3Sixty Life fights on, Ubank is gone. Workers have lost a bank and they are about to lose an insurance company.
Judge Dippenaar took seven months to release the first judgment of 3Sixty Life curatorship in which she ruled to keep 3Sixty Life under curatorship. She even went further and removed Ms Yashoda Ram as curator, replacing her with Tinashe Moshoko.
To recap, the Prudential Authority placed 3Sixty Life under Curatorship after 3Sixty Life breached its minimum capital requirement (MCR) and solvency capital requirement (SCR).
3Sixty Life argued in court that it has provided the capitalisation that would enable it to meet the MCR. The regulator has in any way given concession for all insurance companies who have breached SCR due to Covid an exemption. 3Sixty Life falls into that category of insurance companies.
3Sixty Life argued that based on its recapitalisation it has met its licensing requirement. This determination is made by 3Sixty Life actuaries and its head of actuarial function (HAF).
At any rate that 3Sixty Life has breached its solvency requirement was not a discovery of the Prudential Authority but a report of 3Sixty Life Actuaries and its HAF, the very same people who the Prudential Authority does not believe when they say the internal recapitalisation plan is adequate to meet the MCR and the SCR will be marginally lower but is exempted.
The Prudential Authority does not believe them this time and rushed to court to place 3Sixty Life under curatorship. It is then that the court appointed a curator and went further and appointed a third actuarial services firm to assess the internal recapitalisation plan and concluded from their report that “3Sixty Life ought not to have been placed under curatorship”.
This view of the provisional curator resulted in the Prudential Authority attempting to remove her from office and BDO charging her for misconduct. Eventually she left BDO and has become a truly independent curator.
The are three points that are of curious interest about Judge Dippenaar’s judgment. First the judge dismissed the curator’s report and relied on the BDO and Prudential Authority’s allegations to make her judgment.
If courts can dismiss a curator’s report, what then was the point of curatorship? Then curatorship was a waste of time and shouldn’t have happened in the first place. Secondly, the judge removed Ms Ram as curator and replaced her with Tinashe Mashoko. Tinashe is a BDO Consultant who has written a report submitted under oath that 3Sixty Life should be placed under permanent curatorship. Clearly Tinashe is conflicted and has a prejudged view of 3Sixty Life and therefore should not be appointed to this role.
Importantly, why remove the curator when that case is not before her? Judge Fischer, in dismissing the Prudential Authority’s attempt to remove Ms Ram, invited the Prudential Authority to make a formal curator removal application. Such an application was not made and the terms of its process were clearly set out in Judge Fischer’s judgment, that it should be an oral hearing and under oath. All of that was sidestepped without setting her judgment aside.
Obviously Dippenaar refused to review her own judgment, prompting 3Sixty Life to petition the Supreme Court of Appeal. It is not clear if this case will take 18 months, like Bophelo Life, to be heard, but Msibi said 3Sixty Life Board resolved to pursue this case even to the Constitutional Court if need be.
This act by 3Sixty Life is an act of bravery against a regulator that has throttled it for 12 months now, preventing 3Sixty Life from writing new business. Any business that doesn’t grow will eventually die, killed by those who throttled it.
For 3Sixty Life to continue to honour its obligations to creditors and policyholders even after 12 months of curatorship should have indicated to the Prudential Authority that 3Sixty Life is resilient. The regulator should question its strategy and the motives of those who put 3Sixty Life under curatorship. Is it a small matter that Kuben Naidoo was removed as Prudential Authority chief and Suzette Volgesend had a quiet exit from the Prudential Authority’s office?
The National Union of Mine Workers has recently lost its bank, the only remaining black bank when it was placed under curatorship. UBank, as it was known, was placed under curatorship by the Prudential Authority (Reserve Bank) and the appointed curator sold it to African Bank for a song within 3 months of curatorship. The Reserve Bank is the shareholder of African Bank, make it make sense.
If 3Sixty Life goes down it will have been put down by the same people who put down UBank, workers will have been robbed of an insurance company and a bank, institutions that both workers and black people have aspired to own. May 3Sixty Life prevail to keep the workers and black people’s aspirations in financial services alive.