Guardrisk Life to underwrite insurance for African Bank
The curator of African Bank has announced that the African Insurance Group (InsureCo), the company which will hold all insurance interests as part of the GoodBank Group under the Good Bank restructuring proposal, has concluded an agreement with Guardrisk Life in respect of a captive cell within that company.
InsureCo is a fellow subsidiary of Good Bank, both of which are held 100 percent by African Bank Holdings (New HoldCo).
The Guardrisk cell captive commenced providing credit life and other insurance underwriting arrangements for African Bank’s new business from 17 January 2016 and will do so in respect of Good Bank’s new business with effect from the targeted Transaction Effective Date (TED) of 4 April 2016.
African Bank has concluded a funding arrangement to provide InsureCo with the necessary capital in order to allow the commencement of operations under the agreement. This funding arrangement is expected to be transferred to the Good Bank, on 4 April 2016, subject to the anticipated conclusion of the Good Bank restructuring proposal.
The cell captive arrangement enables InsureCo to insure the new African Bank and Good Bank customer risk exposures through an equity participation in Guardrisk known as a ‘cell’. These arrangements typically allow participants to enjoy all the benefits of owning its own insurance company without the inherent cost and administrative implications of doing so.