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3Sixty Life provisional curatorship takes a bizarre turn

The Prudential Authority (PA) is seeking to remove Yashoda Ram as the provisional curator of 3Sixty Life on the grounds that her qualifications were misrepresented in the PA’s original interim curatorship application.

Ram disputes the PA’s claims, which resulted in accounting firm BDO suspending her as head of actuarial services a few days later.

3Sixty Life was placed under provisional curatorship in December last year, following an application by the PA, which said the underwriter of life and funeral policies had failed to maintain the minimum capital and solvency capital requirements.

On February 15, the PA filed an urgent motion in the Gauteng High Court seeking to remove Ram.

The PA’s head for banking, insurance and financial markets infrastructure supervision department, Suzette Jeanne Vogelsang, said in a sworn affidavit that its inquiries with the Actuarial Society of SA (Assa) recently revealed that Ram had not completed a degree in actuarial science and was only a student member of Assa, according to a report in the Sowetan.

“Contrary to what is recorded in Ram’s resumé, she didn’t complete the Certified Enterprise Risk Actuary (CERA) course in 2016,” Vogelsang was quoted as saying.

Vogelsang said the PA sought to replace Ram with Tinashe Mashoko as the provisional curator of 3Sixty Life.

“Mashoko is the actuarial specialist at BDO and worked closely with Ram and the team during the provisional curatorship. He is therefore well acquainted with the matter related to 3Sixty,” she said.

In a statement, BDO said it “has become aware of alleged discrepancies in the representation of the qualifications of the BDO employee appointed by the High Court as the provisional curator of 3Sixty Life. BDO has suspended the employee concerned and will conduct a full independent investigation into the matter.”

The firm said it agreed with the PA’s request to replace Ram with Mashoko.

Ram: I never said I had a degree

According to Business Day, which says it has a copy of Ram’s responding affidavit, Ram says she did not submit to the PA that she has a degree in actuarial science, or any degree. Furthermore, she states she did not misrepresent any facts pertaining to qualifications related to her membership of Assa.

Ram says in the affidavit that she informed the PA on 28 January that she did not have a degree in actuarial science, and she was assured by a representative from the regulator that her eligibility as a curator had nothing to do with having a degree.

“The applicant’s representative assured me that I was eligible to act as curator on the basis of my vast experience in the insurance industry,” she said. “It is therefore disingenuous and blatantly untrue that the applicant only recently became aware of my qualifications.”

Ram says she informed the SA Reserve Bank’s legal counsel, Dean Benn, that she had not completed an undergraduate degree or the CERA course.

According to the report, Ram says she expressed reservations to ENSafrica, which was representing the PA, about how her qualifications were referenced in the court documents.

However, Ram acknowledges that the resumé submitted to the court in the PA’s interim curatorship application had erroneously stated she had completed the CERA course.

Although Ram states she signed a confirmatory affidavit to which the resumé was attached as part of court documents, she says she mistakenly overlooked a spelling error in the document that showed she had “completed” the CERA course instead of saying she was still “completing” it.

“I confirm that I did not make this misrepresentation, nor do I know who did,” Business Day quoted Ram as saying.

BDO’s answering affidavit

Business Day also reports that it has obtained the answering affidavit of BDO’s head of financial services, Pierre Jacobs, which was submitted to the court in response to the PA’s application to have Ram replaced as provisional curator.

According to the report, Jacobs says in the affidavit the firm accepts that Ram’s resumé, which was submitted as part of the PA’s provisional curatorship application, was inaccurate in that it should have specifically indicated she was a “student member” of Assa and should not have suggested that she had completed the CERA qualification.

“BDO regrets these inaccuracies and would not have provided Ms Ram’s resumé in the form it did to the authority had it been aware of the inaccuracies contained in the resumé submitted,” Jacobs is quoted as saying.

According to the report, Jacobs’s affidavit states:

  • The documents BDO submitted to the PA when it enquired about the firm’s ability to provide curatorship services included an original version of Ram’s CV, which stated that Ran was a student member of Assa and that she was in the process of “completing” the CERA qualification.
  • During the process of preparing BDO’s formal proposal to supply curatorship services, BDO SA’s Dylan Bywater emailed Ram on October 6, 2021 requesting her latest CV. The next day, Ram responded via email saying she had updated her CV and reworded it in “a few places”.
  • Ram’s updated CV was amended to show she was a member of Assa rather than a student member, while the bullet point relating to the CERA qualification had been altered to remove the word “completing”.

Business Day says it asked Ram about the alleged amendments to her CV, and was told in a statement that “the changes thereafter are done by someone other than Ms Ram”.

The newspaper also reports that Mashoko’s answering affidavit states that at a meeting on January 29 Ram told him that the business of 3Sixty Life had been mismanaged.

“That allegation directly contradicts Ram’s own answering affidavit, which alleges that the reason the PA wants her removed as provisional curator of 3Sixty Life is that she was in the process of drafting a report that would show the provisional curatorship should never have been instituted in the first place,” according to Business Day.

Ram’s report questions need for provisional curatorship

Then, on Monday, Ram released her interim curator’s report, which suggests that the PA might have acted hastily in placing 3Sixty Life under provisional curatorship.

Sixty Life’s capitalisation plan included transferring Doves Group’s property portfolio into 3Sixty Life, which would have boosted 3Sixty Life’s regulatory solvency requirements.

According to Ram, the facts presented in her report, “as well as the expert opinions sourced”, show that if the PA considered the Doves transaction before placing 3Sixty Life under curatorship, “the curatorship would not have been deemed necessary”.

The report said the PA should have considered the asset value that 3Sixty Life would realise after the Doves transaction before placing the insurer under curatorship. She, therefore, commissioned independent experts to value the properties in question.

Since all of them are small residential properties, the experts looked at recent comparable sales of similar properties in the area. They also considered rental capitalisation in some cases. Although the buildings were generally in poor condition, the assessments showed that the properties were valued at R111 million.

The report said property is one of the allowed asset classes when calculating insurer’s solvency requirements.

“In the case of [the minimum capital requirement] for 3Sixty Life as at 7 December 2021, when the transaction was put forward, it would have been reasonable to consider the impact of the asset class to the solvency position of the licence at that time. There is no evidence of this being done,” read the report.

Ram said calculations by specialist actuarial consultants Milliman calculations showed that the Doves transaction would take 3Sixty Life to above the required minimum capital levels.

She said given how the curatorship and the PA’s application for her removal affected the impacted people’s integrity, “one has to consider the motives of all parties concerned”.

The PA said the 3Sixty Life matter is currently subject to the court process and would not comment on Ram’s report.

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