IPEC moves to institute corrective orders against First Mutual Life

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By Alois Vinga

LIFE assurance firm, First Mutual Life Assurance Company (FML) says it has received an order for corrective measures to be implemented by the regulator following defiance of the law on the separation of insurance and pension businesses.

The order came after a thorough forensic investigation by the Insurance and Pensions Commission (IPEC) after an April 2022 backdated feud.

In a cautionary statement issued Friday, the FMHL group company secretary, Sheila Lorimer revealed that at the close of the forensic investigations.

“The investigation was completed in February 2023 and the report was submitted to the Minister of Finance, Economic Development and Investment Promotion in accordance with section 67 of the Insurance Act [Chapter 24:07] (“the Act”). 

“In line with the Act, FML submitted representations on the contents of the report to the Minister on 8 June 2023. On 21 December 2023, FML received a response from IPEC indicating that the Commission was mandated by the Minister to institute corrective measures. The Corrective Order issued by IPEC is receiving due attention from the FML Board and management,” said.

She said the Corrective Order issued by IPEC is receiving due attention from the FML Board and management.

“As these developments may have a material effect on the price of the Company’s securities, shareholders are advised to exercise caution when dealing in the Company’s securities pending a full assessment of the implications of the Corrective Orders,” added Lorimer.

The corrective order is expected to identify assets that were misappropriated from policyholders to shareholders or vice versa; quantify the assets that may have been misallocated and apportion them to their rightful owners; and enhance compliance with the legal requirements for asset separation as a way of improving good governance in the insurance and pension sector.