Reserve Bank of Malawi (RBM) has said the process of verifying and realising assets of the liquidated Citizen Insurance Company Limited is still in progress.
A statement titled Update on Citizen Insurance Company Limited (In Liquidation) signed by RBM Governor Charles Chuka said they are currently disposing of the remaining assets of the insurance firm.
Citizen Insurance was in 2011 found by the RBM to be in gross breach of the Financial Services laws as management and shareholders of the insurance firm failed to address a number of issues that potentially threatened the interests of policy holders and the public.
However, Chuka, who was appointed liquidator of the process by the Malawi Supreme Court of Appeal, said completion of the liquidation is subject to resolving a number of outstanding court cases and disposal of the remaining real estate properties of the insurance company.
On November 21 2014, the liquidator appointed AMG Global, a firm of chartered accountants to help with the liquidation process, which started on January 26 2015.
The governor said thus far, the central bank has disposed of company’s assets, comprising real estate properties, motor vehicles, shares, furniture and office equipment totalling K59.7 million ($82 802), but expects to collect K162.7 million ($225 659) after the process.
However, this is below claims that have been registered against the insurance company amounting to K742.5 million ($1.1 million), raising questions as to how the outstanding claims will be collected.
RBM spokesperson Mbane Ngwira said in an interview on Tuesday, the central bank will prioritise claims that are more precedent such as staff claims as the law stipulates.
However, he was quick to mention that official communication on the settlement of claims will be formally made.
In a related development, RBM earlier this month, announced the takeover of Prime Insurance Company Limited due to what the central bank said was near insolvent state of the insurance company, giving its shareholders a month before it could recapitalise it.
However, the insurance firm blocked the process through an injunction which restrained the Registrar of Financial Institutions from proceeding with the purported statutory management.