On 12 October 2016, the Registrar for Short-term Insurance launched an urgent application in the Johannesburg High Court to place SaXum Insurance Limited (SaXum) under final liquidation.
The application is scheduled to be heard by the Johannesburg High Court on Thursday, 20 October 2016.
The Registrar took this action because SaXum is insolvent, and he is satisfied that it is in the interests of SaXum’s policyholders that the company be placed under liquidation. Saxum’s insolvency resulted from underwriting losses due to a significant increase in claims, combined with impairments to the value of certain of SaXum’s assets.
The Registrar’s decision to launch the application follows an intensive process of monitoring SaXum’s financial position and engaging with its shareholders to find a solution to the financial soundness problems. The Registrar prohibited SaXum from carrying on any new short-term insurance business from 8 September 2016. Clear deadlines were set, by which the insurer needed to be recapitalised. The shareholders of SaXum failed to recapitalise the business within these deadlines.
The Registrar is satisfied that policyholders’ interests will be best served by liquidating the insurer in order to prevent the further erosion of SaXum’s assets and to ensure that creditors are treated equally and the claims of some are not preferred over others.
As SaXum is insolvent, it is no longer able to pay policyholder claims or repay collateral amounts. SaXum’s unpaid claims and collateral will be considered by the liquidator as part of the liquidation process, should the application be granted. Policyholder queries can be directed to:
Ms Farzana Badat, Head: Insurance Compliance Department.
T: 012 428 8121