Regulator keeps eagle eye on troubled Zim insurer

INSURANCE sector regulator, Insurance and Pensions Commission (Ipec) has moved to protect policyholder interests in two local entities under its purview after their holding company was slapped with a lawsuit in Zambia.

The firms, Evolution Insurance Company and Evolution Health and Life Assurance Company, are part of a diversified Zimbabwean outfit called Evolution Group, which is alleged to have failed to settle a US$150 000 loan advanced by Lusaka’s Pan African Building Society (PABS) in 2015.

The Evolution Group was at the time said to had been talking to a Zambian firm called African Zambezi Limited to ink a merger deal.

The loan was supposed to be settled within 90 days from March 2015 at 15% interest rate, according to court documents seen by NewsDay Business last week.

Ipec commissioner Grace Muradzikwa confirmed receiving the case but said the regulator was interested in how the case will affect Evolution Insurance Company and Evolution Health and Life Assurance Company, not the entire group.

“We note that the loan was extended to Evolution Group and not our regulated entities,” Muradzikwa said.

“As you may be aware, the Evolution Group is a legal persona, which can sue or be sued. That notwithstanding, the commission is engaging with relevant stakeholders on the matter to ensure policyholder interests are protected,” she said.

Zimbabweans Maita Nzuwah and Ben Mundangepfupfu are directors of Evolution Insurance Company and Evolution Health and Life Assurance Company.

In the court papers, PABS claimed that Evolution Group failed to honour its repayment obligation in October 2015.

But the Zimbabwean firm denied ever getting a loan from PASB.

“The plaintiff (PABS) has suffered loss and damages,” the court papers claimed.

“It is the plaintiff’s further contention that the defendant has refused or neglected to attend to payment as demanded and the defendant has no defence whatsoever to the plaintiff’s claim.”

But Evolution Group argued that its board never approved the agreement, which it said violated exchange control regulations.

Evolution Group said it was only advanced funds by African Zambezi Limited as part of merger deal.

“The funds were remitted as a straight inter-company advance and only became an issue when the merger process stalled,” Evolution Group said.

“Further, the defendant denies that the loan fell due on 8th October 2015, or that the plaintiff effected demand on the defendant for payment of US$159 534,25 or that it refused or neglected to attend to payment as demanded,” it argued.

Details of the case contained in court papers showed there were attempts two months ago to attach the two firms’ assets but Nzuwah and Mundangepfupfu argued that the property did not belong to Evolution Group.

They said the two firms did not conduct any business with PABS.-newsday.co.zw