Capital requirement to reduce outflows

THE recently- revised minimum capital requirement for insurance companies may help reduce reinsurance outflows as some firms may have the capacity to take up larger risks such as mining and energy projects.
In 2015, the Pensions and Insurance Authority (PIA) revised the minimum capital requirement upwards with re-insurance companies threshold being K20 million from the previous K1 million, while long-term and general insurers is now pegged at K12 million and K10 million respectively from K1 million.
Brokers will also need to raise their paid up minimum capital from K50,000 to K100,000 as a way of strengthening the insurance industry.
“Reinsurance is the greatest outflow of the sector but some companies may now have to take up some of the huge risks with the revision of the minimum capital requirement,” PIA registrar Martin Libinga said in an…

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