Insurance Companies To Be Audited On A Monthly Basis

The government has moved to tighten screws around Insurance Companies. Insurance companies are now supposed to undergo monthly audits to ensure that their assets are sufficient to cover their clients in case of a loss. This regulation was gazetted by the government last week.

According to The Herald:

Under the new regime, insurance companies will be required to conduct self-assessment to prescribed ratios within 14 days after the end of every month based on management accounts. An insurer that fails to comply with the new prescribed asset ratios is required to, within 30 days from the date it becomes aware of such, advise IPEC of the non-compliance and take corrective plans within a period of six months.

The provisions empower the insurance industry regulator, the Insurance and Pensions Commission (IPEC), to take punitive or corrective measures to enforce compliance with the prescribed asset requirements, amid indications the insurers have been struggling to comply.

The minimum prescribed asset thresholds for both short-term non-life insurers and reinsurers were doubled in November last year, through the 2019 National Budget, from 5 to 10 percent; life assurers from 7,5 to 15 percent, while funeral assurers increased from 7,5 to 10 percent.

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More: The Herald