Statutory Instrument 49 of 1989

Insurance Regulations 1989

SIs. 49/1989, 275/1997, 212B/2000, 178/2004, 59/2005, 206/2006, 132/2007, 35/2008, 136/2008, 115/2009, 183/2009.

Section

PART I

REGISTRATION REQUIREMENTS OF INSURERS, MUTUAL SOCIETIES AND INSURANCE BROKERS

3. Minimum equity capital of insurers.
4. Additional requirements relating to equity capital of insurers and insurance brokers.
5. Registration of insurers, mutual societies and insurance brokers.
6. Business plan of applicant.
7. Issue of certificate of registration and notification of changes

7A.  Commissioner may give directions

PART IA

GOOD PRACTICE AND CORPORATE GOVERNANCE REQUIREMENTS

7B.   Insurance brokers to keep trust accounts

7C.  Board of directors of insurers mutual societies and insurance brokers

7D.  Operational procedures of insures, mutual societies and insurance brokers

PART II

SUBMISSION OF ANNUAL RETURNS AND OTHER MATTERS

8. Documents to be furnished in terms of section 30 (1) of Act.
9. Annual return to be submitted by broker in terms of section 37 of the Act.
10. Abstract of report of actuary and valuation of liabilities referred to in section 39 (2) and (3) of Act.
11. Percentage of assets to be held in approved securities.

11A. Prescribed Securities.

12. Lost or destroyed policies.
13. Fees payable in terms of section 77 (1) and (2) of Act.

PART III

LICENSING OF AGENT, MULTIPLE AGENTS AND INTERMEDIARIES

14. Licences issued by Commissioner.
15. Persons required to hold licences.
16. Indemnity cover and security required of multiple agent.
17. Validity and production of licences.
18. Application for issue or renewal of licences.
19. Issue of or refusal to issue licence.
20. Debarred person not to be issued with a licence.
21. Notification of changes.
22. Return of licence on resignation, death, retirement or termination of services.
23. Cancellation of licence.
24. Appeal against decision of Commissioner.
25. Commissioner to maintain register of licences.
26. Penalties for failure to take out or renew licence.

26A. Recovery and remission of penalties.

PART IV

ADVISORY COMMITTEES

28. Appointment of committees.
29. Functions of committees.
30. Procedure of committees.
31. Travelling and subsistence allowances.

PART V

REPEALS 32.         Repealed regulations and savings.

SCHEDULES

First Schedule: Forms.

Second Schedule: Repealed regulations. Third Schedule: Fees.

IT is hereby notified that the Minister of Finance, Economic Planning and Development has, in terms of section 89 of the Insurance Act [Chapter 24:07], made the following regulations:—

PRELIMINARY

1. Title These regulations may be cited as the Insurance Regulations, 1989.

2.   Interpretation

In these regulations—

“agent” means an insurance agent;

“close relative”, in relation to an individual, means any of the following persons—

• their individual’s grandparent, parent, brother, sister, child or grandchild, whether such relationship arises through blood or adoption;
• the individual’s step-grandparent, step-parent, step-brother, step-sister, step-child or stepgrandchild;
• where the individual is married, his or her spouse or his her spouse’s grandparent, parent, brother, sister, child or grandchild, whether such relationship arises through blood or adoption:

and the expression “closely related” shall be construed accordingly;

[Definition inserted by s.i. 59 of 2005]

“committee” means, as may be appropriate, the Life Insurance Advisory Committee appointed in terms of subsection (1) of section 28;

“firm insurance business” means the business of insuring persons against loss or damage caused by fire or by an occurrence incidental to a fire or against any loss or damage against which insurance is customarily effected in conjunction with the business of insurance against loss or damage caused by fire, but does not include the business of insuring persons against such loss or damage if the business is incidental to some other class of insurance business;

“Form” means the appropriate form specified in the First Schedule;

“funeral insurance business” means the business of assuming obligations of an insurer under funeral policies;

“holder” means a person who holds a licence;

“intermediary” means an employee of a broker or an employee of a multiple agent who introduces insurance business to the broker or multiple agent;

“licence” means a licence issued or renewed in terms of these regulations or a licence deemed to be issued in terms of these regulations, as the case may be;

“loss adjuster or surveyor or risk management consultant” means a person hired or retained by an insurer, or by an insurer and the insured concerned, to determine the extent of the insurer’s liability for any loss before or after any claim under a policy is submitted;

[Definition inserted by s.i. 275 of 1997]

“miscellaneous insurance business” means the business of assuming the obligations under policies not specified in the Act or these regulations;

“motor vehicle insurance business” means the business of insuring persons against loss or damage or the liabilities arising out of, or in connexion with, the use or ownership of motor vehicles but shall not include the insurance of vehicles or liabilities associated therewith which are ancillary to some other class of insurance business;

