Bancassurance: A Legislatively premature entry into Zambia

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Ndalameta, Mulopa
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In the merging world of financial services, the concept of bancassurance has assumed a central role in the strategy of a growing number of financial institutions and insurance companies. This paper recognises that each country's unique circumstances require a different approach for bancassurance success. The question is thus entered upon as to whether the approaches attempted in Zambia are supported by the law. The first chapter introduces the concept of bancassurance and highlights its characteristics and nature, bringing the problem into perspective. The chapter that follows argues that bancassurance is impermissible in Zambia against the backdrop of the statutory definition of "banking business" in the Banking and Financial Services Act, Chapter 387 of the Laws of Zambia as read together with s.399 of the Companies Act, Chapter 388 of the Laws of Zambia. For a deeper insight of the issues being grappled with, a comparative analysis of bancassurance as practiced around the world is then presented. The third chapter uses an alternative route to arrive at the conclusion of the previous one by drawing on the anti-trust aspects of bancassurance. It assumes bancassurance to be permissible and hypothesises whether, by virtue of such permission, and/or s.9(2) of the Insurance Act No. 27 of 1997 Parliament can be taken to have undermined the Competition and Consumer Protection Act No. 24 of 2010. The last chapter sums up the findings on the legality of bancassurance and its legislative impediments. It goes on to table, in the alternative, several recommendations regarding the workability of bancassurance. These involve changes to the definition of banking business; distinguishing between agents and distributors in the Competition and Consumer Protection Act; addressing the incompatibility of the per se rules in the Competition and Consumer Protection Act with the market dominance tests that its enforcement requires; and drawing on experiences of others around the world to come up with a comprehensive position of our own.
Banks and banking--Zambia , Insurance,bank--Zambia , Bancassurance