Ipec warns regulatory action for Life Assurers defaulting on minimum prescribed ratio

Ipec warns regulatory action for Life Assurers defaulting on minimum prescribed ratio

Insurance24

HARARE, Non-complaint life assures with the minimum prescribed ratio of 7.5% risk regulatory action, regulator, the Insurance and Pensions Commissions has warned.

For the period second quarter ended 30 June 2017, 8 players were fully compliant with the prescribed minimum prescribed ratio of 7.5% with the exception of Econet Life, Evolution Health and Life, Heritage Life, and Zimnat Life.

“The Commission will not hesitate to take regulatory action against non compliant players,” read the report in its latest quarterly Life Assurance Report.

Econet Life’s prescribed asset ratio was 5.90%, with a negative variance of 1.6%. Evolution Health and Life and Heritage life were at 2.61% and 0.00% respectively. Zimnat was at 6.12%.

During the period, Fidelity Life Assurance had the highest prescribed asset ratio of 35.69% followed by First Mutual’s 15.91%.

Prescribed asset investments for the period amounted to $273.80 mln off total assets of $1.87 bln.

As at June 30 2017, all operating life assurance companies were compliant with the prescribed minimum capital requirement of $2 million with the majority of life assurers geared towards the proposed new capital requirement in the Statutory Instrument 95 of 2017 which became effective on the 25th August 2017.

Meanwhile, while the regulator maintains that the sector remained safe and sound and continued to play a significant role in the economy, net premiums declined 2% to $171 million compared to $173 million in the June quarter of 2016.