[RwandaLibre] Regulator orders Sonarwa to split business 

 

Regulator orders Sonarwa to split business


By ALEX NGARAMBE Rwanda Today
Posted Friday, February 28 2014 at 19:19

IN SUMMARY
The biggest insurer by market share, controlling 35 per cent, Sonarwa
has been running both policies under one management and board of
directors.

The National Bank of Rwanda (BNR) has told Sonarwa Insurance Company
to separate the management of its life and non-life business.

The biggest insurer by market share, controlling 35 per cent, Sonarwa
has been running both policies under one management and board of
directors.

Sonarwa Holdings Ltd, the umbrella body that handles all insurance
covers as well as the company's investment projects, is forwarding
nominees for the new board of directors to the central bank for
approval.

The new subsidiary, called Sonarwa General Insurance Company Ltd, will
start functioning immediately the regulator approves the nominated
board members.

Sonarwa is the only one of the few remaining insurance companies that
still combine the management of general business and life business.

Legal requirement

"The National Bank of Rwanda, which regulates the industry, has asked
us to have the two businesses separated as required by law," said
Allen Karungi Gatete, head of corporate communications at Sonarwa.

Sonarwa's general insurance products include marine hull, marine
cargo, accident and motor insurance policies. Its life assurance
products include individual life, education endowment plan, loan
protection assurance and pension plan assurance.

ALSO READ: Rwandan insurance companies post 26pc profit growth rate

Ms Gatete added that the regulator asked the insurer to separate the
two functions because there is always a bigger risk running the two
entities as one.

"Pooling resources together for two different investments is exposing
them to higher risks while the funds are for shareholders, thus the
need for the new regulation," she said.

IGI PLC, a Nigerian company, is the biggest shareholder in Sonarwa
with 64 per cent while Rwanda Social Security Board holds 16 per cent
and the remaining shares are held by eight companies.

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