3Sixty Life was liquid, had met all liabilities and claims payments, and was awaiting the outcome of a court hearing following the release of a curatorship report that would outline the insurer’s recapitalisation.
This was according to acting CEO Khandani Msibi, who joined the insurance company that is owned by the National Union of Metalworkers in March last year. He said in a telephone interview yesterday they had put up R180 million in property, R130m of which was unencumbered, for the recapitalisation of 3Sixty.
He said the company had been hard hit by claims through the Covid-19 pandemic’s second and third waves in particular and had late last year breached its solvency and minimum capital requirements.
“At this stage we only had two options, liquidate the company or try and fix it. We are trying to fix it,” he said.
He said they initially planned a recapitalisation through the sale of an asset SALT Employee Benefits (SALT EB).
However this sale was blocked after the Financial Services Conduct Authority raised the same issues about SALT as it had raised, and subsequently approved, for the acquisition of the company by 3Sixty three years prior.
The plan to put up the property thus represented 3Sixty’s second recapitalisation option, and did not break any of the minimum asset requirements for regulatory capital. It would also comfortably meet the capital requirements, said Msibi.
He said the Prudential Authority had failed to take into account the second recapitalisation plan when it put 3Sixty under curatorship in December.
He said the properties had been independently valued, and the Prudential Authorities’ own valuer had subsequently valued the properties at more than what the valuers for 3Sixty had.
He said he was confident that if the curator’s report was aligned with the report submitted to court on February 21, he expected the court would rule that the company did not need to be under curatorship.
He said the company, which sells mainly funeral insurance plans, had been able to continue trading through the curatorship because it had developed its own distribution systems, which accounted for about 80 percent of premium income. The company was also an active investor in the healthcare and biochemical sector, he said.
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