Exim Bank Tanzania has announced its partnership with the Tanzania Insurance Regulatory Authority (TIRA) geared towards operationalizing of the Trust Account for insurance companies.
The move aims at fulfilling the legal requirements and regulations set by the insurance regulatory body and reiterates the bank’s commitment to support growth of Tanzania’s insurance sector.
Speaking during the launch of the Trust Account together with a workshop organized by the bank that brought together various players in the insurance sector including TIRA, Exim Bank and insurance firms, the Exim Bank Chief Executive Officer Jaffari Matundu commended TIRA for offering the bank an opportunity to participate in the establishment of the Insurance Trust Account.
“At Exim Bank, we believe that the insurance sector is a catalyst and can play a crucial role in financial and economic development. We are glad for this opportunity to participate in the establishment of the Insurance Trust Account and we strongly believe that this move will create transparency and accountability in the insurance sector,” he said.
Matundu said the bank has for years been working with a number of insurance companies in the country to offer tailor-made solutions, adding that the bank will continue working with all the stakeholders to support growth of the sector.
“As part of our commitment accelerate insurance uptake, Exim Bank debuted the Insurance Premium
Finance (IPF) Facility, a financing product which allows you to finance your annual insurance premium, rather than pay the lump sum upfront. In repaying fixed monthly amounts, you can avoid premium increases during the year and it allows you to manage your cash flow more effectively,” Matundu said.
He added, “The Insurance Premium Finance (IPF) Facility is available to finance the full premium payment to the Insurance Company giving you the freedom to spread the repayments for the premiums whilst preserving your cash flows for other business opportunities”
The Director of Supervision for Tanzania Insurance Regulatory Authority (TIRA) Abubakar Ndwata during the event said that the Trust Account will help in strengthening management of the insurance sector.
“I take this opportunity to congratulate Exim Bank for being amongst the few big banks in Tanzania to implement the process of establishing a Trust Account. This is a good move that will help strengthen the supervision of the insurance industry in line with the legal and regulatory requirements set out by TIRA,” he said.
Ndwata said that last year TIRA in collaboration with the Association of Tanzania Insurers (ATI), agreed to prepare a Liquidity Management and Investment Guidelines which also directed the establishment of a Trust Account through commercial banks to overcome the problem of capital challenges or failure to pay the claims.
“The decision to open a trust account in commercial banks is a reflection of the challenge, as we will now be able to manage the deposit funds of the insurance companies hence improving the development of the financial sector,” He added that the origin of the Insurance trust account is the Insurance Act of 2009, Section 20, which requires insurance companies to deposit at least 50% of the minimum capital of the insurance company
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