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PIA Revises Insurers’ Minimum Capital for Insurance Firms

The Pensions and Insurance Authority has increased the minimum paid-up capital requirement for insurance companies and brokers in Zambia. This follows the signing of SI71 of 2015 by the Minister of Finance Hon Alexander Chikwanda on 2nd October 2015.
 
Re-insurance companies are required to increase their paid-up capital to a minimum level of K20, 000,000.00 from the previous K1, 000,000.00. Long term and general insurers are expected to increase their paid up capital to K12, 000,000.00 and K10, 000,000.00 respectively from K1, 000,000.00.
 
Brokers will also need to raise their paid up minimum capital from K50, 000.00 to K100, 000.00.
The transitional period for the entities to comply with the requirements of the Statutory Instrument shall be within a period of two years from the date of coming into force of the Statutory Instrument (2nd October 2015).
 
The move is targeted at building a solid, competitive and sustainable insurance sector as it will strengthen the financial base of the sector.
 
Capital forms the basis of financial strength for any insurance company and supports better risk management and market confidence.