The Prudential Authority of the South African Reserve Bank has granted JSE-listed Capitec Bank – through its wholly-owned subsidiary Capitec Life – the licence it needs to conduct a life insurance business in South Africa.
In a Sens statement released on Tuesday, Capitec says the move to apply for the licence came after changes were proposed to third-party cell captive regulations as well as the strong growth in insured customer numbers.
Before receiving the licence, Capitec had been offering credit life and funeral policies to its customers through two cell captive agreements with the underlying policies underwritten by licensed cell captive insurers.
According to Zurich Insurance Group, cell captive insurers are companies wholly-owned by non-insurers and act as direct insurers or reinsurers for a parent company and its subsidiaries.
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“Capitec Life will, in due course, replace the current cell captive insurers as underwriter of Capitec’s credit life and funeral policies,” the bank said.
“Capitec remains committed to ensuring that its clients continue to enjoy the simple, affordable, accessible and personalised experience to which they are accustomed.”
The share price of the Stellenbosch-based banking and financial services group was up over 5% in afternoon trade on Tuesday, following the announcement, trading at around R1634.63 a share.
Listen: Capitec reports 17% growth in headline earnings
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