CHAPTER 46:01
INSURANCE INDUSTRY

ARRANGEMENT OF SECTIONS

   SECTION

PART I
Preliminary

   1.   Short title

   2.   Interpretation

PART II

   3. - 4.   ......

PART III
Capital and other Requirements for Insurers other than
Associations of Underwriters

   5.   Application of Part III

   6.   Insurer to be a resident company

   7.   Restrictions on general and long term insurers

   8.   Separation of insurers and brokers

   9.   Capital requirement

   10.   Margin of solvency

   11.   Statutory Reserve Solvency Account

PART IV
Provisions governing Insurers other than Associations of Underwriters

   12.   Application of Part IV

   13.   Licensing of an insurer

   14.   Exclusion of burial societies

   15.   ......

   16.   Licensing requirements

   16A.   Renewal of licence of an insurer

   17.   Restriction on insurers whose officers are deemed unsuitable

   18.   Grant of application

   19. - 22.   ......

   23.   Retentions and reinsurances

   24.   ......

   25.   Preservation of records

   26.   Amendment of accounts, etc.

   27.   Audit of accounts of insurers

   28.   Registrar's powers re commissions, deposit of funds and management expenses

   29.   Valuation of assets and liabilities

   30.   Change of financial year

   31.   Annual returns to the Registrar

   32.   Publication of authorised capital

   33.   Powers re restriction and instruction on insurers

   34.   Trusteeship of assets

   35.   Preferred creditors of an insurer

   36.   Insurers' code of practice

   37.   Classification

PART V
Association of Underwriters Licensed as Insurers

   38.   Application of Part V

   39.   Registrar to determine conditions for licensing

   40.   Association of underwriters to deposit sums or securities

   41.   Premiums received to be held in trust

   42.   Audit of accounts of an association of underwriters

PART VI
Third Party (Rights against Insurers)

   43.   Third party rights against insurers on bankruptcy, etc. of the insured

   44.   Duty to give necessary information to third parties

   45.   Settlement between insurers and insured persons

PART VII
Licensing Requirements of Insurance Brokers, Insurance Agents
and Agents for Brokers

   46.   Insurance brokers, agents and agents for brokers to be licensed

   47.   Agents to act for one principal only

   48.   Insurer's and broker's responsibility for agents

   49.   Licensing of agents

   49A.   Renewal of licence of an agent

   50.   ......

   51.   Restriction on broker's officers

   52.   Licensing requirements of insurance brokers

   52A.   Renewal of licence of an insurance broker

   53.   Grant of broker's application

   54.   Broker's capital requirements

   55.   Broker's responsibilities and insurance requirements

   56.   Broker's records and rights of access

   57.   Broker's responsibility for premiums

   58.   Broker's accounts

   59.   Cancellation of licence

   60.   ......

   61.   Financial year end of broker

   62.   Broker's amalgamations, sales and transfers

   63.   Broker's annual returns to the Registrar

   64.   Insurance brokers' code of conduct

PART VIII
Special Provisions relating to Long Term (Life) and
other Policies

   65.   Life insurance tables

   66.   Insurable interest essential for all policies

   67. - 68.   ......

