Insurance firms miss capital deadline

Published: 03 July 2014

THE Insurance and Pensions Commission (IPEC) has revealed that only 12 of the 25 licensed insurance companies have complied with the minimum capital requirement of $1,5 million by the end of last month.

IPEC's short-term insurance report for the first quarter ended March 31, 2014, says the 13 non-compliant insurers reported capital levels ranging from $520,000 to $1,49 million.

"The average capital maintenance ratio for the 13 insurers was 73,76 percent as at March 31, 2014. This implies that, on average, the capital position of the 13 insurers fell short of the minimum capital requirement by $390,000," IPEC said.

"The Commission encourages all insurers who fail to comply with the minimum capital requirements to consider merging, if other capital raising initiatives are not fruitful."

The Commission has already suspended Altfin Insurance Company from writing new business due to undercapitalisation and failure to settle claims.

This followed an inspection conducted by IPEC during the quarter under review on the company which revealed that the institution's capital position was worse than what they reported, after disqualifying some assets which they had reported.

This brought the number of registered companies not operating to two, with ECGC being the other.

Meanwhile, total gross premium written by non-life insurers increased by 6,82 percent from $66,68 million for the quarter ended March 31, 2013, to $71,23 million during the quarter under review.

Out of the business written, $35,39 million was ceded to reinsurers, of which $15,58 million was ceded through reinsurance brokers.
- The Herald

Tags: Insurance,