‘Exempt Insurance Companies From Domestic Debt Exchange’
The Ghana Insurers Association (GIA) has asked to be left out of the government’s Domestic Exchange Programme, which is being done as part of the IMF Bailout.
Bondholders are asked to trade in their old domestic bonds for new ones that will be paid off in 2027, 2029, 2032, and 2037.
Seth Aklasi, the president of the GIA, told the press on Friday that insurance companies have put more of their policyholders’ money into securities.
He said that if these funds were taken away, the insurance companies’ planned cash flow to policyholders would slow down, which would eventually put them out of business.
“The National Insurance Commission says that insurance companies put more than GHS 1.5 billion into licensed banks and money market mutual funds.
Since these banks and fund management companies have also invested in government securities, the debt exchange will add to the insurance industry’s investment base, since 40% of our investments are directly linked to government securities. “Another 10% of exposure from licensed banks and fund managers will make our situation even worse,” he said.
The association also asked that some insurance companies funds, which are currently locked up because of the banking sector cleanup that happened in 2017, be released to the affected companies to help improve liquidity.
The association also asked that insurance companies be paid the interest that has built up on the government’s bonds so that they can pay claims that have already been made.
They also said that if their problems are solved, the insurance and reinsurance companies would work with the government to help the country’s economy by giving up all their claims to the financial stabilization fund.
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