Withdrawal of IGF’s insurance licence with effect from 24 August 2020
Following discussions between IGF, the Prudential Authority (PA) and the Financial Sector Conduct Authority during the course of this year, the Authorities have withdrawn IGF’s (non-life) insurance licence in terms of section 29(1)(b)(iii) of the Insurance Act 2017, read section 122 of the Financial Sector Regulation Act 2017, with effect from 24 August 2020, instead of converting IGF's licence in terms of the provisions of the Insurance Act. The withdrawal of IGF’s insurance licence does not affect the prescription period outlined above.
The conditions that attach to the withdrawal of IGF's insurance licence include:
IGF's Board takes responsibility for the implementation and management of a relevant claims handling process, in respect of any claims notified during the prescription period. To this end a Claims Board Committee has been constituted which will operate in terms of IGF Board-approved Terms of Reference.
IGF submits to the PA a bi-annual report confirming any claims notified during the reporting period, the status of those claims at the end of the reporting period and the status of the IGF assets at the end of the period. The first such report is due on 31 January 2021, for the six-month period ending 31 December 2020.
IGF must review all company documentation to remove the word “insurance" or any derivative thereof so as not to give the impression to the general public that IGF is an operational non-life insurer, and communicate all changes made in this regard to the PA by 24 November 2020.
Process for the return of collateral security
The process of returning collateral security held by IGF is under way and progressing. IGF aims to have returned all collateral security by the time liability under the last guarantees prescribes on 31 March 2022, and the company can be finally wound-up.
The process encompasses:
Returning old collateral security that was required to issue IGF guarantees in the past, which guarantees are not subject to the three-year prescription period ending 31 March 2022, i.e. liability for claims under the relevant guarantee has already prescribed.
Returning current collateral security that was required to issue IGF guarantees in the past, which guarantees are still subject to the 3-year prescription period ending 31 March 2022, BUT where the necessary indemnifications of IGF have been received from the insurers and the relevant intermediary concerned, as well as the requisite letter of confirmation from the intermediary’s auditor confirming that there are no outstanding premiums due to the insurer/s up to and including 31 March 2019.
We will keep IGF stakeholders informed of any further developments.