Government moves in to investigate FML Assets Sepa...

Government moves in to investigate FML Assets Separation

Government has appointed investigators to carry out a forensic audit to assess if First Mutual Life broke the law on separation of insurance and pension businesses.

"The regulator issued a letter dated 27 July 2022 advising that the Finance Ministry had appointed BDO Chartered Accountants Zimbabwe, as the forensic investigator in line with the provisions of the Insurance Act (Chapter 24:07)," FML chairman Amos Manzai said this past week.

The investigation arises from an allegedly unsatisfactory report presented by FML during an assets separation exercise.

Results of the investigation are likely to come out at the end of the year or early 2023, said Manzai.

"The letter further noted that the investigation was expected to be completed within four months from the commencement date. The investigation formally commenced on 26 August 2022."

FML’s financials are pending until finalisation of the report.

"In the interim, the board of directors, in consultation with the ZSE, has decided to publish the financial information in the form of a preliminary report," Manzai said.

In the period ended June 30, 2022, FML says it recorded significant growth in US$ denominated short term insurance cover and has announced plans to invest in technology in a bid to improve service delivery.

"There was a visible shift towards US$ insurance cover amongst the short-term insurance businesses and similarly, there was an increase in the demand for US$ investment products and loans for the asset management and microfinance businesses respectively," said group CEO Douglas Hoto.

Gross Premiums Written at Nicoz Diamond Insurance Limited grew by 27% to $6 billion in inflation adjusted terms and by 195% to $4 billion in historical cost terms.

This was attributed to organic growth as well as an increased preference for US$ denominated policies.

The Group's total assets appreciated in value by 44% in the half year from 31 December 2021 to 30 June 2022 in inflation adjusted terms and 215% in historical cost terms.

Growth for inflation-adjusted and historical cost terms is mainly attributable to the fair value adjustment on investment properties, listed equities and an increase in cash reserves which went up by 33% in inflation adjusted terms and 192% in historical cost terms to $9 billion.