   69.   Periodic actuarial investigations

   70.   Establishment of statutory life insurance fund

   71.   Application of assets of insurer with long term business

   72.   Restriction on transaction with connected persons

   73.   Exemption: Botswana Development Corporation

   74.   Reinsurance contracts of long term insurers

   75.   Allocations to policyholders

   76.   Investment unit policies

   77.   Life insurance of minors

   78.   Value of certain assets

   79.   Life policy effected by married persons

   80.   Life policy on own life: protection afforded during life

   81.   Life policy on own life: protection afforded on death

   82.   Protection afforded in respect of life policy inuring to spouse or children

   83.   Protection afforded in respect of life policy inuring to wife

   84.   Special provisions relating to persons married in community of property

   85.   Selection for realisation of life policies in respect of which protection is afforded

   86.   Partial realisation and partial conversion of life policies

   87.   Provisions in case premium on life policy ceded or trust policy cannot be maintained

   88.   Life policy ceded or premium paid with intent to benefit someone at the expense of a creditor

   89.   Power to pay into court

   90.   No deductions in respect of other life policies

   91.   Proof of age

   92.   Age incorrectly stated

   93.   Suicide

   94.   Lost or destroyed life policy

   95.   Life policy may include subsidiary benefits

   96.   Discrimination between life policies, etc. prohibited

   97.   Non-forfeiture of life policies in certain cases of non-payment of premiums

   98.   Paid-up policies

   99.   Surrender of policies

   100.   Cancellation of life policy within limited period without penalty

   101.   Publication of bonus rates and unit values

   102.   Advertisements and projected benefits

PART IX
Miscellaneous Provisions

   103.   Fatal accidents

   104.   Insurances to be held with Botswana insurers

   105.   Compulsory local brokerage

   106.   Unlimited indemnities prohibited

   107.   Commissions only to brokers and agents

   108.   Time limit on payment of premiums

   109.   Days of grace

   110.   Exemption

   111.   Extension of time

   112.   ......

   113.   Inspection of balance sheet by policyholder, etc.

   114.   Restriction on use of words "insurance" and "assurance"

   115.   No advertisement before licensing

   116.   Service of process

   117.   Enforcement of rights of policyholders

   118. - 121.   ......

   122.   Inspection of returns to the Registrar

   123.   ......

   124.   Continuation of business of insurer in liquidation

   125.   Secondary companies

   126.   False documents

   127.   Fees

   128.   Contraventions punisable by regulatory authority

   129.   Offences punishable by court

   130.   General penalty

   131.   Regulations

   132.   Application of Act

      First Schedule - Classes of Long Term Business

      Second Schedule - Classes of General Business

Act 21, 1987,
S.I. 120, 1990,
Act 17, 2003,
Act 2, 2007,
S.I. 11, 2008.

An Act to make provision relating to the carrying on of insurance business and other matters connected therewith.

[Date of Commencement:
ss 47, 52, 57(2), (3) and (4), and 105: 1st July, 1991;
s 54: 1st July, 1992;
the rest of the Act, except ss 104 and 106: 1st July, 1990;
ss 104 and 106: 22nd January, 2008
]

PART I
Preliminary (ss 1-2)

1.   Short title

   This Act may be cited as the Insurance Industry Act.

2.   Interpretation

   In this Act, unless the context otherwise requires-

   "actuary" means-

   (a)   a fellow of the Institute of Actuaries in England or of the Faculty of Actuaries in Scotland; or

   (b)   such other person having actuarial knowledge as the Registrar may approve;

   "agent" means the same as "insurance agent" herein described;

   "agent for broker" means a person who transacts insurance business on behalf of a registered insurance broker;

   "approved securities" means securities issued by the Government and such other securities or investments as the Registrar may approve;

   "associate", in relation to an applicant for licensing as an insurer or broker includes-

   (a)   the spouse or minor son or daughter of that person;

   (b)   any company of which that person is a director;

   (c)   any person who is an employee or partner of that person; or

   (d)   if that person is a company-

      (i)   any director of that company;

      (ii)   any subsidiary of that company;

      (iii)   any director or employee of any such subsidiary;

   "association of underwriters" means underwriters at Lloyd's of London;

   "broker" means the same as "insurance broker" herein described;

   "chairman", in relation to an association of persons, includes the individual presiding over the board of directors or other governing body of the association;

   "child" includes an illegitimate child, stepchild or a child adopted in accordance with the Adoption of Children Act, or in accordance with any enactment whatsoever, whether within or outside Botswana, relating to the adoption of children;

   "contingent obligation dependent on a human life" means-

   (a)   an obligation to pay to a particular person certain sums of money or to provide for a particular person certain other benefits-

      (i)   on the occurrence of death of a particular person or the birth of a child to a particular person at any time or within a specified period; or

      (ii)   in the event of a particular person continuing to live throughout a specified period; or

   (b)   an obligation assumed-

      (i)   until the death of a particular person; or

      (ii)   during a specified period or until the occurrence of the death of a particular person before the expiration of that period;

   "controller", in relation to an applicant for licensing as an insurer or broker, means-

   (a)   a Managing Director or Chief Executive of the applicant or of a body corporate of which the applicant is a subsidiary; or

   (b)   a person in accordance with whose directions or instructions the directors of the applicant or of a body corporate of which the applicant is a subsidiary are accustomed to act; or

   (c)   a person who either alone or with an associate or associates is entitled to exercise, or control the exercise of, one-third or more of the votes at any general meeting of the applicant or of any body corporate of which the applicant is a subsidiary;

   "controller", of a person or body corporate, other than in relation to an applicant for licensing as an insurer or broker means-

