3Sixty Life, an underwriter of life insurance and funeral policies, has been placed under provisional curatorship by the Gauteng high court after an urgent application by the Prudential Authority (PA).
The high court provisionally appointed Yashoda Ram, an employee of BDO SA, as the curator of 3Sixty Life, authorising her to take immediate control of the business and take custody of its assets including cash, investments, stocks and any property owned or managed by the insurer.
Ram is also authorised to investigate 3Sixty Life with the view of locating assets belonging to or administered by the company, according to a copy of the Tuesday court order which has been seen by Business Day.
The curatorship of 3Sixty is “in the best interests of its policyholders, due to the insurer’s failure to maintain the minimum capital requirement and the solvency capital requirement, as prescribed in the Insurance Act”, the PA said in a statement on Wednesday. The statement was posted on the website of the Reserve Bank, under whose authority the regulator falls.
The PA will work with the Financial Sector Conduct Authority (FSCA), which is responsible for the regulation of market conduct, to ensure 3Sixty’s policyholders are “properly protected during this process”.
According to 3Sixty Life’s website the company was founded in 1993 as HTG Life but its name was changed to Union Life in January 2008. It was rebranded in 2018 as 3Sixty Life to align with the name of its parent company, 3Sixty Global Solutions Group, which also administers the Sizwe Medical Fund through its subsidiary 3Sixty Health.
The chair of 3Sixty Global Solutions Group also happens to be Khandani Msibi, the group CEO of the investment arm of the National Union of Metal Workers of SA (Numsa). Msibi is also listed on the website of 3Sixty Life as the company’s acting CEO.
Income shortfall
According to the PA’s press statement 3Sixty Life is wholly owned by Doves Group Holdings, which is in turn owned by the Numsa Investment company that is led by Msibi. However, the 3Sixty Global Solutions Group lists Doves Group, which provides funeral and life insurance, as one of its subsidiary companies.
The PA said in its statement that it first became aware that 3Sixty Life had failed to maintain an adequate solvency capital level in November 2020 after the insurer informed the PA that it had experienced higher than usual claims as well as a shortfall in its budgeted premium income due to Covid-19 and subsequent lockdown restrictions.
During 2021 the PA held numerous engagements with 3Sixty Life in an effort to return it to a financially sound position. It included a plan by its main shareholder to recapitalise the company.
The PA subsequently informed 3Sixty Life on November 9 that if the recapitalisation plan had not materialised and its business had not returned to a financially sound position by December 1, it would be prohibited from taking on any new insurance business. The company was also informed that the PA may take further regulatory steps should the recapitalisation plan fail.
After 3Sixty Life failed to restore its business to a financially sound position by the December 1 deadline, the PA applied to the Gauteng high court to place it under curatorship.
“The curatorship presents the most suitable and most effective mechanism to facilitate the orderly management of 3Sixty back to a position of financial soundness,” the PA said in its press statement. “With the appointment of the curator, the board of directors and management of 3Sixty are relieved of their powers and these are now vested in the curator.”
The curator will be required to provide the PA with a two-weekly progress report on the curatorship process and will prepare a report on 3Sixty Life for the high court, which has set a return date of April 12 2022 to allow the insurer or any other interested party to argue why the provisional curatorship order should not be made final.
The PA gave the assurance that the insurance sector “remains safe, sound and adequately capitalised”.
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