“multiple agent” means an agent representing more than one registered insurer in either life or non-life insurance business or in both;

“personal accident insurance business” means the business of assuming obligations under personal accident policies;

“sinking fund insurance business” means the business of assuming obligations under sinking-fund policies;

“tax clearance certificate”, in relation to an applicant for registration as an insurer, mutual society or insurance broker, or a director of such applicant, means a certificate or other proof in the form of a receipt issued to the applicant or director by or on behalf of the Commissioner-General of the Zimbabwe Revenue Authority certifying or showing that the applicant or director—

• has furnished a return under section 37 of the Income Tax Act[Chapter 23:06] for the last year of assessment for which such a return is due; or
• has made arrangements satisfactory to the commissioner-General for the furnishing of such a return;

[Definition inserted by s.i. 59 of 2005]

“transport insurance business” means the business of effecting and carrying out, otherwise than incidentally to some other class of insurance business, policies—

• upon vessels or aircraft or upon machinery, tackle, furniture or equipment of vessels or aircraft; or
• upon goods, merchandise or property of any description whatsoever on board vessels or aircraft; or
• upon the freight of or any other interest in or relating to vessels or aircraft; or
• against damage arising out of or in connexion with the use, ownership, operation, hiring or chartering of vessels or aircraft, including the liabilities associated therewith; or
• against risks incidental to the construction, repair or docking of vessels, including the liabilities associated therewith; or
• against transit risks, whether the transit is by sea, inland water, land or air or partly one and partly another, including risks incidental to the transit insured from the commencement of the transit to the ultimate destination covered by the insurance, but excluding risks, the insurance of which is motor vehicle insurance business; or
• against any other risks, the insurance of which is customarily effected in conjunction with or as incidental to any business referred to in paragraphs (a) to (f) of this definition.

PART II

REGISTRATION REQUIREMENTS OF INSURERS, MUTUAL SOCIETIES AND INSURANCE BROKERS

[Part II (sections 3 – 7A) substituted by s.i. 59 of 2005]

3.   Minimum equity capital of insurers

For the purposes of section 8(2) of the Act the minimum unencumbered paid up capital of an application for registration as an insurer shall be—

• five hundred thousand United States dollars in the case of an insurer which carries on life assurance business other than for issuing funeral assurance business;
• three hundred thousand United States dollars in the case of an insurer which carries on non-life insurance business;
• eight hundred thousand United States dollars in the case of an insurer which carries on insurance business referred to in both paragraphs (a) and (b);
• four hundred thousand United States dollars in the case of an insurer which carries on reinsurance business;

(f) four hundred thousand United States dollars in the case of an insurer which carries on life assurance business solely for the purpose of issuing funeral policies.

[Section substituted by s.i 183 of 2009]

4. Additional requirements relating to equity capital of insurers and insurance brokers

An insurer or insurance broker or applicant for registration as an insurer or insurance broker, shall comply with the following additional requirements for registration with respect to its equity capital—

• every insurer or insurance broker must have at least three shareholders;
• no individual or individual and his or her close relatives may own or control, directly or indirectly, more than forty per centum of the voting shares of the insurer, insurance broker or applicant.
• no part of—
  • the minimum paid-up equity capital of the insurer or applicant insurer shall consist of borrowed funds;
  • the paid-up equity capital of the insurance broker or applicant insurance broker that is used to determine whether he or she qualifies for registration in terms of section 3(2)(iv) or (v) shall consist of borrowed funds.

5.   Registration of insurers, mutual societies and insurance brokers

(1)  An application for registration as an insurer or mutual society made in terms of section 9(1) or 13(1) of the Act shall be in Form 1 or Form 2, as the case may be, and shall be accompanied by—

