The Botswana IFSC has identified International insurance as a strategic growth sector. International insurance is a globally traded business and the sector’s requirements for growth and success fit in well with Botswana’s fundamental strengths. Botswana has no exchange controls, which allows the flexibility of free movement of capital. The country is a lower cost environment compared to traditional European and Caribbean offshore jurisdictions. Further, the Botswana IFSC framework provides for full transparency, applies a complete information exchange programme through a double taxation treaty network and requires the establishment of genuine and substantive economic activity in the country.
The Botswana Government has set up specific legislation and regulatory framework to place the Botswana IFSC in an advantageous position to capture multi-country insurance products domiciled in Africa with an ability to be offered in other countries. The International Insurance Act provides for the carrying of internationally traded insurance activities as opposed to domestic insurance services.
The promulgation of the International Insurance Act and Regulations now allows for the provision of a varied range of cross-border activities including re-insurance, life assurance and captive insurance within the Botswana IFSC. Further, the Bill confers legal status and creates a regulatory framework for the carrying on of international insurance activities from the Botswana IFSC. This legislation allows Botswana Authorities to address the prudential concerns related to reinsurance operations and protect the integrity of both their businesses, Botswana and the Botswana IFSC.
International Insurance Review
Emiritus International formaly ZimRe Botswana Holdings is accredited within the Botswana IFSC Framework under the international Insurance legislation. Emiritus International intends to establish international reinsurance operations in Botswana in partnership with international partners for purposes of transacting both general and life assurance business. The company will also provide enterprise wide risk management services to its clientele and management of captive insurance companies. The sponsor, Emiritus International is a financial group listed on the Zimbabwe Stock Exchange.
The establishment of Emiritus International will be followed by a domestic reinsurance subsidiary that will be the first provider of local reinsurance services to insurance industry in Botswana. The introduction of reinsurance activity as a new financial product in the market will deepen the Botswana financial services sector in line with key objectives of the Botswana IFSC framework.
Domestic business will underwrite reinsurance for Fire, Motor, Personal Accident, Workman’s compensation, Liability, Credit and Surety, Marine and Aviation, Miscellaneous Accident and Life products. Other products will be introduced in the market over time across Africa. Special attention will be accorded towards energy business development given the discovery of oil, gas and other energy forms in Africa especially in Angola, Zambia, Malawi, and Mozambique. Targeted African countries for this operation include South Africa, Democratic of Congo Gabon, Guinea, Angola, Senegal, Congo Brazzaville and Morocco.
Provision of domestic reinsurance services in place of foreign reinsurers by Emiritus International will result in huge foreign currency savings through reduced premium outflows. This project will bring in foreign capital inflow of least US$20 million, most of which will be invested in Botswana’s money and stock exchange.
Insurance Regulation and Legislation