CBL wants  insurance companies shut down

CBL wants insurance companies shut down

MASERU – THE Central Bank of Lesotho (CBL) wants two insurance companies shut down for operating illegally.
The CBL Governor, Dr Retšelisitsoe Matlanyane, says the Legal Voice Limited and Law Protection Clinic Limited are operating illegally after she refused to issue them with licences.
In her notice of motion filed at the High Court, Matlanyane promised to file an urgent application today.

She told the court that the two companies are undercapitalised and lack the capital reserves to be able to meet claims should there be a rush of claims.
“They are unable to comply with the requirements of the insurance (industry),” she said.
She argued that the continued operations of the companies place the general insuring public in Lesotho at risk and more especially since they do not have licences to operate.
“It is the CBL’s responsibility to enforce compliance, to supervise, regulate, control and protect the insurance industry in Lesotho to make sure the public doesn’t suffer loss,” Matlanyane said.
She said the way the two companies operate is to use current premiums to meet claims as and when they arise.

She said they do not comply with the Insurance (Capital, Solvency and Reserves Requirements for Insurers) Regulations 2016.
The governor argued that their continued operation “constitute a risk to the insuring public”.
“There is a real risk that their claims, should they arise, will not be met,” she said.

She said her failure to act now “will expose the CBL to accusations that it did not protect Lesotho’s general public”.
She asked the court to declare that the two companies are conducting insurance business without licences in contravention of Insurance Act 2014.
She also asked that they should be interdicted and restrained from contacting with, advertising, soliciting or in any way invite the Lesotho public to enter into further or new contracts of insurance with them without being lawfully licensed in compliance with the law.

“They cannot, have not and are unable to comply with requirements of the Insurance Regulations 2016,” she said.
“It is the CBL’s responsibility to enforce compliance with Insurance Act, also to supervise, regulate and control and protect the insurance industry in Lesotho. This includes the general public.”
She charged that they do not even have conditional licences as contemplated in Section 9 of the Insurance Act.

Matlanyane said the CBL came to court after making “exhaustive efforts to cause the (two companies) to be legally compliant”.
“The CBL’s efforts in this regards span many months, in fact years,” she said.
She also said the companies have always had many problems.

Matlanyane said documentation pertaining to these problems and the nature of the problems themselves is voluminous.
She said there is a detailed catalogue of all the CBL’s problems and complaints over the years.
“They have no right to operate at all,” she said.

Matlanyane said their conduct is a criminal offence attracting a fine of M500 000 or 10 years in prison or both if convicted, according to Section 6 of the Insurance Act.
She said with this in mind she approached the police asking them to stop the operation of the companies but in vain.
She said the police told her they were unable to assist her because this issue “is more a civil matter than a criminal matter”.
“The police have accordingly been reluctant to get involved,” she said.

“The attitude of the police throughout has been that the CBL must approach the civil courts for appropriate relief.”
Matlanyane said in any event, the police do not have powers to interdict the companies from continuing with operations.
“Criminal cases are notorious for taking years to complete. While the criminal case is unfolding the Respondents will continue to trade,” she said.
“Reporting the matter to the police is accordingly not a satisfactory alternative remedy. Only a court interdict will suffice in the circumstances.”

Senate Sekotlo

Previous School defrauded of M67 200
Next Ending the nightmare on our roads

Warning: count(): Parameter must be an array or an object that implements Countable in /home/thepostc/public_html/wp-content/themes/trendyblog-theme/includes/single/post-tags-categories.php on line 7

About author

You might also like

Local News

Soldiers’ murder case postponed

MASERU – THEY were arrested over 18 months ago and were charged with the brutal murder of three men in Ha-Motanyane village in Mafeteng district. The five, who are all

Local News

Judge faces ouster

MASERU – A storm is brewing against Acting Chief Justice ’Maseforo Mahase. Fresh from a barrage of attacks for her alleged bias in the All Basotho Convention (ABC)’s legal scuffles,

Local News

Panic over fuel shortages

MASERU – THERE was panic in Maseru yesterday after rumours there would be a critical shortage of petrol in the country starting this week. There were long queues at most filling