1. Licensing Requirements for Insurers
    • All applicants to be licensed/registered as insurers should be incorporated as companies in terms of the Companies Act [Chapter 24:03].
    • These applicants should have Memorandums and Articles of Association with the main objective being to conduct the business for which the licence is being applied for.
    • Apart from the above, the licensing procedure will involve assessment of the following aspects of the applicant:

         Ownership and Shareholding Structure

  • The shareholding structure should be compliant with Statutory Instrument 59 of 2005 which stipulates that no single shareholder and his or her close relatives shall own or control more than 40% of the voting shares of the applicant.
  • The shareholders should be vetted for fitness and probity in terms of financial soundness and integrity by assessing their solvency, tax liabilities and criminal records. Financial soundness is demonstrated by sources of financing/funding and future access to capital while integrity is demonstrated in personal or corporate behavior.
  • The assessment is done through the submission of audited or audit verified financial statements (for corporate shareholders) and net worth statements for individual shareholders, police clearance and declarations by the applicant’s shareholders that they have never been insolvent, declared unfit to hold positions of trust and never been criminally convicted.
  • Audited or audit verified financial statements and net worth statements are used to assess whether the shareholders have the capacity to raise additional capital should the need arise.
  • The Commission should also analyze the ownership structure and sources of capital funds.
  • In the case of shareholders of the applicant who are corporates IPEC traces the shareholding of such corporates until it identifies the ultimate natural persons who have beneficial ownership indirectly in the applicant.
  • In the case of shareholders of applicants who are family trusts, IPEC should establish the trustees and the beneficiaries of the family trust. The constitution and any other relevant documents in respect of the family trust should be furnished by the applicant to IPEC.


  • The Commission shall assess whether the applicant meets the minimum stipulated capital requirement for the class of insurance business for which registration is being sought.
  • It is important to assess the structure and the quality of capital in a bid to establish its sustainability on an ongoing basis. This analysis should also be guided by the investment guidelines which IPEC has issued for each class of business.
  • In addition, non-admissible assets and liabilities should be considered. Guidelines on the definition of capital for solvency should be considered in the assessment of capital adequacy on application and on an on-going basis.

Board of Directors and Senior Management

  • The board of directors should have a clear board charter, spelling out the terms of reference of the board.
  • In addition, where relevant, the applicant should have board committees with clearly spelt out terms of reference. The applicant should have board committees which are in line with the size and complexity of the institution and these should, at a minimum, include the Investment Committee.
  • Other board committees that may be put in place include Audit, Risk Management and Asset and Liability Committees (ALCO).
  • IPEC should ensure that the board is independent.
  • To ensure that the applicant will have adequate board and senior management oversight, IPEC shall assess the fitness and probity of all members of the board of directors and senior management i.e. those who are to hold key positions in the entity to be registered (the guidelines on which positions are key will be developed in due course as part of the licensing manual).
  • The fit and proper test should at minimum, include the assessment of the relevance of qualification and experience, financial bureau clearance, police clearance and issues of solvency established through assessment of directors and key position holders’ net worth statements.
  • Guidelines on Fit and Proper Test for the industry will establish the minimum requirements for members of board of directors, management, key personnel, and significant shareholders.


Organisational Structure

  • IPEC shall analyse an applicant’s organisation structure to ensure that functions are clearly defined with segregation of functions taken into account. The organisation structure should have clear reporting lines.
  • The relationship with related parties and outside entities will be assessed.
  • There should be clearly spelt out service level agreements with related parties and service providers where functions are outsourced.
  • If the applicant is part of a group, the group structure should be clear and allow easy regulation and ensuring that policyholder interests are not prejudiced.

Policies and Procedure Manuals

  • IPEC will ensure that there are policies and procedures for the main activities proposed by the applicant. These policies and procedures should be assessed in terms of their adequacy vis-a-vis the nature, size and complexity of the applicant’s proposed business.
  • Applicants should submit complaints handling procedures indicating how complaints are handled and showing how a grieved customer can escalate his/her complaint. IPEC should be cited as one of the appeal offices for the complainant.
  • The procedures will be assessed in terms of their being easy to follow without imposing unnecessary burden or barrier on the complainant.

Business Plan Assessment

  • The business plan should, at a minimum cover the following issues:
  1. Identifying information, auditors and bankers of the applicant. Supporting documents such as engagement letter, Form CR6 should be enclosed;
  2. Organization structure with the names of senior managers inscribed therein and group structure where applicable;
  3. Capital position and solvency margins;
  4. Projected setting up and development costs by business line;
  5. Business strategy and objectives which should include products to be offered by the applicant, distribution methods and channels;
  6. Projected statement of financial position, projected statement of comprehensive income and projected cash flow statements for at least 3 years;
  7. Risk profile for the applicant;
  8. Information regarding primary insurance and reinsurance;
  9. Market analysis and value proposition;
  10. Comprehensive complaints procedure
    • The marketing plan should be assessed in terms of penetration strategy and the strength, weakness, opportunities and threats (SWOT) framework.
    • It should be determined if the project is viable from the marketing plan and the projected financial statements.
    • Sensitivity Test for business plan
    • Actuarial Certficate/valuation


  • All products proposed should be in line with the licence being applied for. Sample policy documents should be assessed in terms of exclusions, claims procedures, pricing among other factors.
  • Copies of financial projections, risk management/actuarial appraisal of the different products should be availed.
  • Any condition of a policy which makes it difficult to claim under the policy, should not be allowed to be part of the condition of any insurance product.
  • The benefits under any insurance should be clear and also the event(s) that should trigger a claim.

Projected Financial Statements

  • IPEC after assessing the reasonability of assumptions forming the basis of projected financial statements, shall analyse the same using relevant ratios as detailed in the IPEC Offsite Surveillance Manual to determine the financial viability of the applicant over the projection period (minimum three years).

  • All applicants for mutual society licences shall be required to submit the following documents:
    1. the constitution of the society;
    2. any by-laws of the society; and
    3. such other documents as may be prescribed from time to time.

IPEC shall be guided by section 11 to 21 of the Insurance Act [Chapter 24:07] when processing an application for registration as a mutual society.

  • The requirements for insurers in section 9 shall be applied where relevant.
  • Additional requirements in terms of Professional Indemnity cover shall also be assessed.

  • Agents are required to possess a minimum qualification of a Certificate of Proficiency together with the completed application form. See copies of application forms in Appendix 2 to 9.

  • The licensing of loss assessors is governed by the provisions of Circular Number 4 of 2011 and Statutory Instrument 275 of 1997.


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