FML withdraws court application in asset separate case

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By Alois Vinga

LISTED life assurance firm, First Mutual Holdings Limited (FMHL) has withdrawn its High Court application by consent in a long-standing feud involving assets separation matter.

FML was caught on the wrong side by the regulator, the Insurance and Pensions Commission (IPEC) in a matter involving asset separation.

Following the Finance Ministry’s appointment of BDO Chartered Accountants Zimbabwe, as the forensic investigator in line with the provisions of the Insurance Act (Chapter 24:07) and the subsequent report from the investigation, it was established that FMHL had to be whipped into line.

Early this year, FMHL was slapped with a Corrective Order to align operations to the proper position.

But dissatisfied with the order’s implications, FMHL filed an application with the High Court.

“On 21 December 2023 FML received a Corrective Order from IPEC in relation to the BDO report. In order to protect FML’s legal rights an application for review of the Corrective Order was filed with the High Court. The institution of legal proceedings had become unavoidable to safeguard FML’s rights.

“FML eventually agreed to a binding plan and the High Court applications by FML against IPEC were withdrawn by consent. The FML board and management are currently executing the agreed plan which should be concluded on or before 30 June 2024. Further details are provided in note 26 of this report,” FMHL chairperson Amos Manzai revealed.

However, during the period ended December 31 2022, the Insurance Contract Revenue (ICR) grew by 172%, in inflation-adjusted terms, to $1.1 trillion for the year ended 31 December 2023 compared to the prior year.

In historical cost terms, an ICR growth of $503.3 billion was recorded, up 966% on the prior year.

The notable growth in comparison to the previous year was largely driven by the migration from ZWL policies to USD policies as well as continued revaluation of ZWL insurance policy values to ensure adequate cover.

The actual US$ business that was written by the Group for the twelve months constituted 74% of the total ICR, at USD98.4 million, a growth of 53%.compared to a prior year figure of USD62.7

“Going forward, risks threatening opportunities will be tied to the policy environment as the Government will have to manage economic shocks that may arise from liquidity injections from grain purchases to close the gap arising from the El-Nino drought impact as well as treasury bill settlements in 2024.

“The Group will continue to employ an agile strategy framework to navigate these emerging risks and utilise group synergies to respond to the macro-economic environment in the pursuit of profitable returns to its stakeholders,”  added Manzai.