   (a)   a Managing Director or Chief Executive of a body corporate which is a subsidiary of the person or body corporate;

   (b)   a person in accordance with whose directions or instructions the directors of a body corporate which is a subsidiary of the person or body corporate are accustomed to act; or

   (c)   a person who either alone or with an associate or associates is entitled to exercise, or control the exercise of, 15 per cent or more of the votes at any general meeting of, or of a subsidiary of, a person or body corporate;

   "dependant", in relation to any person, includes his surviving spouse and any parent, child and grandchild of his;

   "deposit" means a deposit of money or anything having a monetary value which by virtue of the regulations made under this Act may be accepted as a deposit;

   "deposit administration policies" means a contract whereby-

   (a)   an insurer maintains a fund to which-

      (i)   is credited all amounts paid by the insured to the fund; and

      (ii)   is debited all amounts withdrawn from the fund to provide benefits in terms of the rules of the fund and such administrative and other expenses as are agreed upon between the insured and the insurer from time to time; and

      (iii)   such investment income and capital profits or losses as are agreed upon between the insured and the insurer as being for the account of the fund; and

   (b)   the liability of the insurer to the insured, at any given time, is limited to the amount standing to the credit of the fund;

   "director" includes an individual occupying the position of director or alternate director of an association of persons or a member or alternate member of a committee of management or of any other governing body of an association of persons, by whatever name he may be called;

   "financial year", in relation to an insurer, means each period of 12 months at the end of which the balance of the accounts is struck, and includes any lesser or greater periods as the Registrar shall approve;

   "friendly society" means an association of persons established with no share capital for the purpose of aiding its members or their dependants, where such association does not employ any person whose main occupation is the canvassing of other persons to become members of the association or the collecting of contributions or subscriptions from its members towards the funds of the association;

   "funeral policy" means a policy whereby the insurer assumes, in return for a premium or the promise of a premium, an obligation to provide, on the death of any person, benefits, not exceeding in value such amount as may be prescribed, which consist principally of provision for the funeral of that person or the grant to another person of some non-monetary benefit, whether or not the policy provides for-

   (a)   the payment at the option of the insurer or any other person of a sum of money instead of provision of a funeral or the grant of a non-monetary benefit; or

   (b)   the payment of a sum of money in addition to the provision of a funeral or the grant of some non-monetary benefit;

   "general business" has the meaning assigned to it under section 37;

   "gross profit" means the chargeable income of the insurer as ascertained under Part VI of the Income Tax Act;

   "insolvency" has the meaning assigned to it by the Insolvency Act;

   "insurance agent" means a person who solicits applications for insurance, collects moneys by way of premiums and acting in accordance with his agency agreement may bind the licensed insurer for whom he acts in the issue of insurance cover;

   "insurance broker" means persons, who acting with complete freedom as to their choice of undertaking, and for commission or other compensation and not being an agent of the insurer, bring together, with a view to the insurance or reinsurance of risks, persons seeking insurance or reinsurance and insurance or reinsurance undertakings, carry out work preparatory to the conclusion of contracts of insurance or reinsurance, and, where appropriate, assist in the administration and performance of such contracts, in particular in the event of a claim;

   "insurance business" includes assurance and reinsurance;

   "insurer" means a person carrying on an insurance business, otherwise than as a broker or agent, and includes an association of underwriters;

   "life insurance business" means the business of assuming the obligations of an insurer classified under section 37 as transacting long term business;

   "life insurance fund" means the fund established under section 70 to which the receipts of an insurer in respect of his life insurance business are carried;

   "life policy" means any contract of insurance made or agreed to be made by an insurer classified under section 37 as transacting long term business;

   "long term business" has the meaning assigned to it under section 37;

   "management expenses" means expenses incurred in the administration of an insurer which are not commission payable and, in the case of general insurance business, are not incurred in claims paid, claims outstanding, expenses for settling claims and expenses for settling claims outstanding;

   "manager", in relation to an applicant for licensing as an insurer or broker includes an employee of the applicant (other than a controller), who, under the immediate authority of a director or chief executive of the applicant exercises managerial functions or is responsible for maintaining accounts or other records of the applicant not exclusively related to business conducted from a place of business outside Botswana;

   "member of the insurance industry" includes an insurer, reinsurer, broker, agent, insurance surveyor, risk manager, loss assessor, loss adjuster and claims settlement agent, whether licensed under this Act or not;

