NBFIRA Closes Insurance, Medical Aid Firms
Brian Benza | Wednesday July 19, 2017 18:00
In three separate statements, NBIFRA said they had temporarily closed insurance company, Phoenix Botswana while two medical aid companies; Botsogo and Itekanele have also been provisionally shut.
“Members of the public are informed that Phoenix of Botswana Assurance Company has been placed under temporary closure in terms of Section 57 of the NBFIRA Act. Please be advised that as a condition of the closure Phoenix shall no longer take new clients or issue new insurance covers until further notice,” said NBFIRA.
The regulatory authority also said during the temporary closure, Botsogo and Itekanele shall no longer take new clients or issue new medical aid covers until further notice but existing clients will not be affected.“Existing members are advised that the temporary closure will not affect their medical aid covers and consequent rights and responsibilities,” NBIFIRA.
Phoenix insiders say they suspected something was wrong when the CEO abruptly resigned last November and his replacement also quit last month.
Although NBFIRA did not specify the reasons for the closure Section 57 of the NBFIRA Act states that the regulator may temporarily close the business or freeze the bank accounts of a prudentially regulated non-bank financial institution upon reasonable suspicion that the company is not complying or is not likely to comply with a financial services law.
“Provided that, the regulatory authority may authorise urgent transactions which are necessary to maintain the financial obligations of the institution.
The regulatory shall as soon as practicable within five days apply to the High Court for a confirmation order,” reads the Act.
NBFIRA regularly conducts inspections as part of the continuous risk based supervision regime in which all licensed insurance entities are subject to routine onsite inspections depending on the findings of the offsite monitoring.
The onsite inspections involve general checks on the entity’s internal controls systems, corporate governance as well as compliance with the relevant rules and regulations.