MORE than K400 billion worth of insurance premiums went out of Zambia in 2010 and the Government is concerned about the country's continued loss of funds through reinsurance payments.
Acting president Alexander Chikwanda said the country lost aboutK410 billion as reinsurance outlay out of a total of K838 billionpremium incomes generated in 2010.
The K410 billion lost out represents about 49 per cent of the totalinsurance income generated during the period.
Mr Chikwanda who is Finance Minister said yesterday that thereinsurance figures had continued to rise instead of decreasing, asituation which should be avoided.
He said this during the official opening of the Prima House whichbelongs to Prima Reinsurance Plc in Lusaka.
He directed the Pension and Insurance Authority (PIA) to include inthe proposed Bill a provision concerning the filling up of the localcapacity before a risk could be reinsured outside the country.
He said the move would enhance the capacity and growth of the localinsurance market and allow for the retention of more premiums locally.
Mr Chikwanda said the PIA should speed up the development of theregulations to assist with the implementation of the Act and addresscritical issues like the challenges of low capitalisation among thelocal insurers.
"As Government, we are not happy to see these huge and avoidable outflows.
"I, therefore, suggest to the PIA to include in the proposed Bill aprovision concerning the filling up of the local capacity before arisk can be reinsured outside the country.
This is the case in othercountries within the region," he said.There are currently three reinsurance companies in the country whilethere are 23 insurance ones and more than 40 insurance brokers.
Mr Chikwanda said the government was encouraging participation of the private sector in the insurance and other industries.
"The Finance Sector Development Plan is one such important policydocument that seeks to provide a conducive environment in which the private sector can do business through the modernisation andharmonisation of laws relating to the financial sector," he said.