For the past few months, the crisis in the Botswana insurance industry has been emerging in flashes, like snap shots.
In September, Minchin and Kelly, lawyers acting for GIB, gave government a 30 day ultimatum to the insurance company P39 million in damages or face litigation.
“Due to your continued unlawful harassment of your client the damages caused by your actions have seriously depleted our clients business.”
The letter of demand follows a ruling by the High Court that an application filed by government for judicial management against GIB in September 2005 was “ill conceived and defective.” GIB argues that the application by government “led to a plethora of cancellation of policies which in turn led to a serious downturn in the income of the company and caused brokers to stop providing new clients and not renewing existing ones.”
Despite the failure of the application, government filed another application which is still pending before the courts. GIB claims that the current application is again giving rise to negative publicity and aggravating the company’s problems.
Thereafter, government got a provisional liquidation order against GIB and then proceeded to instruct the provisional liquidator to immediately close the company and notify all re-insurers, banks, clients, debtors and creditors.
The High Court, however, later ruled that the order for provisional liquidation was “illegally and wrongfully obtained.”
GIB charges that “As a further result of your wrongful actions this again caused clients to cancel policies and all Brokers to cease providing any further business to our clients. This was further exacerbated by the banks closing accounts which also caused non-payment of monthly debits and stop orders.”
Government has, however, brought another application for liquidation, meaning that there is a pending application for judicial management and for liquidation.
This week, the Registrar of Insurance wrote to GIB warning them against operating an insurance business because they do not have a licence.
This comes a few weeks after the Registrar of Insurance dispatched letters to insurance companies informing them that they had cancelled the trading licence of Thebe Insurance Brokers.
