Supplement to the Republic of Zambia Government
Gazette dated Friday, 30th December, 2022
1407
GOVERNMENT OF ZAMBIA
STATUTORY INSTRUMENT NO. 105 OF 2022
The Insurance Act, 2021
(Act No. 38 of 2021)
The Insurance (General) Regulations, 2022
ARRANGEMENT OF REGULATIONS
PART I
PRELIMINARY PROVISIONS
Regulation
1.
Title
2.
Interpretation
3.
Non-application of Regulations
PART II
LICENSING OF INSURERS, REINSURERS AND INTERMEDIARIES
4.
Application
5.
Classes of long-term and general insurance business
6.
Application for licence for insurers and reinsurers
7.
Consideration of application for insurer and reinsurer
8.
Grant of insurance and reinsurance licence
9.
Application for insurance brokering licence
10. Grant of insurance brokering licence
11. Application for an intermediary licence
12. Grant of intermediary licence
13. Consideration of application for intermediaries
14. Restriction on business of insurance brokers
15. Restriction on business of insurance agency business
16. Restriction on licence of intermediary
Copies of this Statutory Instrument can be obtained from the Government Printer,
P.O. Box 30136, 10101, Lusaka, Price K136.00 each
1408
Statutory Instruments
30th December, 2022
17. Amendment of Licence
18. Lost or damaged Licence
19. Suspension and cancellation of Licence
20. Register of Licensees
PART III
FIT AND PROPER PERSON
21. Criteria of fit and proper person
22. Appointment of directors and officers
23. Qualifications of senior officers
PART IV
CAPITAL ADEQUACY AND INSOLVENCY
24. Solvency margin and capital adequacy requirements
25. Determination of available capital
26. Minimum capital adequacy for general licensed insurer
or reinsurer
27. Minimum capital adequacy for long term insurer or
reinsurer
28. Determination of ordinary capital adequacy requirement
for long term
insurer or reinsurer
29. Determination of liabilities
30. Reserves for unexpired risk
31. Reserves for outstanding claims
32. Investment concentration limits
33. Solvency Statement
34 Transitional period of this Part
PART V
GENERAL PROVISIONS
35. Commencement of business after issuance of licence
36. Request for information
37. Shareholding
38. Fees
39. Guidelines
SCHEDULES
30th December, 2022
Statutory Instruments
1409
IN EXERCISE of the powers contained in section 179 of the
Insurance Act, the following Regulations are made:
1. These Regulations may be cited as the Insurance (General)
Regulations, 2022.
2. In these Regulations, unless the context otherwise requires—
Title
Interpretation
“365th method” means a method that assumes that the risk is
spread evenly over the 365 days of a year of cover;
“affiliate” means any one of two companies
(a)
which is a subsidiary of the other;
(b)
which is a holding company of the other; or
(c) both of which are subsidiaries of another company;
“Authority” has the meaning assigned to the word in the Act;
“available capital” means the excess assets that remain after
total liabilities and disallowable assets are removed;
“beneficial owner” has the meaning assigned to the words in
the Companies Act, 2017;
“best estimate assumption” means an assumption that—
(a)
is realistic;
(b)
depends on the nature of the business concerned;
(c) reflects anticipated experience with no provision
for risk of adverse deviations; and
(d)
is determined by immediate past experience, or
modified by any knowledge or expectation of the
future;
“capital adequacy requirement” means an amountthat shall
ensure that the liabilities of the insurer under each policy is
less than the amount that shall become available to
policyholders when an insurer ceases to operate or make
new business;
“capital adequacy requirement ratio” means the ratio of
available capital to minimum capital requirements;
“chain ladder method” means a technique that uses past
experience data to forecast or determine the amount of
claim reserves that an insurer or reinsurer should maintain;
“claims not reported” means a reserve in respect of the claims
that occurred before the end of the financial year that have
not been reported;
Act No. 10
of 2017
1410
Act No. 41 of
2016
Statutory Instruments
30th December, 2022
“collective investment scheme” has the meaning assigned to
the words under the Securities Act, 2016;
“compulsory margins” means the margins that are used to
determine the value of liabilities as provided in the Fifth
Schedule;
“disallowable assets” means—
(a)
goodwill and other intangible assets;
(b)
deferred tax income or expenses and current tax
assets or future income tax credits;
(c) branding and research and development costs;
(d) assets pledged to support credit facilities obtained
by related parties;
(e) any asset title which is held by a person other
than the insurer or reinsurer;
(f) any asset that is a mortgage or charged for the
benefit of a person other than the insurer;
(g)
a guarantee given to the insurer, other than a
guarantee given by a reinsurer;
(h)
loans to agents, directors, associates, related
parties and shareholders of the insurer or
reinsurer;
(i) surplus or deficit of right of use assets over lease
liability;
(j)
prepayments;
(k) receivables from related parties;
(l) receivables outstanding from insurance brokers for
more than fourteen days;
(m) merchandise inventory and corporate stationary;
(n)
any implicit accounting assets;
(o)
deferred acquisition costs; or
(p) any other assets that the Authority may determine;
“fit and proper person” means a person who meets the criteria
set out in regulation 21;
“minimum capital adequacy requirement” means the capital
that is required to be held by an insurer or reinsurer under
regulations 26 and 27;
30th December, 2022
Statutory Instruments
1411
“general insurance business” means insurance business
comprising the classes of business specified in regulation
5;
“intermediary engagement policy” means a policy developed
by an insurer outlining detailed requirements for the
engagement of intermediaries;
“long term insurance business” means insurance business
comprising the classes of business specified in regulation
5;
“property” includes direct investment in investment properties,
mortgages, land and building for an insurer’s own use;
“ordinary capital adequacy requirement” means a factor
based approach that establishes capital that is needed to
be held in respect of each major risk category isolated
and whose formula and list of categories is set out in the
Fifth Schedule;
“related party” means a person that is related to a licensee if
that person has control or significant influence over the
licensee or is a senior officer;
“reserves for unexpired risk” means a reserve to cover the
claims and expenses relating to unexpired periods of risk
for which the insurer has already received premiums that
are considered inadequate;
“termination capital adequacy requirement” means the
summation of the lapse capital adequacy requirement and
the surrender capital adequacy requirement where—
(a) the lapse capital adequacy requirement, for policies
without surrender value, is the amount required to
ensure that no policy has a negative liability, where
liability refers to the statutory liability before
considering any other capital adequacy
requirements; and
(b)
the surrender capital adequacy requirement is the
amount required to ensure that a policy’s liability
is not less than its current surrender value, provided
that for a policy which cannot be surrendered or
transferred from the long term insurer, the amount
is zero;
“shareholder” has the meaning assigned to words in the
Companies Act, 2017;
“senior officers” has the meaning assigned to the words in
the Act;
Act No. 10
of 2017
1412
Statutory Instruments
30th December, 2022
“significant shareholder” means a person who holds at least
ten percent of ordinary
shares or has voting rights exceeding ten percent in a licensee;
“solvency margin” means the excess of available capital over
minimum capital requirements; and
“undertaking” means a commitment, business contingency
recovery plan or promise.
Nonapplication
of regulations
3. These Regulations shall not apply to microinsurance.
PART II
LINCESING OF INSURERS, REINSURERS AND INTERMEDIAIRES
Application
4. This Part shall apply to a person making an application for
the following types of insurance services:
(a) insurance;
(b) reinsurance;
(c) insurance brokering;
(d) loss adjustering
(e) risk surveyor;
(f) assessor;
(g) claims agency;
(h) insurance agency; and
(i) underwriting agency.
Classes of
long-term and
general
insurance
business
Application
for insurance
or reinsurance
licence
5. Long term insurance business and General insurance
business shall comprise of the classes and sub classes of insurance
business set out in the First Schedule.
6. (1) A person who intends to provide an insurance or
reinsurance service shall apply to the Authority for an insurance
or reinsurance licence in Form I set out in the Second Schedule on
payment of a fee set out in the Third Schedule.
(2) An application referred to in subregulation (1), shall be
accompanied by—
(a)
a certified copy of the applicant’s certificate of
incorporation, certificate of share capital and articles
of association;
(b)
the details of the beneficial owners;
(c) a group structure, in the case of an applicant that has
an affiliate, associate holding or subsidiary company,
showing
30th December, 2022
Statutory Instruments
(i) the affiliate, associate holding or subsidiary company;
(ii)
the position of each affiliate, associate holding or
subsidiary company;
(iii)
the relationship between the affiliate, associate
holding or subsidiary company and the applicant;
(iv)
the shareholding held by each affiliate, associate
holding or subsidiary company;
(v) a general description of the activities of each affiliate,
associate holding or subsidiary company; and
(vi)
(d)
the details of significant shareholders including
beneficial owners;
the details of proposed auditors and actuaries;
(e) a board resolution appointing the principal officer;
(f) a power of attorney executed in favour of the proposed
principal officer;
(g)
a complete application for approval of appointment for
the principal officer, director and senior officer;
(h)
a complete fit and proper test questionnaire for a
significant shareholder;
(i) the business plan and financial statement projections
covering a minimum period of five years;
(j) the proposed premium rates that the applicant intends to
apply for each class of business;
(k) a certificate by an actuary that the premium rates, terms
and conditions are suitable and sustainable for long term
insurance business;
(l)
the most recent audited financial statements of the
applicant including the audited financial statements of
the applicant’s holding company and the consolidated
group financial statements, if any;
(m) details of the proposed reinsurance arrangement in the
case of an insurer or the proposed retrocession
arrangement in the case of a reinsurer;
(n)
a proposed intermediary engagement policy;
(o)
proof of adequate funds to meet the minimum capital
adequacy requirement;
(p)
a declaration of the source of funds of the applicant;
1413
1414
Statutory Instruments
30th December, 2022
(q) proof of directors and officers liability cover to the sum
assured of the minimum capital adequacy requirement;
and
(r) proof of membership to the Insurers Association of
Zambia.
(3) An insurer making an application under subregulation (1)
shall indicate the category and class of insurance business the
applicant intends to engage in.
Consideration
of
application
for insurer
and reinsurer
Grant of
insurance
and
reinsurance
licence
7. The Authority shall, when considering an application under
regulation 6, satisfy itself that
(a)
the applicant’s ownership, corporate and management
structure, governance framework, procedures and
controls or proposed procedures and controls, financial
resources and its proposed reinsurance or retrocession
arrangements, are appropriate having regard to the
proposed insurance business of the applicant; and
(b)
the applicant’s significant shareholders, directors and
proposed senior officers are fit and proper persons who
satisfy the criteria of the fit and proper persons specified
under regulation 21.
8. (1) The Authority shall, where the applicant meets the
requirements of the Act and these Regulations, approve an
application under regulation 6 and issue the applicant with an
insurance or reinsurance licence in Form II set out in the Second
Schedule.
(2) The Authority shall, where the Authority rejects an
application under regulation 6, notify the applicant in Form III set
out in the Second Schedule.
Application
for
insurance
brokering
licence
9. (1) A person who intends to provide an insurance brokering
service shall apply to the Authority for an insurance brokering
licence in Form IV set out in the Second Schedule on payment of
a fee set out in the Third Schedule.
(2) An application referred to in subregulation (1), shall be
accompanied by—
(a)
a certified copy of the company’s certificate of
incorporation, certificate of share capital, and articles
of association;
(b)
a group structure, in the case of an applicant that has
an affiliate, associate holding or subsidiary company
indicating
30th December, 2022
Statutory Instruments
1415
(i) the affiliate, associate holding or subsidiary company;
(ii)
the position of each affiliate, associate holding or
subsidiary company;
(iii)
the relationship between the affiliate, associate
holding or subsidiary company and the applicant;
(iv)
the shareholding held by each affiliate, associate
holding or subsidiary company;
(v) a general description of the activities of each affiliate,
associate holding or subsidiary company; and
(vi)
the details of significant shareholders including
beneficial owners;
(c) the details of proposed auditors;
(d) a board resolution appointing the principal officer;
(e) a power of attorney executed in favour of the proposed
principal officer;
(f) a complete application for approval of appointment for
the principal officer, director and senior officer;
(g)
a complete fit and proper test questionnaire for a
significant shareholder;
(h)
the business plan and financial projections, covering a
minimum period of three years;
(i) evidence of separate client and operations bank accounts;
(j)
proof of sufficient funds for operations as the Authority
may determine;
(k) a declaration of the source of funds of the applicant;
(l)
proof of professional indemnity and fidelity guarantee
cover to the sum assured as the Authority may
determine; and
(m) proof of membership to the Insurance Brokers
Association of Zambia.
