Ipec cracks whip on funeral assurers
THE Insurance and Pensions Commission (Ipec) has expressed concern over the failure by funeral assurers to comply with regulatory minimum capital requirements and threatened to crack the whip.
According to the Ipec first quarter report, only four out of the country’s eight funeral assurers were compliant with the regulatory minimum capital requirement of $62,5 million as prescribed by Statutory Instrument 59 of 2020.
The commission said it was instituting a raft of measures to ensure compliance with the Statutory Instrument.
“The commission continues to urge players to adhere to their capitalisation compliance roadmaps to ensure they are capitalised at all times,” it said.
In the review period, the capital positions for funeral assurers ranged from $5,32 million to $204,36 million.
Ipec revealed that during the period under review, all funeral assurers were non-compliant with the minimum prescribed asset ratio of 10% as stipulated by Statutory Instrument 206 of 2019. Prescribed asset investments were insignificant as they accounted for only 0,11% of the total asset portfolio.
Ipec revealed that the total amount invested in prescribed assets investments was $1,82 million, against a minimum amount of $172,17 million for the sector to comply with the 10% minimum prescribed asset threshold.
“The commission continues to monitor funeral assurers’ compliance roadmaps through submission of monthly updates. The commission has constituted a Prescribed Asset Investments Working Group to come up with a prescribed asset framework that will take into consideration industry needs to ensure preservation of value to both the investors and policyholder funds,” Ipec said.
The funeral assurance sector reported an average current asset ratio of 123,21% during the first quarter of this year, indicating insufficient current assets to cover short-term contractual obligations.