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IPEC to deregister four brokers

by Staff reporter
19 Jan 2021 at 07:19hrs | Views
The Insurance and Pension Commission (IPEC) is in the process of cancelling registration certificates for four insurance brokers following their breach of regulatory requirements.

In its Short Term (Non-Life) Insurance Report for the nine months to September 30, 2020, IPEC outlined brokers who failed to submit their earnings to the regulator and were excluded from the report.

These are Ambassador, Auto and General, Hostcare and Revival Insurance Brokers.

"The commission is accordingly instituting appropriate regulatory sanctions against the non-compliant entities and has begun the process of cancelling their registration certificates," said IPEC.

As digitalisation is fast growing in the country, IPEC's online portal is now fully functional, although the commission noted the decrease in the number of online submissions to 44 percent in September 2020 from 53 percent in June 2020.

According to the regulator, the bulk of returns were received as hard copies thereby delaying the production of the third quarter report.

Said IPEC: "The commission would like to underscore the importance of online submission of returns in compliance with the new norm during this Covid-19 pandemic. In addition to uploading quarterly returns on the online portal platform, brokers are urged to submit signed scanned copies of their returns via e-mail for verification."

Meanwhile, premium income by insurance brokers for the third quarter to September 30, 2020 increased by 785 percent in nominal terms to $2,3 billion from $268,68 million recorded during the comparative period in 2019.

Net brokerage commission for the third quarter of 2020 amounted to $341,99 million.

According to the report, the increased volume of business recorded by insurance brokers during the period under review was on account of gradual premium increases in line with inflationary trends. After tax profit for insurance brokers jumped 809 percent to $146,13 million from $16,08 million reported for the comparative period in 2019.

The growth was mainly driven by currency reforms, which culminated in inflationary pressures thereby driving premium increases for short-term insurers. The industry average return on equity (ROE) and return on assets (ROA) for the reporting period were 35 percent and 15 percent respectively.

The report further shows six brokers reported negative after tax profits during the period under review while four recorded nil balances as they did not submit their returns.

Source - the herald