10. (1) The Authority shall, where the applicant meets the
requirements of the Act and these Regulations, approve an
application under regulation 9 and issue the applicant with an
insurance brokering licence in Form V set out in the Second
Schedule.
(2) The Authority shall, where the Authority rejects an
application under regulation 9, notify the applicant in Form III set
out in the Second Schedule.
Grant of
insurance
brokering
licence
1416
Application
for an
intermediary
licence
Statutory Instruments
30th December, 2022
11. (1) A person who intends to provide an insurance service
of loss adjustering, risk surveyor, assessor, insurance agency,
underwriting agency or claims agency shall apply to the Authority
for an intermediary licence in Form VI set out in the Second
Schedule on payment of a fee set out in the Third Schedule.
(2) An application referred to in subregulation (1), shall be
accompanied by—
(a)
a certified copy of the company’s certificate of
incorporation, certificate of share capital and articles
of association, in the case of a company;
(b)
proof of registration of a business name, in the case of
an individual;
(c) a board resolution appointing the principal officer, in the
case of a company;
(d)
a power of attorney executed in favour of the proposed
principal officer;
(e) a complete application for approval of appointment for
the principal officer, director and senior officer;
Grant of
Intermediary
licence
(f)
a complete fit and proper test questionnaire for a
significant shareholder; and
(g)
any other documents as the Registrar may determine.
12. (1) The Authority shall, where the applicant meets the
requirements of the Act and these Regulations, approve an
application under regulation 11 and issue the applicant with an
intermediary licence in Form VII set out in the Second Schedule.
(2) The Authority shall, where the Authority rejects an
application under regulation 11, notify the applicant in Form III set
out in the Second Schedule.
Consideration
of
application
for
intermediaries
13. The Authority shall, when considering an application under
regulations 9 and 11, satisfy itself that the applicant’s principal
officer, shareholders, directors and proposed senior officers are fit
and proper persons that satisfy the requirement of fit and proper
persons specified under regulation 21.
Restriction
on business
of insurance
brokers
14. An insurance broker shall carry on business, other than
insurance brokerage, if—
(a)
the Registrar has, in writing, approved the business as
reasonably ancillary to the insurance brokeragecarried
on by the insurance broker; and
30th December, 2022
(b)
Statutory Instruments
1417
the proportion of turnover of the insurance broker
attributable to the non insurance business does not
exceed a specified percentage as determined by the
Authority.
15. (1) A licensed insurance agent shall not act on behalf of
more than one insurer in the same category of insurance business.
(2) Despite the generality of subregulation (1), a licensed
insurance agent may act as an agent for a long term insurer and a
general insurer.
Restriction
on insurance
agency
business
16. The Authority shall not issue a licence to a licensed
intermediary to carry on an insurance service that the licensed
intermediary is not licensed to carry on.
Restriction
on licence of
intermediary
17. A licensee may, within the validity of the licence, apply to
the Authority for an amendment to the licence in Form VIII set
out in the Second Schedule on payment of a fee set out in the
Third Schedule.
Amendment
of licence
18. A licensee whose licence is lost or damaged shall apply to
the Authority for a duplicate licence in Form IX set out in the
Second Schedule on payment of a fee set out in the Third Schedule.
Lost or
damaged
licence
19. (1) The Authority shall, where the Authority intends to
suspend or cancel a licence issued under these Regulations, notify
the licensee of its intention to suspend or cancel the licence in
Form X set out in the Second Schedule.
Suspension
and
cancellation
of licence
(2) The Authority shall notify a licensee of the Authority’s
decision to suspend or cancel a licence in Form XI set out in the
Second Schedule.
20. The Authority shall establish and maintain a register of
licensees which shall contain the following:
(a)
the name, address and contact details of a licensee;
(b)
the category of insurance business of a licensee;
(c) whether a licensee is an individual operating under a
business name or a company;
(d)
the licence reference number of a licensee;
(e) types of insurance service or other service indicated in
the licence;
(f) date of approval of the licence; and
(g)
any other details as the Authority may determine.
Register of
licensees
1418
Statutory Instruments
30th December, 2022
PART III
FIT AND PROPER PERSON
Criteria of fit
and proper
person
21. (1) A shareholder shall be considered to be a fit and proper
person if that shareholder—
(a)
demonstrates financial soundness;
(b)
discloses sources of funding;
(c) has access to additional capital;
(d)
has integrity demonstrated through personal or
corporate character references;
(e) is not declared bankrupt;
(f) has not been convicted of an offence involving fraud,
dishonesty or other financial crimes under the Act or
any other written law; and
(g)
has no record of misconduct in the financial sector.
(2) A director or senior officer shall be considered to be a fit
and proper person if that director or senior officer—
(a)
demonstrates competence, skill and experience;
(b)
has integrity demonstrated through personal or
corporate character references;
(c) is not declared bankrupt;
(d)
has not been convicted of an offence involving fraud,
dishonesty or other financial crimes under the Act or
any other written law; and
(e) has no record of misconduct in the financial sector.
Appointment
of directors
and senior
officers
22. (1) A licensee that appoints a director, chief executive
officer and other senior officers, shall apply to the Registrar for
approval of each appointment in Form XII set out in the Second
Schedule.
(2) The Registrar shall, in considering an application under
subregulation (1), determine whether the appointed person is a fit
and proper person in accordance with regulation 21.
(3) A licensee shall notify the Registrar, in writing, when there
is a change in the details submitted in the application referred to
under subregulation (1).
30th December, 2022
Statutory Instruments
1419
(4) The Registrar may, where the Registrar has reason to
believe that the information submitted in the application referred to
in subregulation (1) has changed, request the licensee to resubmit
Form XII.
(5) The Registrar shall, where the Authority approves an
application under subregulation (1) and the application meets the
requirements of the Act and these Regulations, issue an approval
of appointment in Form XIII set out in the Second Schedule.
(6) The Registrar shall, where the Registrar rejects an
application under subregulation (1), inform the applicant within
fourteen days from the date of the decision of rejection in Form
XIII set out in the Second Schedule.
23. (1) A senior officer shall meet the qualifications set out in
the Fourth Schedule.
(2) A senior officer who immediately before the appointed
date was appointed in accordance with the repealed Act shall,
within a period of four years, comply with this regulation.
Qualifications
of senior
officers
PART IV
CAPITAL ADEQUANCY AND SOLVENCY
24. (1) A licensed insurer or reinsurer shall have a solvency
margin of at least ten percent.
(2) A licensed insurer or reinsurer shall maintain a capital
adequacy requirement ratio of at least one hundred and fifty percent.
(3) Capital adequacy requirement shall be determined using
the method set out in the Fifth Schedule.
(4) A licensed insurer or reinsurer shall, where a licensed
insurer or reinsurer projects capital adequacy requirement ratio
and solvency margin is likely to fall below the margins referred to
in subregulations (1) and (2), notify the Authority, in writing, and
provide an undertaking of how the licensed insurer or reinsurer
intends to address and restore the financial soundness of that
licensed insurer or reinsurer.
(5) The Authority may approve an undertaking submitted
under subregulation (4), if the Authority is satisfied that the
undertaking shall address and restore the financial soundness of
the insurer or reinsurer.
(6) An undertaking approved by the Authority under
subregulation (5) shall have effect as if the undertaking were a
directive of the Authority.
Solvency
margin and
capital
adequacy
requirements
1420
Determination
of available
capital
Statutory Instruments
30th December, 2022
25. (1) A licensed insurer or reinsurer shall, in determining
available capital, use a method set out in the Fifth Schedule.
(2) A licensed insurer or reinsurer shall consider the following
in determining available capital:
(a)
permanence of assets or capital elements;
(b)
ability of capital resources to absorb losses when
required;
(c) availability of capital resources or assets; and
(d)
Minimum
capital
adequacy for
licensed
general
insurer or
reinsurer
absence of encumbrances.
26. A licensed general insurer or reinsurer shall have the
required minimum capital which shall be the higher of—
(a)
an amount determined by aggregating capital required
for
(i)
balance sheet assets set out in the Fifth Schedule;
(ii)
investing above concentration limit as set out in
the Fifth Schedule;
(iii)
policy liabilities which shall be ten percent of the
aggregate of unexpired risk reserve, claims
incurred but not settled and claims not reported
reserves;
(iv)
catastrophes which shall be a provision of five
percent of the preceding year’s net claims on all
classes of insurance;
(v)
reinsurance ceded as set out in the Fifth Schedule;
(vi) operational risks which shall be a provision of five
per cent of the total earned premium for the current
reporting period; and
(vii) guarantees issued to contract holders which shall
be fifteen percent of the sum guaranteed; or
(b)
Minimum
capital
adequacy
for long
term
insurer or
reinsurer
an amount representing a paid up share capital
requirement set out in the Fifth Schedule.
27. A licensed long term insurer or reinsurer shall have a
required minimum capital which shall be the higher of
(a)
the termination capital adequacy requirement;
(b)
the ordinary capital adequacy requirement; or
(c) an amount representing a paid up share capital set out
in the Fifth Schedule.
30th December, 2022
Statutory Instruments
28. (1) A long term insurer or reinsurer shall, in determining
the ordinary capital adequacy requirement, take into account major
risk categories faced by the insurer or reinsurer.
(2) Despite subregulation (1), a long term insurer or reinsurer
shall consider the following risk factors when determining the
ordinary capital adequacy requirement:
(a)
lapse risk for policies with no surrender value;
(b)
surrender risk;
1421
Determination
of ordinary
capital
adequacy
requirement
for long term
insurer or
reinsurer
(c) mortality, morbidity and medical fluctuation risk;
(d) annuitant mortality fluctuation risk;
(e) mortality, morbidity and medical assumption risk;
(f) expense fluctuation risk;
(g)
investment risk;
(h)
credit risk;
(i) operational risk; and
(j) any other risk the actuary or Authority may determine.
(3) Subject to subregulations (1) and (2), an actuary of a
licensed long term insurer shall aggregate the ordinary capital
adequacy requirement risk factors and adjust the results using the
method set out in the Fifth Schedule.
(4) An actuary shall, when using the method in subregulation
(3), consider the effect of the decrease in the fair value of assets
backing computations together with any credit risk associated with
the assets.
29. (1) A licensed long term insurer or reinsurer shall, in
determining the value of liabilities, use compulsory margins set out
in the Fifth Schedule.
(2) A licensed insurer or reinsurer shall, for the purposes of
determining the value of liabilities, take into account the following:
(a)
premiums to be received in the future;
(b) assumptions regarding future investment returns, bonus
declarations, expenses, mortality experience, morbidity
experience, lapses, surrenders, and other relevant
factors, which assumptions—
(i)
shall be best estimate assumptions;
Determination
of liabilities
1422
Statutory Instruments
30th December, 2022
(ii) shall take into account the reasonable expectations
of policyholders and any established practices of
an insurer for payment of benefits; and
(iii) may be modified further by discretionary margins
based on the expected experience to ensure the
prudent release of profit;
(c) the cost of any options that may be available to the
policyholder under the terms of each policy;
(d)
the minimum level of financial resilience through the
determination of a capital adequacy requirement;
(e) the yield curve issued through guidelines by the Authority
to discount future cash flows; and
(f) the full value of bonuses, already accumulated or to be
paid out on death.
