Troubled life insurer, Bona Life is attracting interest from takeover bidders, with its statutory manager confident that policyholders, particularly pensioners, will be protected.
With a portfolio of P712 million in policies, Bona Life was placed under statutory management in January, after it failed to meet the prudential capital thresholds set by the Non-Bank Financial Institutions Regulatory Authority (NBFIRA).
The life insurer, which was the third largest in the country at the time, had struggled due to a shareholder stalemate over recapitalisation of the business, which saw the firm’s founder, Regina Vaka, exit early in January.
On Wednesday, statutory manager, Paul Masie said the process was at a sensitive stage and details could not be divulged.
“There are interested parties but we are at a very sensitive stage,” he said.
“The safest I can divulge is that the process should be complete by the end of the year or probably sooner than that.
“The main objective is to protect all the policyholders, in particular the pensioners and that, I think, will be achieved.”
Policyholder protection was amongst the biggest fears at Bona Life’s collapse, with analysts saying it was likely policyholders would have to take a ‘hair cut’ or reduction of their benefits in order for the firm to comply with the prudential capital requirements.
At the time of going into statutory management, Vaka, who founded Bona Life in 2013, held 25% equity, while the Botswana Public Officers Pension Fund (BPOPF) indirectly held 40% and staff 10%.
Capital Management Botswana, an asset manager under liquidation, held a 25% stake which was expected to revert to the pension fund.
BPOPF members accounted for 85% of Bona Life policyholders, but the pension fund was reportedly resolute against recapitalising the business. The pension fund preferred NBFIRA to prescribe the route to be taken to resolving Bona Life’s crisis.
Former NBFIRA CEO, Oaitse Ramasedi told BusinessWeek earlier this year that the regulator believed Bona Life was solvent and during the period of the statutory management, the firm would continue to meet its obligations to life insurance claims and annuities’ payments.
“Statutory management is not liquidation.
“The statutory manager goes in there to take over the running of the organisation and will take decisions that he believes are in the best interests of the stakeholders, chief of whom are the policyholders,” he said.
At the end of the period of statutory management, Masie is expected to make recommendations to NBFIRA on Bona Life’s fate. The recommendations are expected to include the identity of the takeover partner.