• a memorandum and articles of association, regulations or other documents constituting the applicant and regulating the conduct of the applicant’s business, or, if the applicant seeks registration as a mutual society, the constitution and by-laws of the society, together with a sworn statement that the society has complied with sections 17 and 18 of the Act; and
• in the case of an applicant who is not seeking registration as a mutual society, a statement, certified by the chairperson, a director and the auditors of the applicant, showing the authorised and paid-up capital of the applicant at a date not earlier than thirty days before the date of application; and
• a balance-sheet, profit and loss account and revenue accounts in respect of the applicant’s last preceding financial year, if the applicant carried on insurance business before the date of the application; and
• if the applicant is to carry o life insurance business on insurance business for the purpose of issuing funeral policies, a statement by an actuary on the actuarial soundness of the proposed business; and
• a letter from an executive officer of a bank registered in terms of the Banking Act[Chapter 24:20] with which the applicant intends to operate any current account confirming that the applicant is a customer or has been accepted as a customer of the bank; and
• a declaration by each director and manager that he or she is a fit and proper person to be director or manager of the applicant, that is to say that he or she—
  • has not, within the period of 10 years immediately preceding the date of the application, been convicted of any offence involving theft, fraud or dishonesty; and
  • has not been prohibited, whether for a period or indefinitely, from carrying on business as an insurer or as a bank, building society or pension fund manager, or from practising as a stockbroker, public accountant, public auditor, legal practitioner or other profession for the practice of which provision is made under any enactment; and
  • has not, in any application, return or other document required to be furnished to the Commissioner under the Act or to the relevant authority under any enactment governing banks, financial institutions, building societies, pension funds or the Zimbabwe Stock Exchange, furnished the Commissioner or the relevant authority with information that is materially false, inaccurate or misleading; and
  • is not an unrehabilitated insolvent; and
• a statement disclosing full details of any directorship or managerial post held by a director and manager of the applicant in any other insurer, mutual society, insurance brokerage company or other applicant for registration as such; and
• the curriculum vitae of every person who will become a manager of the proposed insurer or society, containing details of their qualifications or experience in the field of insurance, and their employment history; and
• if the applicant is carrying on life insurance business, an abstract of the report of an actuary on the last investigation into the applicant’s financial position in which a valuation of its liabilities was made; and
• a certificate of solvency in Form 5, 6 or 7 as may be appropriate; and
• a business plan of the applicant; and
• a tax clearance certificate issued to the applicant and each director of the applicant; and
• the appropriate registration fee for the class of insurance business in respect of which registration is sought, as specified in Part I of the Third Schedule.

(2)  An applicant for registration as an insurance broker made in terms of subsection 35(2) of the Act shall be in Form 3, and shall be accompanied by—

• a memorandum and articles of association, regulations or other documents constituting the applicant and regulating the conduct of the applicant’s business; and
• proof satisfactory to the Commissioner of any of the following—
  • an investment in approved securities of not less than one hundred million dollars; and
  • professional indemnity insurance with a limit of liability of not less than one hundred million dollars; and
  • a guarantee by a bank or insurer or other third party approved by the Commissioner in the form of an irrevocable undertaking given to the Commissioner that, in the event of the insolvency of the applicant, the guarantor shall pay to the Commissioner on demand a sum of not less than one hundred million dollars for disbursement to the creditors of the applicant; and
  • in the form of a statement, certified by the chairperson, a director and the auditors of the applicant, showing that—
    1. the applicant’s unencumbered paid-up equity capital is not less than five thousand million dollars; and

[Subparagraph amended by s.i 167 of 2006]

1. the applicant has and intends to maintain deposits with a bank or other assets or investments worth not less than one hundred million dollars;

and

• a balance-sheet, profit and loss account and revenue accounts in respect of the applicant’s last preceding financial year, if the applicant carried on insurance business before the date of the application; and
• a letter from an executive officer of a bank registered in terms of the Banking Act[Chapter 24:20] confirming that the applicant has opened or has a trust account with the bank referred to in section 7B(1)(a) or that the applicant’[s application to open such account has been accepted; and
• a declaration by each director that he or she is a fit and proper person to be director of the applicant, that is to say that he or she—
  • has not, within the period of 10 years immediately preceding the date of the application, been convicted of any offences involving theft, fraud or dishonesty; and
  • has not been prohibited, whether for a period or indefinitely, from carrying on business as an insurance broker or from practising as a stockbroker, public accountant, public auditor, legal practitioner or other profession for the practice of which provision is made under any enactment; and
  • has not, in any application, return or other document required to be furnished to the Commissioner under the Act, furnished the Commissioner with information that is materially false, inaccurate or misleading; and
  • is not an unrehabilitated insolvent; and
• a business plan of the applicant;
• a tax clearance certificate issued to the applicant and each director of the applicant; and
• the appropriate registration fee for the class of insurance business in respect of which registration is sought, as specified in Part I of the Third Schedule

(3)  The portion of any application fee payable for registration shall be refunded to an applicant if the commissioner rejects the application, unless the Commissioner finds that any information provided in connection with the application is, to the knowledge of the applicant, false in any material particular, or was provided by the applicant without having reasonable grounds for believing it to be true.

5. Insurance Brokers to hold investments in approved securities and maintain professional indemnity cover Every registered insurance broker—

• shall hold and maintain an unencumbered investment in approved securities of not less than five hundred thousand United States dollars equivalent in Zimbabwe dollars;
• shall effect and maintain a professional indemnity insurance with a limit of liability of not less than—
  • five hundred thousand United States dollars equivalent in Zimbabwe dollars; or
  • fifty per centum of his or her net brokerage income in his or her last preceding year which ever is the greater.