(3) The method of calculating the value of liabilities referred
to under subregulation (1) shall—
Reserves for
Unexpired
risks
(a)
not be subject to arbitrary changes from one period to
another; and
(b)
recognise profit over the duration of each policy.
30. (1) A licensed insurer shall calculate the unearned premium
reserves, for the purposes of section 61 of the Act, using the 365th
method or a method that assumes that premium is earned equally
over the duration of the insurance contract.
(2) A licensed insurer shall, when using the method under
subregulation (1), take into account the following:
(a)
gross and net written premium;
(b)
the net written premium less any commissions paid to
intermediaries;
(c) a class of insurance business; and
(d)
an aggregate of classes of insurance business.
(3) A licensed insurer shall, where the licensed insurer
determines that the premium charged is insufficient to cover
unexpired risks, using the method referred to in subregulation (1),
calculate an additional reserve in respect of unexpired risks.
Reserves for
outstanding
claims
31. (1) A licensed insurer shall, for the purposes of section 62
of the Act, make provisions for claims not reported using the chain
ladder method.
30th December, 2022
Statutory Instruments
1423
(2) A licensed insurer shall, when using the method under
subregulation (1), take into account the conditions specified under
regulation 30(2).
(3) A licensed insurer shall, where the licensed insurer
determines that the provision for claims not reported is insufficient
to cover outstanding claims using the method referred to in
subregulation (1), calculate an additional reserve in respect of those
outstanding claims.
32. (1) A licensed insurer shall, for the purposes of investment
of funds, apply the concentration limit set out in the Fifth Schedule.
Investment
concentration
limits
(2) Despite subregulation (1), a licensed insurer shall not invest
in derivatives, hedge funds or speculative investments except
where a specific request s made for risk management purposes
and prior approval is granted by the Authority.
(3) A licensed insurer shall not invest outside the Republic
without the prior approval of the Authority.
33. (1) A licensed insurer shall submit a solvency statement in
accordance with section 65(4) of the Act.
Solvency
Statement
(2) The solvency statement referred to under subregulation
(1) shall disclose the following:
(a)
a summary of the sources of data used highlighting any
limitations in that data;
(b)
the assumptions and methodology used to—
(i)
calculate the value of liabilities for all classes of
business and the value of assets for all classes of
investment; and
(ii)
determine sensitivity analysis, product pricing,
experience investigations, surplus distribution,
policyholder reasonable benefit expectations and
risk management; and
(c) a summary of the reinsurance arrangements.
34. A licensed insurer or reinsurer shall comply with this Part
within a period of three years from the date of commencement of
these regulations.
Transitional
period of
this Part
1424
Statutory Instruments
30th December, 2022
PART V
GENERAL PROVISIONS
Commencement
of business
after
issuance of
licence
Request for
information
35. (1) An applicant granted a licence under these Regulations
shall commence business within one hundred and eighty days from
the date of issuance of the licence.
(2) The Authority may, where an applicant granted a licence
under these Regulations does not commence business within the
period specified in subregulation (1), vary, suspend or cancel the
licence, and inform the licensee, in writing, accordingly.
36. The Registrar may request for information from—
(a) a former and current shareholder, director, senior officer
or other employee of a licensee;
(b)
a former licensee; or
(c) an applicant.
Shareholding
37. A licensed insurer, reinsurer or insurance broker who
immediately before the commencement date of the Act was
licensed in accordance with the repealed Act, shall comply with
section 49 of the Act within a period of four years from the date of
commencement of these Regulations.
Fees
38. (1) The fees set out in the Third Schedule are the fees
payable for matters specified therein.
(2) A licensee shall pay the licence fee set out in the Third
Schedule annually.
Guidelines
39. The Authority may issue guidelines for the purposes of fit
and proper persons, and capital adequacy and solvency
requirements.
30th December, 2022
Statutory Instruments
1425
FIRST SCHEDULE
(Regulation 5)
CATEGORIES AND CLASSES OF INSURANCE BUSINESS
PART I – LONG TERM INSURANCE BUSINESS
Class
No.
Class Name
Description of Class
Sub-Classes Definition
Insurance policies in which a
person, in return for a premium,
undertakes to provide policy
benefits, contingent on human
life, that guarantee a fixed or
variable payment or benefits
stipulated in the policy and
includes a reinsurance policy in
respect of such a policy.
1.
Annuity
insurance
2.
Life Assurance A policy in which a person, in
return for a premium,
undertakes to provide policy
benefits upon, and exclusively
as a result of, a life event or pay
specified benefits for a period,
and includes a reinsurance
policy in respect of such a
policy.
Sub–Classes
Breakdown
(a) annuity
certain;
(b) temporary
annuity;
(c) guaranteed
annuity;
(d) capital
protected
annuity; or
(e) any other
ancillary to
annuity
insurance
Ordinary Life Insurance:
Policies of insurance
contingent on human life,
including policies that pay a
benefit to a beneficiary at
the end of the policy term or
if the insured dies.
Group Life Insurance:
Policies to pay Lump Sums
to employees/ formeremployees, creditors or
other individuals that relate
to the issuing of or the
undertaking of liability
under a Group term or
Group Credit policies.
(a) term life
insurance;
(b) whole life
assurance;
(c) endowment
s;
(d) income
(e)
(f)
(g)
(h)
(i)
protection;
group life;
group term;
credit life;
group
credit life;
or
any other
ancillary to
life
assurance
1426
3.
4.
Statutory Instruments
Investment
Linked Life
Insurance
Disability
Insurance
A policy in which the policy
benefits is not guaranteed by the
long-term
insurer
and
determined solely by reference
to the value of particular assets or
categories of assets which are
specified in the policy and are
actually held by or on behalf of
the insurer specifically for the
purposes of the policy;
A policy in which a person, in
return for a premium, undertakes
to provide policy benefits upon a
disability event and includes a
reinsurance policy in respect of
such a policy.
5.
Health
Insurance
A policy in terms of which a
person, in return for a premium,
undertakes to provide specified
policy benefits as a result of injury
through an accident or of sickness
or infirmity, including critical
illness and long-term care and
includes a reinsurance policy in
respect of such a policy but
excludes hospital cash plans;
6.
Other
long Miscellaneous insurance policies,
term insurance not included in classes 1 to 5
above
that
the
Authority
determines constitutes long term
insurance business.
30th December, 2022
(a) unit-linked
policies;
(b) linked
investment
policies;
(c) non-linked
investment
policies; or
(d) any other
ancillary to
investment
linked life
insurance
(a) partial
disability;
(b) permanent
disability; or
(c) any other
ancillary to
disability
insurance.
30th December, 2022
Statutory Instruments
1427
PART II – GENERAL INSURANCE BUSINESS
Class
No.
1.
Class Name
Property
insurance
Description of Class
Sub-Classes Definition
Insurance policies in which Fire Insurance: Policies of
a person, in return for a
insurance against loss or damage
premium, undertakes to
to property, and consequential
provide policy benefits if
losses, due to fire, explosion,
an event, contemplated in
storm and other natural perils and
the policy as a risk relating
other perils customarily included
to the use, ownership, loss
in fire insurance policies.
of or damage to movable or
immovable property and
includes a reinsurance
policy in respect of such a
policy.
Theft Insurance: Policies of
insurance against loss or damage
to property due to theft or any
other cause not covered under
any other class, including
consequential losses.
2.
Transport
Insurance
A policy in which a person, Marine Insurance: Policies of
insurance against—
in return for a premium,
undertakes to provide
(a)
loss of or damage
policy benefits if an event,
to marine craft or
contemplated in the policy
the equipment or
as a risk relating to the
fittings of marine
possession,
use
or
craft; or
ownership of a vessel,
(b) loss or damage arising out of
aircraft or other craft or for
or in
the conveyance of persons
connection with the
or goods by air, space, land
freight, use,
or water, or to the storage,
construction or
treatment or handling of
repair of marine
goods so conveyed or to be
craft, including
so conveyed, occurs; and
third party risks,
includes a reinsurance
carrier’s liability
policy in respect of such a
and medical
policy
expenses for the
injury of occupants
of a marine craft,
including crew.
Aviation Insurance: Policies of
insurance against—
(a) loss of or damage to aircraft
or aircraft
equipment
or fittings;
(b) loss or damage arising out of
or in connection with the use
of aircraft, or the construction
Sub–Classes
Breakdown
(a) fire insurance
domestic
(including house
owners and
householders);
(b) fire insurance
industrial and
commercial;
(c) burglary, all
risks and
other theft
insurance;
(d) cash in transit;
fire and allied
perils;
(e) asset all risks; or
(a) any other ancillary
to property
insurance.
(a)
(b)
(c)
(d)
(e)
(f)
(g)
(h)
(i)
(j)
(k)
(l)
marine hull;
marine cargo;
goods in transit;
aircraft damage
and loss;
aircraft third party
losses;
loss of flying
licence for pilots
marine open
cover;
marine specific;
craft and motor
boat;
single inland;
transit aviation; or
any other
ancillary to
transport
insurance.
1428
Statutory Instruments
30th December, 2022
Aviation Insurance: Policies of
insurance against—
(a) loss of or damage to
aircraft or aircraft
equipment or fittings;
(b) loss or damage arising out
of or in connection with
the use of aircraft, or the
construction or repair of
aircraft, including third
party risks, carrier’s
liability, airport owner’s
liability and medical
expenses for the injury or
loss of life of occupants of
an aircraft, including
aircrew; or
(c) goods in transit.
3.
4.
Motor
Insurance
Liability
Insurance
insurance.
A policy in which a person, Motor Insurance: Policies of
insurance against—
in return for a premium,
undertakes to provide
(a)
loss of or damage to motor
policy benefits if an event,
vehicles; or
contemplated in the policy
as a risk relating to the (b) loss or damage arising out of
or in connection with the use
possession,
use
or
of motor vehicle, including
ownership of a motor
third party risks, carrier’s
vehicle,
occurs;
and
liability and medical expenses
includes a reinsurance
for the injury of occupants of
policy in respect of such a
a motor vehicle.
policy
(a) third party;
(b) full third party;
(c) comprehensive
A policy in which a person, Employer’s Liability: Policies of
in return for a premium,
insurance against the liability of
undertakes to provide
an employer to the employee in
policy benefits if an event,
relation to any injury or disease
contemplated in the policy
arising out of, or in the course
as a risk relating to the
of, their employment.
incurring of a liability,
otherwise than as part of a Liability Insurance: Policies of
policy relating to a risk
insurance against risks of the
more
specifically
person insured incurring liability
contemplated in another
to third parties (excluding any
definition in this section,
risk to which any other class of
occurs; and includes a
non-life insurance relates).
reinsurance
policy
in
respect of such a policy.
(a) public liability;
(b) professional
insurance;
(d) motor private;
(e) motor commercial
(f) motor cycle;
(g) motor public service
vehicle;
(h) yellow card; or
(i) any other ancillary
to motor insurance
indemnity;
(c) product liability;
(d) financial loss
liability;
(e) directors and
officers’ liability
(f) employment
practice; or
(g) any other ancillary
to liability
insurance.
30th December, 2022
5.
6.
7.
8.
Engineering
Insurance
Accident
Insurance
Guarantee
Insurance
Other general
insurance
Statutory Instruments
A policy in which a person, in Policies of insurance against—
return for a premium,
undertakes to provide policy (a) loss or damage to plant and
benefits
if
an
event
machinery;
contemplated in the policy as
a risk relating to (b) loss or damage arising out of
the use or operation of plant
(a) the possession, use or
and machinery, including loss
ownership of machinery
of or damage to surrounding
property of the insured,
or equipment, other than
liability to third parties for
a motor vehicle, in the
damage to property, injury or
carrying
on
of
a
loss of life; or
business;
(b) the erection of buildings
or other structures or the (c) loss or damage arising out of
undertaking of other
contract work in relation to
works; or
plant
and
machinery,
installation
of
(c) the
including damage to property
machinery
or
on site and third party risks.
equipment, occurs;
and includes a reinsurance
policy in respect of such a
policy;
A policy in which a person,
in return for a premium,
undertakes to provide policy
benefits if a disability event,
health event, or death event,
contemplated in the policy as
a risk occurs and includes a
reinsurance
policy
in
respect of such a policy, but
excludes a policy of which
the contemplated policy
benefits are(a) something other than a
stated sum of money;
(b) are to be provided upon a
person having incurred,
and
to
defray
expenditure in respect
of any health service
obtained as a result of
the
health
event
concerned; or
(c) to be provided to any
provider of a health
service in return for the
provision
of
such
service.
