The insurance industry in Fiji is concerned that the solvency requirements in the draft legislation currently under review will weaken the position of insurance companies in Fiji if it comes into place.
This was highlighted by Inia Naiyaga, the Managing Director of Sun Insurance while making submissions to the Parliamentary Standing Committee on Economic Affairs on the Reserve Bank of Fiji Insurance 2018 Annual Report.
Solvency means you have enough assets to pay off your liabilities and Naiyaga says if the draft legislation comes into play, the solvency of all insurance companies will reduce by half and some of the existing insurance companies may fall below the solvency requirements.
He adds shareholders will have to inject more capital into the company but if they fail to do so or meet the solvency requirements then the company will have to close down.
Naiyaga adds they have expressed their concerns with RBF and have been reassured discussions will continue with them before the Act is finalised.
He further says he is hopeful that an amicable solution is found when the final draft of the Act comes out hopefully by the middle of this year.
He says the Insurance Act came out in 1998 and it is 2020 now so there is always a need to review but review does not mean you have to change everything.
Naiyaga says insurance companies are required to submit a solvency report every three months to RBF.
The 1998 Insurance Act is currently being reviewed by the Reserve Bank Of Fiji in consultation with the insurance industry and stakeholders.
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