ESTHER MSETEKA, Lusaka
SEVENTEEN insurance firms, which have not yet met the minimum capital threshold, are opting for various strategies to save their businesses before the October deadline.
Out of 33 insurance entities, only 16 have met the requirement aimed at making the industry competitive and robust following an increase in minimum capital ranging from K100,000 to K20 million by regulators Pensions and Insurance Authority (PIA).
But PIA registrar Martin Libinga said the options being considered by those that have not yet met the requirement are to capitalise their reserves, merging and selling off their businesses as the deadline nears.
In 2015, Government signed a statutory instrument to allow insurance companies to increase their paid-up capital to the minimum of K20 million from K1million, long-term and general insurers to K12 million and K10 million, respectively, from K1million, while the threshold for brokers has been increased to K100,000 from K50,000.
Mr Libinga, in an interview at the just-ended 91st Agricultural and Commercial Show, said PIA officials had a meeting with some insurance firms to chart the way forward.
“In terms of the capital requirement, there has not been much change and last week, we met with all the insurance companies to deal with the issue. We are seeing some positive strides coming from the sector because some firms are converting their reserves to ensure that they are fully capitalised.
“However, others are talking of merging and some might sell off their businesses to other entities. And we think that by October we will have a more stable sector financial-wise,” Mr Libinga said.
He also commended Government for its intention to table the current Insurance Act at Parliament’s next sitting.
Mr Libinga said the repealing of the current Insurance Act will strengthen and boost economic activities in the sector.
“We have been waiting for the new legislation in the insurance sector. The Act is dealing with a number of things and one of them has to do with premium management and just the entire industry in general,” he said.