A policy in which a person,
other than a bank, in return
for a premium, undertakes
to provide policy benefits if
an event, contemplated in
the policy as a risk relating
to the failure of a person to
discharge an obligation,
occurs; and includes a
reinsurance
policy
in
respect of such a policy.
Miscellaneous insurance
policies, not included in
classes 1 to 7 above that
the Authority determines
constitutes general
insurance business.
Policies of insurance that provide
fixed pecuniary benefits
or benefits in
the
nature of an indemnity or both
against risks of the person insured
—
(a) sustaining
accidental injury;
(b) dying as a result of
an accident;
1429
(a) contractor’s all
risks;
(b) engineering
insurance;
(c) mining
engineering;
(d) plant all risks;
(e) machinery
breakdown;
machinery
breakdown and
deterioration of
stock; or
(g) any other ancillary
to engineering
insurance.
(f)
(a) personal
accident
insurance;
(b) group
person
accident;
(c) personal accident
or
(d) any other
ancillary to
accident
insurance.
(c) becoming
incapacitated as a
result of disease;
and
(d) attributable to sickness or
infirmity.
(a) performance bond
(b) customs bond;
(c) advance payment
bonds;
or
(d) retention bond;or
(e) any other
ancillary to
guarantee
insurance.
1430
Statutory Instruments
30th December, 2022
SECOND SCHEDULE
(Regulations 6, 8, 9, 10, 11, 12, 17, 18, 19 and 22)
Form I
(Regulation 6)
The Insurance Act, 2021
(Act No. 38 of 2021)
_____________
The Insurance (General) Regulations, 2022
APPLICATION FOR AN INSURANCE/REINSURANCE LICENCE
A. GENERAL INFORMATION
1.
Name of Applicant:
…………………………………………………
2.
Business Type:
[ ] Long term Insurer [ ] General Insurer [ ] Reinsurer
3.
Business proposed to be carried on (See First Schedule):
Class Name
Sub-Class
1.
2.
3.
4.
5.
6.
7.
8.
9.
10.
Other Business:
………………………………………………………………………………………...
Physical Address
……………………………………..……………………………………………....
Postal Address:
……………………..…………………………………………………………….…..
Telephone Number:
…..……………………………………………….………………………….….
Email address:
………………………………………………………………………….…………….
Name of the person lodging the application:
......................................................................................................................................
Name and contact telephone number of the contact person:
.....................................................................................................................................
Countries in which applicant carries on insurance business:
(a) Physical and postal address: …………….………………….…………………
(b) Telephone No: …………………………………….....................................
(c) Email Address……………………………………..............................
30th December, 2022
11.
3.
#
Branches if any:
Location
Postal
Address
Statutory Instruments
Physical
address
Phone
numbers
1431
Branch Manager
B. GENERAL OWNERSHIP INFORMATION
(1) Limited Company
12.
4.
Provide Shareholders information in the table below:
Name
Country of
Physical
Telephone
incorporation
and Postal
number
Address
Percentage of Shares
(a) Provide ownership structure of company (a structural chart and explanatory note)
(b) Briefly state the nature and purpose the business of the holding company.
………………………………………………………………………………………………
(c) Indicate the source of funds used by the shareholder/beneficial owner to finance the applicant
Attach the following documents:
i.
Audited financial statements for the past 3 financial years
ii.
Company profile
iii.
Certified true copy of Certificate of incorporation
iv.
Certified true copy Articles of association
v.
Declaration of Compliance with minimum capital adequacy requirements
vi.
Evidence of Paid Up Capital made by each shareholder
vii.
Attach evidence of compliance to the Capital adequacy requirements
viii.
Minimum Paid up Share capital (attach copies of board minutes, return on allotment of shares,
company receipts, bank statements, etc.)
2. Natural Person
Shareholder
information
in the
table below:
Provide Provide
Shareholder
information
in the table
below:
Name
Nationality
Physical and Telephone
Postal
number
Address
Attach:
A complete Fit and Proper Test Questionnaire.
Percentage of
Shares
1432
C.
1.
13.
Statutory Instruments
30th December, 2022
BENEFICIAL OWNERSHIP INFORMATION
Provide particulars of the beneficial owner of the company
Name of
Nationality
Physical
Email
Telephon No. of
Beneficia
and postal
address e number Controlling
l Owner
address
Shares/Intere
sts
Profession
and average
annual
income
Attach the following:
i. National identification with photo
ii. Proof of Residence (utility bill, tenancy agreement etc.)
iii. Provide documentary evidence of the source of funds used to finance the applicant
company
D.
GOVERNANCE STRUCTURE
(a) Name of Board Chairperson:
……………………………………………………..…………........................................
..
(b) Date of Appointment:
……………….……………………………………..…………………………………
….
(c) Profession:
..…………………………………………………………………………………………
..
(d) Other Boards:
……………………………………………………………..……………..……………..
.
(e) Other Board members:
Full Names
Date of
Profession
Executive or
Other Board
Appointment
Non-Executive
memberships
(f) Provide the Board Charter
(g) Proposed Board committees
…………………………………………………………………………………………………….…………
……………………………………………………………………………………
E. MANAGEMENT
14. Attach a signed and approved chart of the organizational structure
15. Name of Proposed Chief Executive Officer:
………………………………………………………………………………………………..
(Attach the following)
i.
The application for approval of appointment; and
ii.
Power of attorney in favour of the proposed Chief Executive Officer.
16. Senior Staff
Position
Name
i.
Qualifications
Years Of
Experience
Attach the application for approval of appointment;
30th December, 2022
Statutory Instruments
1433
17. Actuary
Name: ……………………………………………………….……………………….…
Qualifications: ………………………………………………………………………….
Physical and postal address: ………………………………………………………........
Date of appointment of Actuary: ……...................................…………………………..
18. External Auditor
Name: …………………………………………………………………………………..
Qualifications: ……………………………………………………………………..….
Physical and postal address: ………………………………………................................
Date of appointment: ……………………………..………………………………….....
PRODUCTS
19. Attach documentation in respect of products that the insurer intends to launch
immediately after being granted a license as per Authority Product Approval
Guidelines.
20. Give a brief summary of the reinsurance arrangements.
....................................................................................................................................................................................................................................
G. FINANCIAL SOUNDNESS
21. Attach a schedule of applicant insurer’s assets and liabilities as at the date closest to
the application date, indicating where such assets and liabilities are located and the
value of each asset.
H. BUSINESS AND RISK MANAGEMENT
22. Submit a five year business plan for the entity.
23. Submit the intermediary engagement policy.
24. Provide documented key policies and procedures of the applicant.
25. Provide a description of the reinsurance and investment policies and procedures or
other risk management programmes.
26. Provide a Treat Customers Fairly (TCF) policy and procedure.
27. Provide an Anti-money Laundering and Countering of Terrorism policy and
procedures.
28. Attach evidence of membership to the Insurers Association of Zambia.
DECLARATION
We, ....................................................................................… hereby apply for a licence under
the Insurance Act No. 38 of 2021 and declare the above particulars to be true and correct.
We hereby further declare that the company does not intend to carry on any other business
other than insurance business for which it is seeking registration.
Date…………………………………
…………………………………...
Authorised Director (1)
………………………………
Authorised Director (2
1434
Statutory Instruments
30th December, 2022
Form II
(Regulation 8(1))
The Insurance Act, 2021
(Act No. 38 of 2021)
_____________
The Insurance (General) Regulations, 2022
INSURANCE OR REINSURANCE LICENCE
The Pensions and Insurance Authority pursuant to its authority under section
12 of the Insurance Act, 2021 hereby grants this licence to:
Company Name: ……………………………………………..........................
Address: ……………………………………………………..…............................
(1)
The type of
insurance
service
applied for.
Category of Licence (1):.……………………………………………………............
Date of Issue: ………………………………………………............................
This licence is subject to the provisions of the Insurance Act, 2021, the
Regulations thereunder and the Conditions hereby given and shall remain
valid from the date of issue unless varied, suspended or revoked.
Classes of insurance business:
1………………………………………………………………………………………
2……………………………………………………………………………………….
3……………………………………………………………………………………......
4……………………………………………………………………………………......
(2)
Registrar of
the Authority
………………………………………………………………
Registrar
30th December, 2022
Statutory Instruments
1435
Form IV
(Regulation 8(1))
The Insurance Act, 2021
(Act No. 38 of 2021)
_____________
The Insurance (General) Regulations, 2022
APPLICATION FOR A LICENCE AS AN INSURANCE BROKER
A. GENERAL INFORMATION
1. Name of Applicant: ……………………………………………………………….…….
2. Type of Licence (Tick)
Insurance Broker
Reinsurance Broker
Postal Address: ………………………………………………………………………....
Physical Address: ……………………………………………………………………….
Company email address: …………………………………………………………….…..
Telephone lines: ………………………………………………………………………...
Other countries in which the company carries out insurance business?
………………………………………………………………………………………………
………………………………………………………………………………………………
………………………………………………………………………………………………
8. Does the company carry on any business other than insurance brokerage?
Yes
No
3.
4.
5.
6.
7.
If yes, provide details of business and indicate annual turnover
…………………………………………………………………………………………………
…………………………………………………………..……..
9. Branches in Zambia, if any:
Location
Postal
Address
Physical
address
Phone numbers
Branch
Manager
1436
Statutory Instruments
30th December, 2022
B - GENERAL OWNERSHIP INFORMATION
1. Limited Company Shareholder
Provide Shareholder information in the table below:
Name
Country of
incorporation
Physical
Telephone
and Postal number
Address
Percentage of
Shares
2. Briefly state the nature and purpose of the business of the holding company, if any.
…………………………………………………………………………………………………
…………………………………………………………………………………………………
……………………
Attach the following documents:
i.
ii.
iii.
iv.
v.
vi.
vii.
viii.
Fit and Proper Test Questionnaire for significant shareholder.
A detailed three year business plan which should include income statement forecast,
statement of financial position and projected cash flows.
Audited financial statements for the past three financial years for the holding company, if
any.
Company profile of the applicant.
Certified true copy of Certificate of Incorporation.
Certified true copy Articles of association.
Attach evidence of sufficient funds for operations.
Attach group structure of the company (affiliate, associate holding or subsidiary company).
2. Natural Person
Provide Shareholder information in the table below:
Name
Nationality
Physical
Telephone
and Postal number
Address
Attach:
A complete Fit and Proper Test Questionnaire.
Percentage of
Shares
30th December, 2022
Statutory Instruments
1437
C - BENEFICIAL OWNERSHIP INFORMATION
Provide particulars of the beneficial owner of the company
Attach the following:
(i) National identification with photo
(ii) Proof of Residence (utility bill, tenancy agreement etc.)
(iii) Provide documentary evidence of the source of funds used to finance the applicant company
D - GOVERNANCE STRUCTURE
Board Chairperson
1.
Name of Board Chairperson: ………………………………………
2.
Date of appointment, profession and which other Board the chairperson is currently serving?
Date: ………………………………….………………………………...
Profession: ..……………………………………………………………
Other Boards: ………………………………………………..…..……
Directors
3.
Name
Fill in the details of the Directors of the Applicant
Date of
Appointment
Profession
State
Country of
Other
(Executive or
Residence
directorship
NonExecutive)
Attach the Board Charter
1438
Statutory Instruments
30th December, 2022
E. MANAGEMENT
1.
Name of proposed Chief Executive Officer?
