of a Risk Based Capital Framework with the Commission seeking a consulting firm to assist in the process.

Ipec spokesperson Lloyd Gumbo told Insurance24 that the framework is intended to determine the capital that each insurance company should hold based on the risks that it assumes instead of just having a one-size fits all capital requirement approach

“The risk based capital framework request for proposal is to identify a consulting firm that can assist IPEC to develop a risk-based capital framework that will be applicable to the Insurance industry.

“Currently there is usually concentration on comparing an insurer’s capital against minimum capital requirement notwithstanding the extent of exposure to different risks,” he said.

Gumbo added that this may mean that some insurers comply with the minimum capital requirements yet they cannot notwithstand the risks they are exposed to or will have assumed.

“The intention of this exercise is to develop a framework that enables computation of risk based capital that a company should hold given the risks it assumes and compare it with the actual capital that it has,” he said, adding that this is meant to enhance consumer protection as it improves the safety and soundness of insurance companies.

Gumbo said the framework will also help to provide for early warning systems that enable the Commission to take necessary corrective measures timeously in the interests of policy holders.

Insurance regulation around the world is facing huge transformation towards risk based capital assessment.  The framework also ensured that local regulation keeps pace with global changes whilst incentivizing insurers into implementing enterprise risk management in their day to day business operations.


The Market

First Mutual Holdings finally moves out of shell.

HARARE, First Mutual Holdings Limited finally moved out of its shell to its first trade of the week. The company’s shares traded flat at 16c with a total 13,475 shares exchanging hands.

Other insurer, Old Mutual gained 1c to close at 566c. Other insurers Fidelity Life Assurance, Nicozdiamond and Zimre Holdings did not trade.

Block trades in Econet, NMBZH and OM carried the day in a session that had thin trades. Turnover was solid at USD 3.0m an improvement from USD 2.0m recorded in the previous session.

The All Share Index continued with the resurgence, adding 0.43 points. The Industrial Index edged up by 1.55 points and the Top Ten Index closed 0.67 points firmer with gains in Delta, Econet and OM. The Mining Index retreated 1.76 points after Bindura traded weaker. (Imara Zim Reaserch)