KMFS Insurance’s bid to challenge the regulator’s decision to bar the firm from underwriting business hit a snag after the High Court dismissed the case.
The insurance firm filed a High Court application on December 17 2015, accusing first respondent, the Insurance Council of Zimbabwe (ICZ) of advising its clients that it was deregistered from underwriting insurance business.
The beleaguered company was also seeking to order ICZ and Zimbabwe National Road Administration (Zinara) to validate all its insurance cover and certificates in terms of the law.
The Insurance and Pensions Commission (Ipec) suspended Kmps from initiating and renewing insurance business last March.
What prompted the application is that the applicant (KMFS insurance) issued insurance cover and certificates to its client, Great Rivers Transport on November 1 and November 9 2015 respectively despite being suspended from underwriting insurance business in March last year.
Great Rivers Church has been contacted by a church known as Mount Hebron Tabernacle Church to ferry its members on a trip to Botswana.
The church as a precautionary measure contacted first respondent with a view to confirm the applicant’s good standing.
The Insurance Council of Zimbabwe then advised the church that the insurance cover and certificates issued by the applicant were invalid because the applicant who issued them was a deregistered company which is not recognised by the ICZ. It further said the certificates would not be validated through a Zinara’s new computer system .
The church then cancelled its trip and demanded a refund of its money from the applicant.
The applicant then approached the High Court to compel the respondents to withdraw the damaging reports and to compel the first (ICZ) and third respondents (Zinara) to validate its certificates.
At the hearing, Ipec and Zinara opposed the application and took some points in limine due to the fact that the applicant was approaching the court with dirty hands and material non-disclosure.
The applicant’s lawyer Lovemore Madhuku argued the court has stated repeatedly that applications under cover of urgency that are filed with material deficiencies are often dismissed upon discovery of material non-disclosure .
“A perusal of the applicant’s papers shows that the applicant did not disclose the fact that it was under suspension. Infact the applicant only produced a letter dated July 8 2015 which is a proposal by the second respondent to cancel the registration of the applicant’s certificates of registration for failure to meet requirements raised in the letter dated March 5 2015,” he said.
The High Court Judge justice Owen Tagu dismissed the case and struck it off the roll, saying the applicant acted illegally thus putting property and lives of the people at risk.
“These courts are enjoined to show their displeasure at such wanton and fragrant disrespect of the law by dismissing the application costs where one is shown to have approached the courts with dirty hands,” the judge ruled.
Meanwhile Excellence Insurance Company (Private) Limited, Global Insurance Company (Private) Limited, New Reinsurance Company (Private) Limited, Navistar Insurance Brokers face suspension by the regulator due to undercapitalisation, failure to settle claims, weak corporate governance and unethical business conduct.