…………………………………………………………………………………….…
2.
Names of other senior staff
Position
Name
Qualifications
Years of
experience
Attach the following:
i.
ii.
Power of attorney executed in favour of principal officer, and
The application for approval of appointment.
F – AUDITORS
1.
Name and address of auditors
………………………………………………………………………………………..…..
G – GENERAL BACKGROUND
1.
Has your company been convicted, whether in Zambia or elsewhere, of an offence involving fraud or
dishonesty, or convicted of an offence against the Insurance Act or any regulations made under that
Act?
Yes
No
If your answer in 1 is yes, attach details in brief.
H – SUPPORTING DOCUMENTATION
1. Bank accounts: attach confirmations from the bank, copies of statements and panels of signatures
2. Premium management system: Attach a write-up of policies & procedures
3. Assets and Liabilities: attach detailed lists, valuation reports, evidence of ownership, copies of bills or
Policies, etc.
4. Professional indemnity and fidelity guarantee: attach evidence of insurance for the next financial year.
5. Three year Business Plans and internal control
6. Three year projected financial statements: attach projected balance sheets, income statements and cash
flow statements
7. Membership with the Insurance Brokers Association of Zambia: attach evidence of having applied to
be a member
DECLARATION
We …………………………………………hereby apply for a licence under the Insurance Act and declare
the above particulars to be true and correct.
Date…………………………………………………………
…………………………………….……
Authorised Director (1)
….……..………………………………
Authorised Director (2)
30th December, 2022
Statutory Instruments
1439
Form V
(Regulation 10(1))
The Insurance Act, 2021
(Act No. 38 of 2021)
_____________
The Insurance (General) Regulations, 2022
INSURANCE BROKERING LICENCE
The Pensions and Insurance Authority pursuant to its authority under Section 12
of the Insurance Act, 2021 hereby grants this licence to:
Company Name: ……………………………………………..........................
Address: ……………………………………………………..……………………
(1) The type of
insurance
service
applied for.
Category of Licence (1):.…………………………………………………………
Date of Issue: ………………………………………………...........................
This licence is subject to the provisions of the Insurance Act, 2021, the
Regulations thereunder and the Conditions hereby given and shall remain valid
from the date of issue unless varied, suspended or revoked.
(2)
Registrar of the
Authority
………………………………………………………………
Registrar (2)
1440
Statutory Instruments
30th December, 2022
Form VI
(Regulation 11(1))
The Insurance Act, 2021
(Act No. 38 of 2021)
_____________
The Insurance (Licensing) Regulations, 2022
(Tick under applicable category)
Insurance
Agent
Risk
Surveyor
Loss
Assessor
Claims
Agent
Insurance
Agent
Loss
Adjustor
Underwr
iting
Agent
PART A (GENERAL DETAILS)
1.
Name of Applicant: ………………………….………………………………..
1. Registered Office
Physical Address………………………………………………….…………………………
Postal Address…………………………………Telephone No …………….……...
Email……………………………………..…Cellphone No………………….…..
Branches if any
Location
Postal
Address
Physical
address
phone
numbers
Branch
Manager
30th December, 2022
Statutory Instruments
1441
PART B: INCORPORATION STATUS
1. Legal Form of Applicant
Natural Person
Limited Company
2. Attach a certified copy of registration of business name
1. Attach a certified copy of certificate of incorporation or Articles of Association for companies
PART C – SHAREHOLDERS, BENEFICIAL OWNERS, DIRECTORS AND SENIOR STAFF
#
Name
*Provide particulars of Shareholders and Directors*
Status in
Domicile Nationality
No. of shares
Company
Attach the following:
i.
Fit and Proper Test Questionnaire for shareholders; and
ii.
Application for approval of appointment for directors.
#
*Provide Particulars of the beneficial owner of the company*
Name of Beneficial Owner/s
No. of Controlling
Nationality
Shares
Attach:
Fit and Proper Test Questionnaire
1442
Statutory Instruments
#
Name
30th December, 2022
*Provide Particulars of Senior Staff*
Position
Qualifications
Attach:
The application for approval of appointment for each chief executive officer and senior staff
4. Insurance Agents and Underwriting Agents - Business Particulars
a) Attach the agency agreement between the applicant and the insurer.
b) Attach Assessment or standard forms to use to disclose the services to be provided and
the scale of fees to be charged
…………………………………………………………………………………………
I hereby certify that the statements contained herein are true and accurate to the best of my
knowledge and belief. Any alterations in particulars stated herein shall be promptly
communicated to the Registrar.
Signed on this………………. .day of ......………………….20…….....
……………………………………..
Applicant (Principal Officer)
Applicable
to
insurance
agents
DECLARATION BY PRINCIPAL OFFICER OF REGISTERED INSURER TO BE
REPRESENTED (1)
I, ..........................................................hereby certify that to the best of my knowledge and
belief the above particulars and declaration are true and correct and that the applicant has
undergone a period of training in the class or classes of insurance business he will require to
transact and that he is competent to explain the conditions of the policies issued by this
Company. I further declare that the applicant is a fit and proper person.
Name of Insurer (1) ……………
Name of Insurer (2)………….
…………………………………….
Signature of Principal Officer
Date.......................................
...............................................
Insurer’s Stamp (1)
….………………………………..
Signature of Principal Officer
Date………………………………
………………………………..
Insurer’s Stamp (2)
5. Loss Adjustor, Assessor, Claims Agent, Risk Surveyor- Business Particulars
Attach Assessment or standard forms/Policies to be used to disclose the services to be provided
and the method and scale of fees to be charged
I hereby certify that the statements contained herein are true and accurate to the best of my
knowledge and belief.
Signed on this……………….. day of ......………………….20....
……..…………………………………….....
Applicant (Principal Officer)
30th December, 2022
Statutory Instruments
1443
Form VII
(Regulation 12(1))
The Insurance Act, 2021
(Act No. 38 of 2021)
_____________
The Insurance (General) Regulations, 2022
INTERMEDIARY LICENCE
The Pensions and Insurance Authority pursuant to its authority under Section 12 of
the Insurance Act, 2021 hereby grants this licence to:
Company Name: …………………………………………….........................................
Address: ……………………………………………………..………………………..……
(1) The type
of
insuranc
e
service
applied
for.
Category of Licence (1):.…………………………………………………………………
Date of Issue: ………………………………………………..................................
This licence is subject to the provisions of the Insurance Act, 2021, the Regulations
thereunder and the Conditions hereby given and shall remain valid from the date of
issue unless varied, suspended or revoked.
………………………………………………………………
Registrar
1444
Statutory Instruments
30th December, 2022
Form VIII
Regulation 17)
(To be completed
in triplicate)
The Insurance Act, 2021
(Act No. 38 of 2021)
The Insurance (General) Regulations, 2022
APPLICATION FOR AMENDMENT OF LICENCE
Shaded fields for official
use only
Information Required
1.
2.
3.
4.
Application Number:
Date/Time

Information Provided
Name(s) of applicant(s)
Date of initial application
Reason for amendment
Proposed amendments to application
(a)
(b)
(c)
(d)
(e)
(f)
5.
Appendices (Please attach relevant supporting documentation)
Appendix No. 1
Appendix No. 2
Appendix No. 3
Receipt number
Name:
Signature of applicant (individual or authorized representative):
To be signed by authorized officer
Name:
Signature of officer:
STAMP
30th December, 2022
Statutory Instruments
1445
Form ix
(Regulation 18
(Regulation 1
The Insurance Act, 2021
(Act No. 38 of 2021)
_____________
The Insurance (General) Regulations, 2022
APPLICATION FOR DUPLICATE LICENCE
Please complete in block letters
Shaded fields for
official use only
Application No.
Date and Time
Information Required
1.
Name of Licensee
2.
Licence No.
3.
Address
(a) Physical address
(b) Postal address
4.
Contact details
(a) Telephone No.
5.

Information Provided
(b) Mobile phone No.
(c) Email address
Appendix
Affidavit of loss, damage or
otherwise of original licence
Name of applicant (individual or authorised representative):
Signature : …………………………………………………
Date: …………………………
FOR OFFICIAL USE ONLY
Received by: ………………………………………………………
Officer (Name and Signature)
…………….………...
Date
Amount Received: ………………………………………………….……..…….
Receipt No.: ………………………………………………………….………….…….…
Remarks: ………………………………………………………………………...
…………..…………………………………………………………….
OFFICIAL
STAMP
1446
Statutory Instruments
30th December, 2022
Form X
(Regulation 19(1)
The Insurance Act, 2021
(Act No. 38 of 2021)
_____________
The Insurance (General) Regulations, 2022
1. Here insert the
full names and
address of
licensee
2. Here insert the
Licence No.
3. Here insert the
number of days
NOTICE OF INTENTION TO SUSPEND/CANCEL A LICENCE
TO (1)
……………………………………………………………………………………….
IN THE MATTER OF (2) ……………………………………………………. you are
notified that the Authority intends to *suspend/cancel your licence under the Insurance
Act, 2021 on the following grounds:
(a) …………………………………………………………………………………
(b) …………………………………………………………………………………
(c) …………………………………………………………………………………
.
Accordingly, you are requested to show cause why your licence should not be
*suspended/cancelled and to take action to remedy the breaches set out in paragraphs
…………………………………... (above) within (3) ……………………… days of
receiving this notice. Failure to remedy the said breaches shall result in the
*suspension/cancellation of your licence.
Dated this……………………day of……………………………….20………..
……………………………
The Registrar
30th December, 2022 Statutory Instruments
1447
Form XI
(Regulation 19(2))
The Insurance Act, 2021
(Act No. 38 of 2021)
_____________
The Insurance (General) Regulations, 2022
Here
insert the
full
names
and
address
of
licensee
2. Here
insert the
Licence
No.
1.
NOTICE OF SUSPENSION/CANCELLATION OF LICENCE
TO (1)
……………………………………………………………………………………….
IN THE MATTER OF (2) ……………………………………………………. you
are notified that your licence has been suspended/cancelled on the following
grounds:
(a) ………………………………………………………………………………
(b) ………………………………………………………………………………
(c) ………………………………………………………………………………
Dated this……………………day of……………………………….20………..
……………………………
The Registrar
1448
Statutory Instruments
30th December, 2022
Form XII
(Regulation 22(1))
The Insurance Act, 2021
(Act No. 38 of 2021)
_____________
The Insurance (General) Regulations, 2022
APPLICATION FOR APPROVAL OF APPOINTMENT
(1) birth,
descent,
registration
or adoption
include a
certified copy
1. Name of company in connection with which this application is being completed
(“the corporate entity”)
........................................................................................................................
2. Please state in what capacity you are completing this application, e.g. as a
shareholder, current or prospective director, chief executive officer, chief
financial officer, chief underwriter, etc.
.........................................................................................................................
3. Please describe the particular duties and responsibilities attaching to the
position(s) that you hold or will hold. If you are completing this form in the
capacity of director, indicate whether, in your position as director, you have or
will have executive responsibility for the management of the company's business.
In addition, please provide a copy of your detailed curriculum vitae:
.........................................................................................................................
4. VITAL STATISTICS
Personal Details:
Title and surname: …………………………………………………………
Full first name(s):……………………………………………….……………
Any other name(s) or surname(s) by which you have been previously known:
…………………………………….…………………………………
Marital Status: …………………………..………………………………..….
Name of Spouse: ………………….………………………...……………….
Nationality and how it was acquired (1): …………………..…………........…
Passport/NRC No. (2): ………..………………………………………………
30th December, 2022
(1) Attach
certified true
copies of
qualifications
Statutory Instruments
1449
Contact Details:
Current physical business address: …………………………………..…….
Residential address: ……………………………………................................
Postal address: ………………………………………………………...…..…
Previous residential addresses during the last 10 years:
……………........…………………………………………………………......
Telephone number: …………………………….…………………..………..
Cell phone number: ………………………………………………..………...
Email address: ……………….……………………………………….……...
