adminBianca Mlilo, Business Reporter
ALTFIN Life Assurance has been placed under liquidation on insolvency basis after it failed to pay out claims to its clients.
Liquidation occurs when a company is insolvent, meaning it cannot meet its obligations as and when they are due.
Upon liquidation, the company ceases operations and its assets are divided up among creditors and shareholders, according to the priority of their claims.
In a statement, the Insurance and Pensions Commission (IPEC), the governing body for pensions and insurers, said the insurance firm was now in the hands of a liquidator, Mr Phibion Gwatidzo.
“IPEC hereby advises all stakeholders that Altfin Life Assurance Company Limited has been placed under liquidation and all inquiries should be lodged with the liquidator,” said IPEC.
Altfin Insurance’s operating licence was cancelled in January 2015 by the Insurance and Pension Commission after it failed to raise the required minimum capital of $1,5 million. Altfin Assurance is a subsidiary of Altfin Holdings Limited, the suspended parent company, which holds a controlling stake in Altfin Life Assurance and Altfin Health.
The firm has been under provisional liquidation since October 2015. Its assets are worth $2 million while liabilities stand at $3,3 million. Preferred creditors will after dividing of the insurer’s assets, recover the full amount owed while concurrent creditors will get 21 percent of the owed amount.
The company is also facing several litigation cases worth $1,4 million with Myramma Farm being owed $1,2 million while Cottco is owed $96 500, earlier media records state.
The insurer, which was part of the collapsed Interfin Holdings Limited, was severely exposed to its sister unit, the collapsed Interfin Bank and was affected so much that at the end of 2013 it could not meet its obligations. — @BiancaMlilo
derick.khumalo