   "minor" means a person who, by reason of his youth, is under a legal disability;

   "owner", in relation to a policy, means the person who for the time being has the legal title to the policy;

   "policy" includes every writing whereby any contract of insurance is made or agreed to be made;

   "prescribed" means prescribed by regulations made under section 131;

   "principal officer" means the person for the time being serving one principal officer and being responsible for the daily management of the principal officer in Botswana of the insurer, broker or agent;

   "Registrar" means the Regulatory Authority established under the Non-Bank Financial Institutions Regulatory Authority Act;

   "stock insurance company" means an insurance company with permanent share capital owned and controlled by its shareholders and includes a statutory corporation carrying on insurance business;

   "trustee", in relation to an estate in insolvency, includes an assignee or, as the case may be, a trustee in a deed of arrangement of the person having the conduct of an order of composition;

   "underwriter" includes any person named in a policy or other contract of insurance as liable to pay or contribute towards the payment of the sum secured by the policy or contract;

   "underwriter's liabilities", in relation to a member of an association of underwriters, means the liabilities of the insurance business of the member calculated in accordance with formulae fixed by the responsible body at Lloyds of London vested with the administration of the relevant insurance law.

PART II
Administration
(ss 3-4)

3. – 4.   ......

PART III
Capital and other Requirements for Insurers other than Associations of Underwriters
(ss 5-11)

5.   Application of Part III

   This Part shall apply only to insurers who are not associations of underwriters.

6.   Insurer to be a resident company

   No insurer may, after the coming into operation of this Act, be licensed as an insurer in Botswana unless it is incorporated as a company under the Companies Act and is deemed to be resident in Botswana.

7.   Restrictions on general and long term insurers

   (1) No individual insurer may transact both general and long term insurance business.

   (2) Any insurer who carries on business in contravention of this provision will be liable to have his licence cancelled.

   (3) An insurer transacting both general and long term insurance business immediately before the coming into operation of this Act shall be permitted to transact both general and long term insurance business for a period not exceeding one year from the date on which this Act comes into operation.

8.   Separation of insurers and brokers

   (1) No insurer shall register the transfer of more than five per cent of its shares to any person or body of persons directly or indirectly, wholly or partly owned or controlled by a Botswana licensed insurance broker or to any person or body of persons directly or indirectly by itself or through any nominee holding, at that time, any legal or equitable interest in any Botswana licensed broker or any person or body of persons associated with either.

   (2) No insurer shall directly or indirectly acquire or hold any legal interest or any equitable interest in excess of five per cent in any Botswana licensed insurance broker or in any company or partnership directly or indirectly by itself or through any nominee holding, at that time, any legal or equitable interest in any Botswana licensed broker or in any company or partnership associated with any such broker.

   (3) No Botswana licensed broker may permit any Botswana licensed insurer or person or body of persons directly or indirectly by itself or through any nominee holding, at that time, any legal or equitable interest in any Botswana licensed insurer, or any person or body of persons associated with either, to acquire or hold more than a five per cent interest in its business as a broker.

   (4) No person, company or body of persons who has a legal or equitable interest in or is owned, controlled or employed by-

   (a)   any Botswana licensed insurance broker; or

   (b)   any Botswana licensed insurer,

may be employed as the manager, controller, director or principal officer of a Botswana licensed insurer or broker respectively, nor may a Botswana licensed insurer or broker enter into any management agreement with any such person, company or body of persons.

   (5) Where at the coming into force of this Act an insurer or broker is in contravention of any of the provisions of subsections (1) to (4), such insurer or broker may, notwithstanding such contravention, be licensed under this Act for a period not exceeding two years.

9.   Capital requirement

   (1) The Minister shall prescribe the minimum paid-up share capital to be maintained by a licensed insurer.

   (2) For the purposes of subsection (1) the Minister may prescribe different amounts in respect of insurers transacting general business and insurers transacting long term business.

   (3) Every insurer shall transfer from its net profits of each year, before any dividend is declared and after due provision has been made for taxation, a sum not less than 25 per cent in the case of an insurer transacting long term business or 15 per cent in the case of an insurer transacting general business-

   (a)   to the paid-up share capital of the insurer; or

   (b)   to a Capital Reserve Account which account may be reduced only for the purpose of increasing the paid-up share capital of the insurer:

   Provided that an insurer shall not be required to transfer any part of its net profits if the aggregate of the paid-up capital and the Capital Reserve Account exceeds such sum as may be prescribed by the Minister:

   Provided also that the Capital Reserve Account shall be wholly utilised not less frequently than every five years to increase the paid-up share capital of the insurer.