5. QUALIFICATIONS (3)
Institution
Qualification
Year Obtained
6. MEMBERSHIP
To be
completed
by significant
shareholders
The name(s) of the professional
body/bodies
Date of admission as member
Details of current or previous
complaints or disciplinary action
against you, if any.
7. SOURCE OF CAPITAL (4)
Declare the full extent of the capital that have been invested in the company in respect of
which this application is being completed.
Source
Savings
&
Other
personal
investments
Dividend/sale of assets
Gift; bequeathed/inherited funds;
insurance policies.
Legal awards
Policies/consultancy/ other services
Debt/loan (list salient repayment
terms and capacity to service the
loan as submitted to the creditor)
Other sources ( specify)
Details (name of source; description
of transaction; transaction dates; etc)
1450
Statutory Instruments
30th December, 2022
1. BUSINESS INTERESTS
8.
Declare the full extent of your interest in other businesses:
Name of institution(s) (company or
other)
Period of association
Are you a director or an executive
officer and since when?
Do you have any direct or indirect
interest representing 10 per cent or
more of the issued capital that is
now registered, or has applied for
authorization, under the Act? If so
give particulars
What other institutions have you
been a shareholder, director, chief
executive officer, chief financial
officer or chief underwriter at any
time during the past 10 years? Give
relevant dates:
(1) Do not 9.
2.
include the
following
offences:
• Any offence
committed
when you were
18 years or
younger,
unless this was
in the last ten
years;
• All road
traffic
offences for 10.
3.
which you
were fined; or
 Conviction
4.
with a
11.
sentence of
imprisonment
for a period of
5.
12.
less than 6
months
COURT CONVICTIONS OR PROCEEDINGS
Please list any previous court convictions or pending court proceedings against you and the
nature of the offences (5):
The nature of the offence
Date when the conviction was made
The
penalty
(e.g.
fine,
imprisonment or both fine and
imprisonment) that was imposed
Have you ever been removed from an office of trust as a result of misconduct? If yes, please
give details
………………………………………………….…………………………………
Have you ever been convicted of any offence involving dishonesty, including fraud, theft,
forgery, perjury, or forged a document? If yes, please give details.
………………………………………………………………………….………
Have you ever been convicted of an offence in connection with the formation or management
of a company or corporation? If yes, please give details.
………………………………………………………………………............
13.
6. Have you ever been disqualified by the court to be a director of a company? If yes, please
give details.
30th December, 2022
Statutory Instruments
1451
…………………………………………………………………………………
1. Have you ever applied for approval as a director or similar position in Zambia or any other
12.
13.
2.
14.
3.
15.4.
16.5.
17.6.
18.7.
country and the application was declined? If yes, please give details.
…………………………………………………………………………………
Have you ever been a director or shareholder with control of an institution when it was
liquidated or placed under judicial management? If yes, please provide details of the matter.
....................................................................................................
Have you, in Zambia or elsewhere, been censured, disciplined, warned against some conduct,
or made the subject of a court order at the instigation of a regulatory authority or any
professional body to which you belong or belonged, or have you ever held a practicing
certificate subject to conditions? If so, give particulars:
…………………………………………………………………………………
Have you, in Zambia or elsewhere, been dismissed from any office or employment or subject
to disciplinary proceedings by your employer or barred from entry to any profession or
occupation? If so, give particulars:
……………………………………………………………………………….…
Have you, or has any corporate body, partnership or unincorporated institution which you are,
or have been, associated as a director or executive officer, been subject of an investigation, in
Zambia or elsewhere, by or at the instigation of a government department or agency,
professional association or other regulatory body if so, give particulars:
…………………………………………………………………………….……
Has any body corporate, partnership or unincorporated institution with which you were
associated as a director or executive officer, in Zambia or elsewhere, been wound up, made
subject to an administration order, otherwise made any compromise or arrangement with its
creditors or ceased trading, either while you were associated with it or within one year after
you ceased to be associated with it, or has anything analogous to any of these events occurred
under the laws of any other jurisdiction? If so, give particulars:
…………………………………………………………………………..………
Have you ever been declared bankrupt (either provisionally or finally) by a court in Zambia
or elsewhere, or has a bankruptcy petition ever been served on you or have you applied to take
the benefits of a written law for the relief of bankruptcy? If so, give particulars:
…………………………………………………………………………..………
19.8. Have you been concerned with the management or conduct of the affairs of any institution
that, by reason of any matter relating to a time when you were so concerned, has been
censured, warned as to future conduct, disciplined or made the subject of a court order at the
instigation of any regulatory authority in Zambia or elsewhere? If so, give particulars:
……………………………………………………………………………..……
20.9. In carrying out your duties will you be acting on the directions or instructions of any other
individual or institution? If so, give particulars:
…………………………………………………………………………….……
1452
Statutory Instruments
30th December, 2022
1. Have you been concerned with the management or conduct of the affairs of any
21.
institution that, by reason of any matter relating to a time when you were so
concerned, has been censured, warned as to future conduct, disciplined or made the
subject of a court order at the instigation of any regulatory authority in Zambia or
elsewhere? If so, give particulars:
……………………………………………………………………………..……
22.
2. In carrying out your duties will you be acting on the directions or instructions of any
other individual or institution? If so, give particulars:
…………………………………………………………………………….……
3. Do you, or does any associate of whom you are aware, undertake business with this
23.
institution? If so, give particulars:
…………………………………………………………………………………
4. How many shares in the institution are registered in the name of an associate? If
24.
applicable, give name(s) in which registered and class of shares:
……………………………………………………………………………………
5. Do you, or does any associate, hold any shares in the institution as trustee or
25.
nominee? If so, give particulars:
……………………………………………………………………………………
6. Are any of the shares in the institution mentioned in reply to questions 24 and 25
26.
equitably or legally charged or pledged to any party? If so, give particulars:
……………………………………………………………………………………
27.
7. What proportion of the voting power at any general meeting of the institution (or of
another body corporate of which it is a subsidiary) are you or any associate entitled
to exercise or control the exercise of?
………………………………………………………………………………….
28.
8. If the exercise of the voting power at any general meeting of the institution, or of
another body corporate of which it is a subsidiary, is or may be controlled by one or
more of your associates, give the proportion of the voting power so controlled in each
case and the identity of each associate.
……………………………………………………………………….…………
9. Are you currently, or do you, other than in a professional capacity, expect to be,
29.
engaged in any litigation in Zambia or elsewhere? If so, give particulars:
…………………………………………………………………………………
10. Do you have a basic knowledge and understanding of the risks to which insurance
30.
entities are exposed?
…………………………………………………………………………………
11. Have you acquainted yourself with, and do you understand, the extent of the rights
31.
and powers, as well as your responsibilities and duties as a director of the institution,
as contained in the applicable law? (To be completed only by directors or prospective
directors.)
………………………………………………………………………………..…
30th December, 2022
Statutory Instruments
1453
DECLARATION
I ........................................................... hereby declare the following: This statement consists
of…........... pages, each signed by me. The content of this declaration is true to the best of my
knowledge and belief. I am aware that should it be submitted as evidence and I know that
something appears therein that I know to be false or believe not to be true; I may be liable to
prosecution.
I undertake, that for as long as I continue to be a director or executive officer of the institution,
I will notify the Registrar of any changes to, or affecting the completeness or accuracy of the
information supplied by me as soon as possible, but in any event not later than 21 days from
the day that the changes come to my attention.
I know and understand the content of this declaration. I have */do not have* objections to
taking the prescribed oath.
I consider the prescribed oath to be binding */not binding* on my conscience.
.............................................
Signature of deponent
I certify that the above statement was taken before me and that the deponent has acknowledged
that he*/she knows and understands the content of this statement. This statement was sworn
to*/affirmed before me and the deponent's signature was placed thereon in my presence
at.............. on this ........day of................ two thousand and................................................
……………….…………………………….
Commissioner for Oaths
1454
Statutory Instruments
30th December, 2022
Form XIII
(Regulations 22(5) and 22(6))
The Insurance Act, 2021
(Act No. 38 of 2021)
_____________
The Insurance (General) Regulations, 2022
APPROVAL/REJECTION OF APPOINTMENT
1.Here insert
the full names
and address of
applicant
(2) insert the
licensee for
which the
appointment
relates
TO (1) ..............................................................................................................
IN THE MATTER OF
that
your
(2)
application
................................................... you are notified
for
approval
of
appointment
has
been
APPROVED/REJECTED on the following grounds:
(a) .................................................................................................................
(b) ……………………………………………………………………….…
(c) ………………………………………………………………………..…
Dated this ................... day of ......................................... 20..................
...............................................
Registrar
30th December, 2022
Statutory Instruments
1455
THIRD SCHEDULE
(Regulations 6, 9, 11, 17, 18 and 38)
Prescribed Fees
Item
1.
Fee Units
Application and Annual licence fee:
Insurance/Reinsurance
20,000
Insurance Brokering/Loss
Adjustering/Underwriting Agent
10,000
Insurance Agency
4,000
Claims Agent/Risk Surveyor/Assessor
6,000
2.
Search of Register
3.
Amendment of a licence
4.
Duplicate licence
300
1,000
500
1456
Statutory Instruments
30th December, 2022
FOURTH SCHEDULE
(Regulation 23)
QUALIFICATIONS OF SENIOR OFFICERS
Type of Licensee
Insurer/Reinsurer
Required qualification
Chief Executive Officer – Minimum of a degree in
Insurance studies, Business Studies, Economics,
Accounting, Finance, Engineering, Actuarial Science or
equivalent.
Member of the Insurance Institute of Zambia
10
years’
management
experience in
the financial
sector, at least
5 of which
shall be in
insurance
business.
Chief Financial Officer – Association of Chartered
Certified Accountants /Chartered Institute of Management
Accountants/Chartered Accountant Zambia or equivalent
qualifications approved by Zambia Institute of Chartered
Accountants and a member of Zambia Institute of
Chartered Accountants.
7 years’ post
qualifying
experience in
a Finance Role
Chief Operating Officer – Degree in Insurance studies,
Business Studies, Economics, Accounting, Finance,
Engineering, Actuarial Science or equivalent.
7
years’
experience in
an
underwriting
role
Member of the Insurance Institute of Zambia
Insurance Broker
Minimu
m
Experie
nce
Chief Executive Officer – Diploma in Insurance Studies
Member of the Insurance Institute of Zambia
Chief Financial Officer /Accountant – member of Zambia
Institute of Chartered Accountants
7
years’
management
experience in
the financial
sector, at least
5 of which are
in insurance
business.
None
23rd December, 2022
Insurance Agent
Claims agent
Statutory Instruments
Chief Executive Officer – Certificate of competence in
insurance and a member of Insurance Institute of Zambia
Member of the Insurance Institute of Zambia
Chief Executive Officer – Diploma in Insurance Studies or
in their field of specialty
Member of the Insurance Institute of Zambia
Risk surveyor
Chief Executive Officer – Diploma in insurance studies,
risk management or field in which they are to be licensed.
1457
None
5
years’
experience in
the insurance
industry
handling
claims
5
years’
experience in
risk surveying
Member of the Insurance Institute of Zambia
Loss Adjustor
Chief Executive Officer – Diploma in insurance or risk
management
Member of the Insurance Institute of Zambia
Assessor
Chief Executive Officer – Diploma in their fields of
specialty and a competence certificate in insurance
Member of the Insurance Institute of Zambia
Underwriting Agent
Chief Executive Officer – Diploma in insurance studies,
Business Studies, Economics, Accounting, Finance,
Engineering, Actuarial Science or equivalent.
Member of the Insurance Institute of Zambia
5
years’
experience in
loss
adjustering
5
years’
experience in
the insurance
industry
7
years’
experience in
the insurance
industry
1458
Statutory Instruments
30th December, 2022
FIFTH SCHEDULE
(Regulations 24, 25, 26, 27, 28, 29 and 32)
CAPITAL ADEQUACY REQUIREMENTS
Capital Adequacy Requirement (CAR) = (Available Capital/Minimum Capital Requirement) x 100%
𝐶𝐴𝑅 =
(i)
Available Capital (AC )
Minimum Capital Adequacy Requirement (MCR )
x 100%
AVAILABLE CAPITAL
Available Capital = Total Balance Sheet Assets – Disallowable Assets – Total Balance Sheet Liabilities
Where
1.
