The Johannesburg High Court has placed SaXum Insurance under final liquidation following an urgent application by the Registrar of Short-term Insurance on 12 October.
In launching the application the Registrar was satisfied that it was in the interests of SaXum’s policyholders that the company be placed under liquidation due to its insolvent position.
“SaXum’s insolvency resulted from underwriting losses due to a significant increase in claims, combined with impairments to the value of certain of SaXum’s assets,” the FSB said.
The Court has ordered that SaXum be placed under final winding-up in the hands of the Master of the High Court, Johannesburg. A liquidator will be appointed to manage the affairs of SaXum with the interests of its creditors, including policyholders, in mind.
After launching the application, the Registrar has taken steps to help ensure that no creditor (including policyholders) is preferred over another. The Registrar will work with the liquidator to safeguard the interests of policyholders.
The insurer was prohibited from writing any new short-term insurance business from September 8 earlier in the year and had been given a clear deadline to recapitalise, Jonathan Dixon, deputy executive officer of the FSB’s insurance department, told Business Day Live.
Reinsurers covered the majority of the losses but most of the remaining outstanding claims were motor claims.