The Sunday News
Nqobizitha Dhlamini Business Reporter
WORKERS of suspended insurance company Altfin Insurance who have been at loggerheads with their employer over unpaid wages will have their issue handled at the High Court after the company was placed under provisional judicial management.
The company was suspended from writing new business with effect from 14 April 2014 by the Insurance and Pension Commission as a way to protect existing and prospective policyholders as the insurer had failed to settle claims for insurance policies it had issued and inadequate capitalisation mainly owing to the fact that some of its investments were encumbered.
The company’s general manager Mr Mapiye Chigorondondo had previously said his company would pay the workers’ salaries when it got the funds as they were concentrating on settling claims.
“All clients, employees and any other liabilities incurred before the provisional judicial management order was granted will be claimed through the High Court and handled by the judicial manager,” he said in a statement to Sunday Business.
“The judicial management order has since frozen all obligations that we had with the creditors. All amounts owed to creditors including the employees before the judicial management order was granted are frozen,” he said.
Mr Chigorondondo also said the order froze all obligations but did not terminate contracts of employment.
“The Labour Act continues to apply under Judicial Management and termination of employment will be done the normal way, via human resources or automatically if the company goes under liquidation,” he said.
Mr Chigorondondo went on to blame the economic situation for the failure of the insurance industry.
“The challenges facing the insurance industry are not peculiar, they must be viewed in the entirety of the Zimbabwean economy. The insurance industry follows the fortunes of the other industries such as mining,
manufacturing, retail etc therefore this means that if these industries are not performing the insurance industry also suffers.
It is of importance that other industries are revived for the insurance industry to also perform,” he said.
Major weaknesses facing most institutions, he said, were due to poor levels of capital and also the poor quality of assets supporting most balance sheets.
“The lack of liquidity within the economy has further dampened the potential to improve the mix and the balance of assets resulting in most institutions tethering, of concern has been the softening of insurance premium rates which has been perpetuated by the limited cash circulating within the economy, these rates are not sustainable considering the entire premium pool,” he said.
