Yashoda Ram, the provisional curator of insurance powerhouse 3Sixty Life, will have her report heard today.
In February, Ram submitted an interim report on 3Sixty Life’s recapitalisation in which she found that the planned recapitalisation significantly improved 3Sixty Life’s financial soundness and that curatorship may not have been necessary.
In her final report Ram disagreed with allegations by the Reserve Bank on 3Sixty Life.
3Sixty Life was placed under provisional curatorship by the Reserve Bank’s Prudential Authority on December 21, 2021, with the Reserve Bank nominating Ram as provisional curator.
Cracks soon emerged between the Reserve Bank and Ram when Ram was preparing her report on 3Sixty’s internal recapitalisation plan, but the Reserve Bank launched an urgent court application to have her replaced. At the time, Khandani Msibi, CEO of 3Sixty Global Solutions Group, the holding company of 3Sixty Life, said: “Through the application, the Prudential Authority exposed itself to not have done its homework before placing 3Sixty Life under curatorship and that was embarrassing.”
The court dismissed the Reserve Bank’s application to remove Ram. In her judgment, Gauteng High Court Judge Denise Fisher said: “The fact that Ram may not be as qualified as the applicant believed her to be for whatever reason does not mean she is not performing her function properly”.
In her latest report, Ram maintained that “had due diligence been undertaken by the Reserve Bank on receipt of the internal recapitalisation plan and the authority worked with the licensee to iron out fine creases in the overall proposal, curatorship could have been avoided”.
The report goes further to raise concerns about “scope creep” in relation to the additional allegations against 3Sixty Life, which were not in the application for curatorship. Ram found no evidence to the allegations raised by the Reserve Bank in the application for curatorship relating to payment of claims. In its founding affidavit the Reserve Bank had alleged that 3Sixty Life had not paid claims for benefits due to members of the Chemical Industries National Provident Fund (CINPF).
In his answering affidavit Msibi said 3Sixty Life had paid all valid claims due to CINPF despite premiums outstanding from CINPF to the tune of R9.6 million. In her report Ram noted that “during extra ordinary circumstances endured during the Covid-19 pandemic a time when most insurers were looking for reasons not to pay the higher-than-expected death claims, but 3Sixty Life continued to put their policyholders’ interest first”.
The court is expected to decide on March 22 on whether curatorship of 3Sixty Life is made permanent or is lifted. Like the provisional curator, 3Sixty Life claimed punitive costs against the Reserve Bank’s Prudential Authority and that half of the costs be personally borne by CEO of the Prudential Authority and deputy governor of the Reserve Bank, Kuben Naidoo, and some of his colleagues.
On March 9 the Reserve Bank governor Lesetja Kganyago removed Naidoo as the chief executive of the Prudential Authority.