PROBLEMS at funeral house Doves Holdings deepened this week with revelations that the company’s insurance division, Doves-Crocker-Morgan, was failing to meet the requirements of the commissio
ner of insurers, businessdigest can reveal.
The company, which administers Doves’ insurance policies, was reportedly found to be financially unstable by African Actuarial Consultants, who did an evaluation of its assets.
Doves-Crocker-Morgan was found to be in a negative position in which its liabilities of $35 billion far outweighed assets of $10 billion.
The evaluation report also found that the company had invested most of its funds in property instead of the required position where property was meant to constitute a maximum of 40% of the insurer’s total asset base.
Doves-Crocker-Morgan’s position is understood to have been affected by the failed purchase of Truck & Car Hire for $3,1 billion.
The company is understood to have borrowed funds to raise the requisite $1 billion deposit from Sagit Capital at a maturity value of $845 million as collateral for the loan.
Doves is said to have failed to service the 30-day loan leading to the loss of $845 million of policyholders investment, together with its Msasa Warehouse valued at $900 million.
The warehouse had been used as collateral.
Despite losing the assets, the firm still had an outstanding balance of $2,1 billion to clear with Truck & Car Hire owners.
Doves finally cancelled the deal with Truck & Car Hire after the amount due had ballooned to $2,4 billion because of interest. It also had to pay for its failure to meet its side of the bargain.
Doves Holdings spokesperson Nyasha Mahachi refused to comment on these developments.
“The financial director said he has no comment for you, nor do I,” said Mahachi.
The funeral company is reported to be battling to meet its policyholders’ burial expenses as the sums insured have been eroded by rising costs, a provision the company failed to anticipate in its previous policies.
The situation has resulted in the company carrying out an average of 1 500 funerals a month most of which belong to policy holders who are paying as little as $250 a month.