Contents

INTRODUCTION........................................................................................................1

CAUSES OF THE COLLAPSE IN THE INSURANCE SECTOR............................................3

The Crises......................................................................................................6

FINANCIAL SECTOR ADJUSTMENT COMPANY.............................................................9

FINSAC: Role, Function & Structure................................................................10
How FINSAC addressed the insurance sector..................................................11
Intervention, Rehabilitation & Divestment.......................................................14

THE INSURANCE ACT, MAT AND MCCSR..................................................................20

The Minimum Asset Test................................................................................21
Minimum Continuing Capital Surplus Requirement...........................................23
Changes in minimum solvency rates...............................................................24
Insurance Act of 2001...................................................................................25

THE FINANCIAL SERVICES COMMISSION.................................................................29

Market Conduct.............................................................................................30
The FSC’s Mandate........................................................................................31

CONCLUSION..........................................................................................................34

REFERENCES..........................................................................................................35