FSA revokes licence of Falcon Insurance Limited |13 February 2024

FSA chief executive Randolf Samson (centre) flanked by Ms Serret (right) and Ms Auguste (Photo: Patrick Joubert)

• No adverse impact on the industry, states FSA

By Patrick Joubert

Falcon Insurance Limited can no longer function as an insurance service provider in Seychelles, now that its licence has been revoked by the Financial Services Authority, effective February 8, 2024.

The statement was made yesterday afternoon by the chief executive of the Financial Services Authority (FSA), Randolf Samson, during a press conference held at the authority’s headquarters, Bois de Rose. Also present were the director insurance, gambling and pension supervision section, Dedrey Serret and legal director Taryn Auguste.

The revocation of Falcon Insurance Limited licence is pursuant to section 110 of the Insurance Act, 2008.

Mr Samson said the complete cancellation of the licence follows its October 2022 suspension whereby FSA, in its capacity as the regulator of the insurance industry, found a number of irregularities and deficiencies relating to the operations of the company during routine regulatory inspections to the insurance company.

“The FSA, through the course of its supervision and monitoring work, had initially identified a number of deficiencies in the company, which resulted in FSA commissioning an in-depth, independent investigation into the affairs of the company,” explained Mr Samson.

“The investigation which resulted in the company having its licence initially suspended and being placed under administration, confirmed that there were several detrimental issues present, which included the lack of internal controls, insolvency issues, lack of proper oversight from the board of directors, conflict of interest, amongst other regulatory issues, which ultimately led to the licence of the company being revoked,” said Mr Samson.

He noted that whilst the company was under administration, the FSA explored whether it would be in the interest of the policy holders, the public at large and the company itself to take remedial action to redress the company.

To this effect, the FSA allowed for sufficient time to properly understand the financial position of the company, to ascertain its viability and solvency going forward so as to establish a responsible way forward.

Following the revocation of the licence, Mr Samson said joint administrator(s) have been appointed in accordance with section 101 of the Insurance Act, 2008 to undertake the needful arrangements for the three staff still at Falcon Insurance as per the procedures of the Seychelles Employment Act and manage the affairs of the company until such time that a liquidator may be appointed to ensure the orderly winding-up of the company.

Mr Samson stated that the FSA would like to reassure the general public and all stakeholders that the revocation of licence of Falcon Insurance will have no adverse impact on the industry as a whole.

He added that as the regulator of the insurance industry, the FSA’s mandate is to ensure the fair treatment of policyholders and the maintenance of a fair, stable and efficient insurance market for the benefit and protection of the public.

“One of the core objectives of the FSA remains to protect and enhance the reputation of Seychelles as a financial services jurisdiction. From a reputational risk perspective, this includes taking decisive action where necessary to rectify regulatory issues and to protect the image of the sector both locally and internationally,” said Mr Samson who noted that the company has 90 days to appeal against the decision, and further seek a court hearing on the matter.

Falcon Insurance Limited based at Eden Plaza, Eden Island, was officially launched in July 2015. To start with, the company offered only motor insurance, before venturing into new products based on the needs of clients such as property, health, liability, marine and yachts and professional indemnity insurances, among others.

Following the suspension of its licence in October 2022, Falcon Insurance Limited was only allowed, under its respects and obligations, to serve its existing clients including to continue to abide by the provisions of the Insurance Act. It was therefore not allowed to take on any new business during the period of suspension of its licence.

“Given that it was not allowed to take on new clients and as a result of insurance policy time frame, all of its policies have expired by now and its policy holders are probably engaged with another insurance body,” Mr Samson said.

Mr Samson said that while some principal officers involved with Falcon Insurance Limited can seek to operate under a new name and apply for a new licence, the FSA has procedures in place to ensure they are fit and proper to open a new insurance company and take part in the country’s financial sector.   

It is to be noted that during the time of suspended license, most of Falcon Insurance’s staff sought other jobs, leaving only three to man the company to date.

Following the suspension of the licence of Falcon Insurance Limited on October 27, 2022, the FSA appointed Mariam Rajabally as administrator to manage the company’s business, affairs and assets.

When Ms Rajabally resigned as administrator with effect from March 15, 2023, the FSA appointed Yogesh Rai Basgeet FCA and George Weru, CPA, CFA, CFE as joint administrators in her place, pursuant to section 101 of the Insurance Act.