GOVERNMENT will appoint a regulatory board for the insurance and pensions industry to oversee the sector’s transformation, the Ministry of Finance and Economic Development has said.
The government has also barred cross-ownership by local or foreign-owned companies within the insurance sector.
According to the Ministry of Finance quarterly bulletin for April/June, by setting up the board government hopes to create investor confidence.
“To improve corporate governance, government will soon be appointing a regulatory board for the insurance and pensions industry,” the ministry said. “Its mandate will be to oversee the industry’s transformation with regards to meeting the current economic, social and political challenges. The board is expected to lay the legal and regulatory framework for the industry which is vital if the confidence of the investing public is to be retained.”
The report said there was need for a strong capital base for the insurance sector.
“To this end government has introduced new minimum paid-up share capital requirements for insurance, reinsurance, funeral assurance, insurance brokers and multiple agents of $800 million, $2 billion, $750 million, $250 million and $150 million respectively,” the quarterly report said.
“In tandem with this, the new maximum shareholding for individuals or any institutional investor and foreign ownership has been set at 40% and 49%, respectively. The commissioner’s office is, therefore, considering applications for re-licensing from companies using this newly set criteria.”
Although the report set new capitalisation requirements for the sector, it was, however, silent on the deadline the regulations would have to be met. It said insurance policy holders and pensioners had experienced serious erosion in the purchasing power of their monetary emoluments.