Total balance sheet asset represents total value of assets derived from International Financial Reporting Standards
audited statement of financial position;
2.
Disallowable assets shall be deducted from the total value of balance sheet assets; and
3.
Total Balance Sheet Liabilities represents total value of liabilities derived from International Financial Reporting
Standards audited statement of financial position.
Notes
The available capital of a licensed insurer or reinsurer shall be divided into Tier 1 and Tier 2 capital.
(ii)
Tier 1 capital shall be the aggregate of issued and fully paid-up ordinary shares, share premiums and retained
profits; and shall be supported by the balance sheet assets of cash and cash equivalents, government securities or
fixed term deposits.
(iii)
Tier 2 capital shall be the aggregate of cumulative irredeemable preference shares, capital stocks and other similar
capital instruments, undisclosed general reserves, subordinated term debts and revaluation reserves for properties.
The available capital of a licensed insurer or reinsurer shall be at least seventy-five percent of Tier 1 capital.
30th December, 2022
(ii)
MINIMUM
CAPITAL
Statutory Instruments
ADEQUANCY
REQUIREMENTS
1459
FOR
GENERAL
INSURERS AND REINSURERS
a.
Minimum Capital Requirement (MCR) = Capital required for balance sheet assets (CBA) + Capital
required for investing above concentration limits (CIL)+ Capital for policy liabilities (CPL) + Capital
required for Catastrophe risks (CCR) + Capital required for reinsurance ceded (CRC)+ Capital required
for Operational risks (COR) + Capital required for guarantee liabilities (CRG)
Where
1.
CBA = BA * F1
2.
CIL = (I – IL) * F1
3.
CPL = (UPR + OCR + IBNR)*10%
4.
CCR = NC * 5%
5.
CRC = RC * F2
6.
COR = NEP * 5%
7.
CGL = GL* 15%
Therefore MCR = ∑ [(BA * F1) + ((I-IL)*F1) + ((UPR + OCR+ IBNR)*10%) + (NC * 5%) + (RC*F2) +
(NEP*5%) + (GL*15%)]
Where
1.
BA means the total balance sheet assets;
2.
F1 means the risk factor provided in Table 1 below;
3.
I means value of investment in an allowable investment;
4.
IL means investment concentration limits provided in Table 2 below;
5.
UPR, IBNR and OCR means the reserves provided under regulations 30 and 31 of these Regulations and Section
62 of the Act respectively;
6.
NC means the preceding year’s gross claims on all classes of business;
7.
RC means reinsurance value ceded to various reinsurers;
8.
F2 means the risk factor provided in Table 3 below;
9.
NEP means the preceding year’s net earned premium on all classes of business;
10. GL means the total sum insured of the guarantee policies or Policies issued by a licensed general insurer.
1460
Table 1:
Statutory Instruments
30th December, 2022
Factors for determination of capital required for balance sheet assets and investments
above concentration limits
For purposes of regulation 26, a licensed insurer shall use the factors provided below to determine the capital
required for balance sheet assets and investing above concentration limits.
FACTOR
ASSET DESCRIPTION
(F1)
0%
2%
3%
4%
8%
10%
15%
30%
40%
































Cash
Deposits in an institution licensed under the Banking and Financial Services Act
Government Securities
Investment income due and accrued from Government Securities
Receivables from other insurance companies
Receivable outstanding for less than 8 months from re-insurers
Receivables outstanding from the Government of the Republic
Premiums receivable for less than 60 days
Deposits in excess of 25% limits per institution licensed under the Banking and
Financial Services Act
Term deposits, Bonds and Debentures expiring or redeemable in one year
Term deposits, Bonds and Debentures expiring or redeemable in one year or less
from Corporations
Residential Mortgage
Term deposits, Bonds and Debentures expiring or redeemable in one year or
more from Corporations
Commercial Mortgage
Other secured loans
Loans to Corporations
Premiums outstanding for 60 days to 1 year
Preference shares
Receivables from Corporations
Shares in listed companies
Investment in collective investment schemes
Investment Properties
Other investments income due and accrued from listed companies
Receivables from related companies outstanding for less than 12 months
Shares in unlisted companies
Land and Building for insurer’s own use
Other investments income due and accrued from unlisted companies
Investments in related companies
Outstanding receivables from re-insurers for more than 8 months but less than
1 year
Premiums outstanding between 1 year and 2 years
Receivables from the related companies outstanding for less than twelve months
For assets classified as “Other Assets” the lesser of o Other Assets capital requirement using this capital charge; or
o 1% of Total Assets
30th December, 2022
100%
UNLISTED
Statutory Instruments
1461




Unsecured loans
Assets situated outside Zambia
Loans to related companies
Loans to directors, Agents and their Associates (including those from
related companies)
 Outstanding premiums for more than 2 years
 Outstanding receivables from re-insurers for more than 1 year
 Outstanding receivables from related companies for more than 1 year
 Fixed assets in excess of their written down values
 Any excess of “Other Assets” over 1% of total assets.
New assets, not currently listed, shall be categorized according to their inherent
risk and this categorization shall be agreed with the Authority.
ASSETS
MULTIPLE
CATEGORIES
Where information is not available to determine the redemption/maturity of an
asset, and the asset falls in more than one category, insurers must use the category
with the highest capital factors for that asset.
Table 2: Investment concentration limits for licensed insurers
For purposes of regulations 26 (a) (ii) and 32, a licensed insurer shall apply the concentration limits set out
below
GENERAL
INSURANCE
LONG-TERM
INSURANCE
1.
Government Securities and Cash
100%
100%
2.
100%
100%
3.
Deposits in Institutions Regulated by Bank of Zambia
(institutional limit of 25%)
Listed Equity
10%
15%
4.
Unlisted Equity
5%
5%
5.
Related Party Investments
5%
5%
6.
Debt Securities – Secured & Listed
5%
10%
7.
Debt Securities – Unsecured & Unlisted
2%
5%
8.
Investment in Fixed Properties
10%
15%
9.
Collective Investment Schemes
0%
7.5%
1462
Table 3:
Statutory Instruments
30th December, 2022
Factors for determination of capital required for reinsurance ceded
For purposes of regulation 26 (a)(v), a licensed insurer shall use the factors provided below to determine
the capital required for reinsurance ceded.
RATING AGENCY
REINSURANCE RATING
Standard & Poors’
Above A
BBB
Below B
Moody’s
Above A
Bbb
Below Bbb
AM Best
Above B+
B,B-
Below B-
Fitch Corporation
Above A
BBB
Below BBB
GCR
Above A-
B,B-
Below B-
Ceding Ratio
Capital Charge on Premium Ceded (F2)
For first 50%
0%
15%
100%
Above 50%
10%
25%
100%
NOTES:
The following cessions shall not attract any capital charge:
1.
Mandatory cessions to ZEP-RE and Africa-Re as provided under Section 78 of the Act;
2.
Mandatory cessions to a National Reinsurance Company as provided under Section 77 of the Act;
3.
Amounts ceded to locally incorporated reinsurance companies, provided that the amount ceded does not exceed 25% of total
4.
Amounts ceded with local licensed reinsurers.
premium ceded per reinsurer; and
30th December, 2022
b.
Statutory Instruments
1463
Paid up share capital requirement
For purposes of regulation 26(b) and 27(c), the paid up share capital requirement is as follows –
Table 4
Entity
(ii)
Amount (K)
General Insurers
10,000,000.00
Long term Insurers
12,000,000.00
Reinsurers
20,000,000.00
DETERMINATION OF MINIMUM CAPITAL ADEQUACY REQUIREMENT FOR
LONG TERM INSURERS
Minimum Capital Adequacy Requirement (MCR) = termination capital adequacy requirement (TCAR)
or ordinary capital adequacy requirement (OCAR) or the paid up share capital
Where:
1. MCR is the higher of TCAR, OCAR or paid up share capital;
2.
TCAR is as defined in regulation 2;
3.
OCAR is as calculated in Table 5 below; and
4.
The paid up share capital is as indicated in Table 4 above.
Table 5 Determination of ordinary capital adequacy requirement for long term insurer or
reinsurer
For purposes of regulation 28, the actuary of the long term insurer shall apply the following formulas to
determine the ordinary capital requirement:
Determination
of
Ordinary
Capital
Adequacy
requirement
The ordinary capital adequacy requirement (OCAR) shall be determined
by the formula below;
𝑂𝐶𝐴𝑅 =
IOCAR
(1 − K)
Where:
i.
“IOCAR” is the intermediate capital adequacy requirement that
takes into consideration a fall in the fair value of assets backing
the ordinary capital requirement and associated credit risk of
those assets determined using the following formulae;
1464
Determination
of
Ordinary
Capital
Adequacy
requirement
Statutory Instruments
30th December, 2022
The ordinary capital adequacy requirement (OCAR) shall be determined
by the formula below;
𝑂𝐶𝐴𝑅 =
IOCAR
(1 − K)
Where:
i.
“IOCAR” is the intermediate capital adequacy requirement that
takes into consideration a fall in the fair value of assets backing
the ordinary capital requirement and associated credit risk of
those assets determined using the following formulae;
ii.
Items “a” to “i” refers to individual risk components of the
ordinary capital adequacy requirement that shall be determined as
shown below.
o
o
o
o
o
o
o
o
o
“a” is the lapse risk (for policies with no surrender values);
“b” is the surrender risk;
“c” is the mortality, morbidity and medical fluctuation risk;
“d” is the Annuitant mortality fluctuation risk;
“e” is the mortality, morbidity and medical assumption risk;
“f” is the expense fluctuation and assumption risk;
“g” is the investment risk;
“h” is the credit risk;
“i” is the operational and other risks
and
i.
ii.
“g” - factor considers the resilience risk of assets backing the
ordinary capital adequacy requirement and shall be calculated using
the resilience capital adequacy requirement percentages described
under the investment risk category below.
“h” – factor considers the credit risk of assets backing the ordinary
capital adequacy requirement and shall be calculated as follows;
Where:
 “fi” is the factor for credit rating “I” as given in Table 1
below; and
30th December, 2022
Statutory Instruments
1465
Intermediate capital adequacy requirements (IOCAR) risk categories for determining the ordinary
capital adequacy requirement
Item (a): Lapse risk
(for policies with no
surrender values)
(1) The lapse risk capital requirement shall be equal to 40 percent of the
amount required to ensure that no policy has a negative liability before
taking into account the effect of any negative bonus stabilization reserve.
(2) The actuary of the licensed insurer shall consider additional margins
where:
(a) the office’s lapse experience fluctuates significantly from year to
year or the trend in lapses has been worsening over time; and
(b) the typical level of base lapses is in excess of the requirement
outlined in (1) above.
Item (b): Surrender
risk
(1) The surrender risk capital requirement shall be equal to 20 percent of the
amount required to ensure that no policy’s liability, before taking into
account the effect of any negative bonus stabilisation reserve, is less than
its current surrender value.
(2) For policies that cannot be surrendered or transferred from the long-term
insurer, the amount shall be zero.
(3) The long term insurer shall consider additional margins to the factor
where:
(a) material surrender values are guaranteed;
(b) the insurer has created expectations of stabilised future surrender
values at the point of sale or in regular correspondence with
policyholders; and
(c) the typical level of surrenders is in excess of 10% of in-force policies
per annum.
1466
Item (c): Mortality,
morbidity and
medical fluctuation
risk
Statutory Instruments
30th December, 2022
(1) In providing for fluctuations in experience over the valuation period, the
insurer shall set the medical fluctuation risk Intermediate ordinary capital
requirement at (3) three times the mortality fluctuation risk IOCAR.