   (4) Any licensed insurer who permits its paid-up share capital to be reduced to a level below that prescribed by the Minister or fails to increase capital in accordance with the requirements of subsection (3) shall be guilty of an offence and shall in addition to any other penalty prescribed by this Act be liable to have its licence cancelled.

   (5) The Minister may by regulations prescribe the form in which paid-up share capital may be maintained by an insurer.

10.   Margin of solvency

   (1) No insurer may carry on business as an insurer unless it maintains in Botswana at all times while it so carries on insurance business a margin of solvency of not less than such amount as may be prescribed.

   (2) Regulations may prescribe the method of calculating the assets and liabilities of an insurer for the purposes of this section.

   (3) Any insurer acting in contravention of this section shall be guilty of an offence and shall in addition to any penalty prescribed by this Act be liable to have its licence cancelled.

11.   Statutory Reserve Solvency Account

   (1) Upon the coming into force of this Act every licensed Botswana insurer transacting general business shall commence and maintain a statutory fund (to be known as the "Statutory Reserve Solvency Account"), and shall, in every year, before any dividend is declared, transfer to such account a sum equivalent to 10 per cent of its gross profits:

   Provided that, where the transfer of 10 per cent of its gross profits would result in the total sum in the account exceeding 25 per cent of the gross premiums received in the previous financial year, an insurer may transfer only so much as is necessary to raise the total sum in its account to a sum equivalent to 25 per cent of the gross premiums received in the previous financial year.

   (2) The Statutory Reserve Solvency Account shall be kept distinct and separate from all other accounts in the books of account and other records of the insurer.

   (3) The Statutory Reserve Solvency Account shall neither be reduced nor encumbered:

   Provided that the Registrar may by notice in writing to the insurer specify circumstances in which it may be reduced or encumbered.

   (4) No insurer shall at any time declare credit or pay any dividend or make any other transfer from profits other than a transfer to the Statutory Reserve Solvency Account until all encumbrances or reductions allowed by the Registrar under the provisions of subsection (3) have been removed.

PART IV
Provisions governing Insurers
other than Associations of Underwriters
(ss 12-37)

12.   Application of Part IV

   This Part shall apply only to insurers who are not associations of underwriters.

13.   Licensing of an insurer

   (1) Subject to the provisions of this Part, no person resident in Botswana shall commence or carry on insurance business unless he is licensed as an insurer under this Act.

   (2) An insurer resident in Botswana carrying on insurance business immediately before the commencement of this Act may, within three months after such commencement, make an application for a licence under this Act, and may, until the grant or refusal of its application, continue to carry on its insurance business.

14.   Exclusion of burial societies

   (1) The provisions of this Act shall not apply to burial societies, registered under the Societies Act.

   (2) Notwithstanding the provisions of subsection (1), section 119 of the Act shall apply to burial societies.

15.   ......

16.   Licensing requirements

   An insurer seeking a licence shall satisfy the Registrar that-

   (a)   it is a company registered under the Companies Act;

   (b)   it has a principal office in Botswana;

   (c)   its controller, manager, principal officer and directors who handle the day to day management of the company are all resident in Botswana; and that

   (d)   its controller, manager and principal officer are persons with sufficient business and insurance knowledge and experience.

16A.   Renewal of licence of an insurer

   (1) Every insurer shall, immediately after a period of 12 months has expired from his initial licensing, apply to the Registrar in such form as may be prescribed to renew such licence for a further period of 12 months.

   (2) An insurer shall thereafter apply to the Registrar to renew his licence whenever a period of 12 months has expired from his previous renewal of licence.

   (3) Where an insurer does not renew his licence when it expires, he shall pay, to the Registrar, a penalty of P150 per day during the period he does not renew his licence, which period shall not exceed three months.

   (4) Where an insurer does not renew his licence within three months of its expiry, the Registrar shall cancel that licence.

   (5) Where the licence of an insurer is cancelled, the insurer shall re-apply for a licence, which re-application shall be treated as a new application for a licence.

