By JUDITH NAMUTOWE –
THE Insurers Association of Zambia (IAZ) has urged the Government to expedite enactment of the Insurance Bill of 2013 to promote growth in the sector.
Among the changes being proposed in the Bill is the shareholding structure in which the industry has proposed that there should be a minimum local equity of 30 per cent.
The old Act allowed foreigners to have 100 per cent shareholding, a situation which was depriving the country of the much-needed revenue in that most big contracts were being reinsured outside the country.
The Bill entails limiting the ownership of foreign entities to 70 per cent as opposed to 100 per cent.
IAZ president Shipango Muteto said this would go a long way in addressing capital flight and further contribute to growth of the industry.
“Currently, big risks are being reinsured outside the country with only 10 per cent being retained in Zambia. So once this Bill is enacted, it will limit the amount of money going out of the country and will push the Gross Domestic Product (GDP) contribution to five per cent,” he said.
Mr Muteto said in an interview that restriction of shareholding would encourage foreign entities to come and partner with local companies.