(2) The following factors shall be used in determining this requirement:
Where:


“n” is number of lives assured in the category (net of lives fully
reinsured); and
“p” is annual risk premium on the valuation basis or expected
strain (net of reinsurance).
(3) The licensed insurer shall consider the following when applying the
formulas above:
(a) The above formulas assume typical spreads of risks, where this is
not the case, the licensed insurer shall consider calculating separate
fluctuation capital adequacy requirements for different
homogeneous groups and set aside the sum of these capital
requirements;
(b) The fluctuation risk can be decreased by considering suitable
reinsurance, where the long term insurer’s statutory actuary
considers it necessary;
(c) The licensed insurer should note that mortality includes funeral
benefits and accident benefits;
(d) Morbidity includes lump sum disability benefits, dread disease
benefits and income protection benefits;
(e) Medical includes hospital cash plans and major medical benefits;
(f) The licensed insurer shall further note the annual risk premium on
the valuation basis or expected strain (net of reinsurance), “p” above
and should include any relevant option premiums.
30th December, 2022
Item (d): Annuitant
mortality fluctuation
risk
Statutory Instruments
1467
(1) The annuitant mortality fluctuation capital adequacy requirement shall
be equal to;
Where:


Item (e): Mortality,
Morbidity and
Medical assumption
risk
“r” is the statutory valuation method reserves for the relevant
(i.e. where mortality plays a role) annuity portfolios on the
valuation date; and
“n” is number of annuitants in the relevant category.
(1) The mortality, morbidity, medical assumption capital adequacy
requirement (also referred to as AIDS assumption) shall be equal to onethird of the best estimate AIDS liability.
(2) Where the long term insurer has performed adequate modelling on item
(c) (i.e. mortality, morbidity and the medical fluctuation risk) in addition
to medical compulsory margins and the results leads to a requirement
which exceeds 95 percent confidence interval, no mortality, morbidity
and medical assumption capital adequacy requirement apart from the
AIDS above is thus deemed necessary.
(3) In an addition to (1) one above, the licensed insurer must consider
additional amounts for the following;-
(a)
(b)
(c)
(d)
(e)
new types of benefits;
new distribution channels;
insufficient experience data being available;
experience worsening over time; or
any other relevant factor.
1468
Item (f):
Expense
fluctuation
and
assumption risk
Statutory Instruments
30th December, 2022
(1) The expense fluctuation capital adequacy requirement shall be equal to
10% of all renewal expenses in the previous year (excluding commission
and other related acquisition costs).
(2) The insurer shall, in addition to the above amount, consider additional
factors where:
(a) new business figures historically have deviated by more than 20%
from budgets or expenses are unpredictable;
(b) the insurer is rapidly growing and expenses are unpredictable; or
(c) the life insurer has recently launched a new class of policy with a
substantially different expense structure to existing Policies; and
(d) lines of business not discounted on a cash flow bases.
Item (g): Investment
Risk
(1) The investment risk capital adequacy requirement shall be equal to the
greater of item (gi) and item (gii), as defined below;
Item (gi): Resilience Capital Adequacy Requirement
(a)The long term insurer must consider the valuation of assets assuming
a fall in the fair values of the assets backing the liabilities on the
valuation date for purpose of the resilience Capital Adequacy
Requirement to test the robustness of the financial position of a longterm insurer in the face of volatile market conditions on parameters
listed below;
Type of asset
Fall in fair value
Equities
LUSE All Share dividend
yield
below 4%
30% fall in value
LUSE All Share dividend
yield
5% or above
20% fall in value
LUSE All Share dividend
yield at 4%
or above, but below 5%
Interpolate between 20% and 30%
Fixed property
15% fall in value
30th December, 2022
Statutory Instruments
1469
Fixed interest
Impact of 25% relative increase/decrease in yield to
maturity (i.e. when yields are 10%, test resilience to
both 7.5% and 12.5% yield environments)
Inflation linked Securities
Impact of increase/decrease in real yield to maturity
by factor of 25% of real yield to maturity (i.e., a real
yield of 4% increases to 5%).
Cash and similar floating No change in value
interest rate assets
Other assets
35% fall in value
Foreign
currency Same as for domestic assets subject to a minimum of
denominated assets
20% fall in value
Note 1: For fixed interest and inflation linked bonds, the long term insurer shall determine
whether an increase or decrease will lead to the highest Capital Adequacy Requirements on
total life fund. The Statutory Actuary must use the yield movement that produces the highest
CAR.
Note 2: For assets not listed in this table, for example unlisted holdings and preference shares, the
licensed insurer shall be guided by the fall in fair value of the closest equivalent(s) listed above.
(a)The resilience Capital Adequacy Requirement shall be determined as follows:
(A0 – L0) – (A1 – L1) = L1 – A1
Where:
L0 = is the Statutory valuation method liabilities (including any bonus stabilisation
reserves) at the valuation date.
A0 = L0 (i.e. the assets necessary to back the liabilities at the valuation date)
L1 = Statutory valuation method liabilities after the assumed fall in fair value (before
deduction of the absolute value of any negative bonus stabilisation reserve),
reduced by the effect of any proposed management actions e.g. lower bonus
rates.
A1 = Value of the assets (A0) after the assumed fall in fair value
1470
Statutory Instruments
30th December, 2022
Notes:
(a) Assume that fair values will not recover (within a short period).
(b) For options and futures, the long-term insurer’s exposure to the relevant assets (e.g.
equities) must be taken into account when calculating this requirement.
(c) For fixed income assets, long-term insurer must determine whether an increase or
decrease will lead to the highest capital adequacy requirements on the total life fund the insurer must use the yield movement that produces the highest capital adequacy
requirement.
(d) Where share capital invested in foreign assets is used to cover the OCAR, assume that
these foreign assets have the same assumed fall as Zambia Kwacha denominated
assets, but with an allowance for exchange rate volatility and subject to a minimum
fall of 20% per asset class. This in turn implies that any offshore assets used will result
in a minimum “up-ratio factor” of 20% in the determination of OCAR from IOCAR.
(1) Item (gii): Worse investment return Capital Adequacy Requirement
(a) The licensed insurer shall assume a 15 percent relative reduction in future
investment - “worse investment return” scenario or assume a future investment
return equal to 0.85x the valuation assumption.
(b) The worse
investment
return
shall be equal to or determined as follows:
Capital, Adequacy
Requirement
(A0 – L0) – (A1 – L1) = L1 – A1
Where:
L0 = Statutory
valuation
method liabilities (including any
stabilization reserves) at the valuation date
bonus
A0 = L0 (i.e. the assets necessary to back the liabilities at the valuation date)
L1 = Statutory valuation method liabilities assuming the worse investment return scenario (before
deduction of the absolute value of any
30th December, 2022
Item (i): Credit Risk
Statutory Instruments
(1) The credit risk capital adequacy requirement item shall consider the
inability or unwillingness of a counterparty to fully meet its on- or offbalance sheet contractual obligations inherent in various assets held by
the long-term insurer.
(2) For each of the discretionary participation and non-profit components the
credit risk capital adequacy requirement shall be equal to:
∑𝐀𝐥𝐥 𝐢(𝐟𝐢 × 𝐌𝐕𝐢 )
Where:
 Fi = is the factor for credit rating I as given in the table below;
and
 MVi = is the market value of the aggregate holding of assets
with credit rating I backing each of the non-profit and
discretionary policy liability portfolios.
(3) The long-term insurer shall use the credit risk factor table below to
determine the credit risk capital adequacy requirement.
1471
1472
Statutory Instruments
30th December, 2022
Factor (f)
Duration in years
Credit
Rating
cash
1
2
AAA
0.10% 0.14% 0.27%
AA+
0.10% 0.14% 0.27%
AA
0.19% 0.26% 0.44%
AA0.27% 0.36% 0.58%
A+
0.49% 0.65% 0.96%
A
0.68% 0.91% 1.28%
A0.80% 1.07% 1.48%
BBB+
1.08% 1.44% 1.92%
BBB
1.37% 1.83% 2.38%
BBB2.60% 2.75% 3.42%
BB+
2.56% 3.41% 4.15%
BB
3.27% 4.36% 5.17%
BB4.35% 5.81% 6.69%
B+
5.68% 7.58% 8.50%
B
7.96% 10.62% 11.55%
B10.10% 13.47% 14.42%
CCC+
14.47% 19.29% 20.17%
CCC
15.38% 20.51% 21.33%
CCC15.86% 21.15% 21.91%
Table 1: Credit Risk Factors
3
0.40%
0.40%
0.62%
0.80%
1.27%
1.66%
1.89%
2.40%
2.92%
4.09%
4.89%
5.99%
7.58%
9.42%
12.49%
15.36%
21.05%
22.15%
22.67%
5
0.65%
0.65%
0.98%
1.24%
1.88%
2.40%
2.70%
3.35%
4.01%
5.43%
6.37%
7.62%
9.36%
11.26%
14.35%
17.26%
22.82%
23.80%
24.19%
10
1.30%
1.30%
1.88%
2.34%
3.42%
4.26%
4.73%
5.75%
6.74%
8.78%
10.06%
11.70%
13.80%
15.87%
19.02%
21.99%
27.22%
27.91%
27.98%
15
1.94%
1.94%
2.78%
3.44%
4.96%
6.11%
6.77%
8.14%
9.46%
12.14%
13.76%
15.78%
18.24%
20.47%
23.69%
26.73%
31.62%
32.02%
32.02%
20
2.58%
2.58%
3.68%
4.54%
6.49%
7.97%
8.80%
10.54%
12.19%
15.49%
17.46%
19.86%
22.68%
25.08%
28.36%
31.46%
36.02%
36.13%
36.12%
Table 1: Credit Risk Factors
(1)
(4) The credit ratings shall be based on Standard and Poor’s International Scale and local Currency
rating, where other rating agencies and methods are used, the long term insurer shall use factors
corresponding to the comparable S&P International Scale, Local Currency rating.
(2)
(5) Where the instrument does not have a credit rating but the asset is exposed to a credit-rated
counterparty, then the exposure to the counterparty is aggregated and this shall constitutes MVi.
(3) Where there is no rating for an instrument, or the credit counterparty has not been rated, an
(6)
internal company rating may be used.
(7) For government debt and debt instruments carrying an explicit Zambian Government guarantee
(4)
and issued in the Zambia Kwacha, a factor of 0% shall be applied.
(5) The following assets shall be considered by the long term insurer when determining the credit
(8)
risk exposure of assets -
(a) Bonds and short-term deposits (promissory notes, letters of credit, convertibles, etc)
(b) Preference shares (if not allowed for as an equity investment in determining (gi) above)
(c) Risk profile of the business
(d) The capital levels required by rating agencies for the company’s required credit rating
(e) The capital levels being maintained by competitors
(f) How the capital itself is invested
(g) The relative level of the investment markets at the time
30th December, 2022
(ii)
(iv)
Statutory Instruments
1473
DETERMINATION OF LIABILITIES
For the purposes of regulation 29, the actuary of the insurer shall determine the value of liabilities
in accordance with the table below:
Risk
Compulsory Margin as a Percentage of the Base Assumption
Mortality
7.5% (increase for assurance, decrease for annuities
Morbidity
10%
Health Events
15%
Lapses
25%
Interest rate
0.50 percentage points per year in the management fee, or an
equivalent asset-based or investment performance-based margin
Termination of disability
income benefits in payment
10% of claims reserve
Surrenders
10% (increase or decrease in surrender rate depending on which
alternative gives rise to an increase in liability of the policy
concerned)
Expenses
10%
Expense inflation
10% (of the estimated escalation rate)
Charges under linked life
Policies
A reduction of 0.25 percentage points
LUSAKA
13th December, 2022
[MF/IDM/101/39/1]
DR S. MUSOKOTWANE,
Minister of Finance and
National Planning
1474
Statutory Instruments
30th December, 2022