17.   Restriction on insurers whose officers are deemed unsuitable

   No insurer may employ as its manager, controller or principal officer any person who-

   (a)   has been adjudged an undischarged bankrupt in any country;

   (b)   has made an assignment to or arrangement or composition with creditors which has not been rescinded or set aside;

   (c)   has been convicted by any court in any country of an offence involving dishonesty; or

   (d)   is in the opinion of the Registrar an unfit person to hold the office.

18.   Grant of application

   (1) If the Registrar is satisfied that-

   (a)   the class or classes of insurance business in respect of which the application is made will be conducted in accordance with sound insurance principles;

   (b)   the relevant capital requirements for insurers are adequate, having regard to any regulations made in relation thereto under section 9, have been complied with by the applicant;

   (c)   the margin of solvency of the insurer is adequate having regard to any regulations made in relation thereto under section 10; and

   (d)   the applicant complies with the requirements of Parts III and IV of this Act,

the Registrar may grant the application for a licence as an insurer and issue the prescribed licensing certificate.

   (2) A notice of the grant under this section of every application shall be published in the Gazette.

19. – 22.   ......

23.   Retentions and reinsurances

   (1) The Registrar may by stipulating in writing to the insurer set limits within which a licensed insurer may accept insurances of all or any class by-

   (a)   restricting the gross premiums received by an insurer to a specified maximum in any one financial year; or

   (b)   restricting the gross premiums less gross reinsurances payable by an insurer to a specified maximum.

   (2) The Registrar may by stipulating in writing to an insurer prohibit a licensed insurer from transacting any individual policy or all insurance of a class or classes where-

   (a)   in the opinion of the Registrar the arrangements for reinsurance in respect of which persons, property or interests are, or are to be, insured by the insurer in the course of carrying on insurance business are not favourable to the economy or the insurance industry or are not in the public interest; or

   (b)   in the opinion of the Registrar the gross or net retention limits are too low or too high.

   (3) The Registrar, having regard to such matters as he considers relevant, may, by notice in writing to the insurer, exempt an insurer, subject to such terms and conditions and for such period as he specifies in the notice, from the requirements of this section.

24.   ......

25.   Preservation of records

   An insurer shall maintain all records or accurate transcriptions of all records relating to insurance transactions inside and outside Botswana undertaken by it, for a minimum period of six years-

   (a)   in the case of a life policy, after the maturity, cancellation, surrender or realisation of the policy or after the death of the insured;

   (b)   in all other cases after the maturity, cancellation or realisation of the policy or date of loss.

26.   Amendment of accounts, etc.

   (1) If, in the opinion of the Registrar, an account or balance sheet furnished by a licensed insurer under section 31 is incorrect or is not prepared as prescribed, the Registrar may, by notice in writing, call upon the insurer to amend such account or balance sheet, to furnish a correct account or balance sheet, or, as the case may be, an account or balance sheet prepared as prescribed under section 31.

   (2) If a licensed insurer fails to comply with a notice referred to in subsection (1) to the satisfaction of the Registrar, the Registrar may himself either amend the account or balance sheet giving the insurer particulars of the amendments, or he may reject the account or balance sheet.

   (3) An account or balance sheet amended by an insurer or the Registrar under this section shall be treated as if it had been originally submitted in its amended form.

27.   Audit of accounts of insurers

   (1) The accounts of every licensed insurer shall be audited annually by a resident auditor approved by the Registrar.

   (2) The form of an audit referred to in subsection (1) shall be in accordance with the requirements of the Companies Act and shall contain such other information or such additional declarations as the Minister may by regulations prescribe.

28.   Registrar's powers re commissions, deposit of funds and management expenses

   (1) The Registrar may, by notice in the Gazette, determine the minimum and maximum commission rates payable by insurers to other insurers, brokers or agents in respect of all or any class of insurance whether insurance or reinsurance.

   (2) The Registrar may, by notice in writing, require an insurer to deposit in the Bank of Botswana, within such time as the Registrar shall consider reasonable, such securities as the Registrar shall stipulate in the said requisition in respect of any or each class of insurance business being carried on by that insurer.

   (3) After consideration of the extent and duration of the business carried on by an insurer and the provision generally made for management expenses in the premium rates of insurers, the Registrar may-

   (a)   by notice published in the Gazette require insurers to limit their management expenses to an amount contained in the notice;

   (b)   by notice in writing to an insurer allow dispensation from the provisions of paragraph (a) to any other amount and for any period as the Registrar shall consider reasonable except that such period shall not exceed two consecutive years.

