Deregistered firm sues ICZ

HARARE - A deregistered insurance firm has approached the High Court seeking to force the Insurance Company of Zimbabwe (ICZ) to issue it with cover notes for it to receive insurance premiums from members of the public.

The country’s insurance regulator ICZ cancelled insurer, Global Insurance Company (Private) Limited (Global Insurance)’s operating licence in March after it allegedly failed to raise the required minimum capital.

ICZ cancelled the short-term insurer’s licence, while ordering the firm to stop disposing of its assets and underwriting new business due to a weak capital position.

In 2013, the regulator doubled the minimum capital requirements for the sector, with short-term insurers required to achieve a minimum capital level of $1,5 million and life assurers having to put up $2 million.

In its High Court application, which cites ICZ and Insurance and Pensions Commission(Ipec) as respondents, Global Insurance said the regulators were mistaken that Global Insurance was deregistered and cannot trade.

Global Insurance said its business of issuing insurance certificates to its clients who would have paid their insurance premiums has been adversely affected by the stand-off.
The insurance certificates are printed by Fidelity Printers.

“After payment to Fidelity Printers, confirmation as to the authenticity of the paying individual is sent thereof by the first respondent (ICZ) thereby also allowing printing to begin. In casu, the respondent (ICZ) has refused to give such confirmation on behalf of the applicant (Global Insurance) as it is labouring under the erroneous belief that applicant is deregistered and cannot trade,” Global Insurance argued.
ICZ is refusing to give confirmation to Fidelity Printers to have its cover notes printed, according to Global Insurance.

“Such refusal has created a situation that is causing irreparable harm in that the applicant is unable to receive insurance premiums from members of the public and its clients, as it is unable to issue cover notes as is required,” Global Insurance said.

It argued that it was losing business as members of the public were proceeding other insurance companies, adding that this damaged its reputation.

“The applicant has not yet been deregistered and as such has a clear right to trade and the actions of the first respondent are clearly infringing upon that right in particular.

“The refusal by the applicant to give confirmation to Fidelity Printers to print applicant’s cover notes is a serious infringement on the applicant’s rights. First respondent’s behaviour goes to the core of applicant’s operations and is detrimental especially given the current economic environment,” the firm argued.

ICZ and Ipec are still to respond to the application.

But Ipec commissioner Manette Mpofu said in a letter dated March 13, “Following the conduct of an on-site inspection …, the commission hereby advises that Global Insurance Company Limited has, with immediate effect, been suspended from initiating and renewing insurance business.

“The regulatory measure has been taken in terms of section 67(3) of the Insurance Act (Chapter 24:07), taking cognisance of the glaring shortcomings noted in the inspection, in a bid to protect policyholders.

Meanwhile, we request that you withhold all the funds due to Global Insurance Company Limited from the pools administered by your association which include the Motor Insurance Pool, pending further instructions.”

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