04 May 2015

FSC appoints Special Administrators for the BAI Co. (Mtius) Ltd

The Financial Services Commission (FSC) has appointed Messrs Mushtaq M. O. Noormohamed Oosman, FCA, and Yogesh Rai Basgeet, ACA, as Special Administrators of the BAI Co. (Mtius) Ltd and any of its related companies with effect from Friday 1st May 2015.

The appointment follows the passing of the Insurance (Amendment) Bill at the National Assembly on Tuesday 28 April 2015 which, among others, enables the Minister to request the FSC to appoint a special administrator where he is satisfied, on the basis of a report submitted by the Commission, that the liabilities of an insurer and any of its related companies exceed its assets by at least one billion rupees and that such excess is likely to be a threat to the stability and soundness of the financial system of Mauritius.

Debating on the bill at the National Assembly last Tuesday, the Minister of Financial Services, Good Governance and Institutional Reforms, Mr Sudarshan Bhadain, recalled that since 03 April 2015, the country has witnessed the downfall of a major insurance company in Mauritius, BAI Co. (Mtius) Ltd, which is affecting the lives of over 160,000 citizens. He said that these events clearly highlighted certain loopholes in the Insurance Act, which have been exploited to the detriment of policyholders. The objective of the Insurance (Amendment) Bill, stressed Mr Bhadain, is precisely to bring urgent remedial actions to plug these loopholes for the immediate protection of insurance policyholders.

The Minister is of the view that the amendment will strengthen the protection afforded under the Insurance Act to policy holders, by the appointment of a ‘special administrator’ in cases where the liabilities of an insurer and any of its related companies exceed its assets by at least Rs 1 billion. He added that this measure will safeguard the soundness and stability of the financial system in Mauritius.

According to Mr Bhadain, the Insurance (Amendment) Bill is the first initiative which will kick-start a process of legislative reforms and will go a long way to improve the Financial Services Sector. He stated that the Insurance Act, the Insolvency Act, the Financial Services Act and all other legislations or regulations which touch upon the Financial Services sector will thoroughly screened. “We are going to come up with the perfect legislations for our financial system to operate”, he added.

It is to be noted that the Insurance (Amendment) Bill was passed with an overwhelming majority on Tuesday 28 April 2015. The amendment to the Insurance Act provides, among others, for the Financial Services Commission (FSC) to exercise more effective supervision over related companies of an insurer. The amendment also makes provision for the transfer of undertaking, in whole or in part of an insurer and any of its related companies, to another insurer and any of its related companies.

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