aurora
BH24 Reporter
Government has effected the new minimum capital requirements for insurance companies through the promulgation of Statutory Instrument 59 of 2020.
In respect of the new capital requirements for insurance firms, insurers that carry out life assurance business (including funeral assurance) are required to hold $75 million from $5 million, while those that provide non-life insurance business should hold $37,5 million from $2,5 million.
According to SI-59 of 2020, Insurers that provide reinsurance or reassurance business are required to hold a minimum capital requirement of $75 million.
And insurers which “carries on life assurance solely for the purpose of issuing funeral policies” are now required to have a base of $62 million, while insurers that provide micro insurance only are required to hold $4 million.
Minister Ncube, while making the proposals in the 2020 National Budget last year, said it was important to ensure that insurers are well-capitalised to protect value for policyholders and pension members.
“The obtaining macro-economic environment has necessitated upward review of minimum capital requirements for different players in the insurance industry to ensure that entities are well-capitalised for the protection of value for policyholders and pension members,” he said at the time.
Meanwhile, SI-59 of 2020 has also prescribed the minimum capital requirement for insurance brokers, that is, “every registered insurance broker shall effect and maintain a professional indemnity insurance with a limit of liability of not less than (a) $1,2 million; or (b) fifty per centum of such broker’s net brokerage income in his or her preceding year; whichever is greater.”
Online Reporter