Reserve Bank of Malawi plans insurance capital hike

The Reserve Bank of Malawi (RBM) has proposed an increase in capital requirements for insurance firms from K50 million to K750 million.

RBM initiated the process in 2014 and says it is now engaging insurance companies before a final decision on the matter is made.

RBM publicist Mbane Ngwira said the figure was arrived at after taking into account the reasonable operational requirements in the industry.

“We are now at a consultation phase. The companies have just been informed about consultation meetings that the bank will hold,” said Ngwira.

However, the Chief Executive Officer of Nico General Eric Chapola said this proposal is unrealistic considering capital levels for some small insurance companies who would not be able to raise the proposed amount.

“If this proposal is implemented, some companies will die,” said Chapola in an interview.