To all policy holders the Constantia Insurance Company Limited is being liquidated. If you have a policy pay careful attention.
It should be noted that on 26 July 2022, the Gauteng Division of the High Court placed Constantia Insurance Company Limited (CICL) under provisional curatorship due to the insurer’s failure to meet its minimum capital and solvency requirements.
According to the Financial Sector Conduct Authority (FSCA), The Prudential Authority (PA) also directed CICL to stop taking on any new business to help prevent a further deterioration of its finances and to protect policyholders while the provisional curator made attempts to find potential investors to restore the insurer’s financial position to an acceptable level.
The FSCA states that despite efforts by the provisional curator to restore CICL’s financial position and save the business, the provisional curator concluded that CICL is insolvent and that there are no reasonable prospects of salvaging its financial position.
In a statement, the FSCA states that the provisional curator recommended to the PA that CICL should be placed under liquidation.
On 14 September 2022, the Gauteng Division of the High Court granted an order placing CICL under final liquidation.
Further details about the liquidation, including important information about the impact of the liquidation on existing CICL policies can be found on the PA’s website at this link.
The FSCA said that they are aware that the provisional curatorship and liquidation of CICL have significantly impacted current CICL policyholders as well as underwriting managers and other intermediaries that have existing business relationships with CICL.
It should be noted that the FSCA is also aware that other insurers have engaged in negotiations to take over insurance policies previously underwritten by CICL.
The FSCA said that they welcomed proactive engagements with such parties to ensure that any such negotiations and potential changes in insurance cover are done responsibly, with due regard to applicable regulatory requirements and in the best interests of policyholders.
It should be noted that failure by any impacted insurer, underwriting manager or intermediary to act in the best interests of policyholders may result in regulatory action being taken by the FSCA.
PLEASE TAKE NOTE!
The FSCA states that existing CICL policyholders must please note that their current policies with CICL will terminate on 30 September 2022.
Policyholders will need to secure cover with new insurers with effect from 1 October 2022.
The FSCA recognises that this may not provide brokers with sufficient time to contact all impacted policyholders to give them options for suitable alternative cover.
It is with this in mind that the FSCA strongly encourages CICL policyholders to urgently contact their brokers or financial advisers for future coverage options to ensure uninterrupted insurance cover.
The FSCA said that in addition, the company noted with concern that certain CICL policyholders, with valid motor vehicle claims, are experiencing challenges with securing the release of their vehicles from service providers such as panel beaters and auto-body repair shops due to non-payment of claims by CICL.
This is resulting in grave inconvenience and unnecessary storage costs for policyholders.
The FSCA urges service providers to immediately release vehicles if no repairs have been made or to allow claimants to settle payments directly to secure the release of their vehicles.
Policyholders who have questions or concerns about their current CICL policies or the status of their claims must contact the liquidators of CICL: Mr Cloete Murray and Mr Zaheer Cassim.
BUSINESS REPORT