29.   Valuation of assets and liabilities

   (1) The Minister may make regulations with respect to the determination of the value of assets and the amount of liabilities in any case in which the value or amount is required by any provision of this Act to be determined in accordance with valuation regulations.

   (2) Without prejudice to the provisions of subsection (1), regulations made under this section may provide that, for any specified purpose, assets or liabilities of any specified class or description shall be left out of account or shall be taken into account only to a specified extent.

   (3) For the purposes of this section the Minister may make separate regulations for the determination of the value of assets and the amount of liabilities of general and long term insurers.

30.   Change of financial year

   The financial year of an insurer may be changed by the insurer with the approval of the Registrar.

31.   Annual returns to the Registrar

   (1) An insurer shall, within four months after the end of its financial year furnish to the Registrar in the prescribed forms-

   (a)   an audited balance sheet and profit and loss account;

   (b)   an audited income and expenditure statement for each category of insurance underwritten;

   (c)   an audited statement of solvency;

   (d)   an audited statement of all admissible and inadmissible assets; and

   (e)   all such other information as he may require.

   (2) The Registrar may, at his discretion, extend the time within which the insurer should comply with the provisions of subsection (1) by a maximum of three months:

   Provided that an insurer shall be liable to pay to the Registrar a penalty of P150 for every day during which it is in default beyond such extended time granted by the Registrar.

   (3) Where the insurer fails to furnish the required documents and information within the extended time or fails to pay the penalty, the insurer shall be regarded as having failed to comply with the provisions of subsection (1).

32.   Publication of authorised capital

   An insurer shall not publish or issue a document on which is printed a statement-

   (a)   of its authorised share capital, unless the statement also sets forth the amount of its subscribed capital and of its paid-up capital; or

   (b)   of its subscribed capital, unless the statement also sets forth the amount of its paid-up capital.

33.   Powers re restriction and instruction on insurers

   (1) The Minister may by regulations-

   (a)   prohibit an insurer from making investments of a specified class or description;

   (b)   require an insurer to realise the whole or part of a particular investment within a specified period;

   (c)   require an insurer or all insurers to invest such percentage of the insurance funds of such insurers or insurer, as the case may be, accruing in respect of their or its insurance business in Botswana or assets representing the Statutory Reserve Solvency Account in such Botswana securities and such other securities in Botswana, as may be specified.

   (2) An instrument made under subsection (1) may prescribe different percentages of such insurance funds to be so invested according to the class or description of an insurer, and may prescribe different percentages for local insurers.

   (3) Except with the prior express consent in writing of the Registrar, no insurer shall invest or otherwise lend insurance fund moneys outside Botswana.

   (4) An insurer may-

   (a)   borrow any money, whether secured or unsecured;

   (b)   guarantee or bind itself as surety for the discharge of any debt or obligation of any person or body of persons, or issue any bond, guarantee or undertaking provided it is licensed to carry on such guarantee business and the guarantee or undertaking is incorporated in a guarantee policy,

except that where it mortgages or charges assets-

   (i)   exceeding 20 per cent of the aggregate of its paid up share capital and Capital Reserve Account in the case of an insurer other than an insurer carrying on long term insurance business in order to secure for itself temporary loans or bank overdrafts; or

   (ii)   exceeding 25 per cent of the aggregate life insurance funds or four times the aggregate of its paid up share capital and Capital Reserve Account, whichever is less in the case of an insurer carrying on long term insurance business in order to secure loans for itself,

it shall notify the Registrar in writing within one month of so doing and shall provide the Registrar with such information as the Registrar may require relating thereto.

   (5) The Minister may, by statutory instrument, make an order enjoining the Registrar himself to take or require an insurer to take such action as appears to the Registrar appropriate to protect the policyholders of the insurer against the risk that the insurer may be unable to meet its liabilities, or in the case of an insurer transacting long term business, to fulfil the reasonable expectations of the policyholders.

34.   Trusteeship of assets

   (1) The Registrar may, at any time before or during the course of an investigation in terms of section 112, require an insurer to transfer all or a specified portion of its assets into a trust to be administered by a person nominated by the Registrar.

   (2) Except with the prior consent of the Registrar the assets subject to trusteeship in subsection (1) shall not be mortgaged, pledged or otherwise encumbered in any manner whatsoever in favour of any other person.

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