To the Editor:
Barclays Bank in London has been probed for LIBOR fixing. Its chairman Marcus Agius and CEO Bob Diamond have resigned.
“It is nonsense to suggest that the Bank of England was aware of any impropriety in the setting of Libor,” a BoE spokesman said. “If we had been aware of attempts to manipulate Libor we would have treated them very seriously.”
But in Zambia, Bank of Zambia has been aware of the scam going on for years. Barclays Bank has externalised K120 billion over the last 10 years with full knowledge of officials at BOZ and the Pensions and Insurance Authority (PIA).
We the indigenous insurance brokers were paid 10% commission to solicit and place insurance business with insurance companies. But Africa Life Assurance Company has paid 70% of the credit life premium as commission to Barclays Bank.
We have written to BOZ and the PIA but to no avail. Money makes the mare go.
If the business was placed through an indigenous broker, premium charged to the borrowers of Barclays Bank would have been 1/3rd of what they have been charged. 2/3rd of the premium charged is paid to Barclays Bank and all this money belongs to the borrowers, who were never told that they are paying premiums at much higher price and that majority of the premium is retained by Barclays Bank.
Alexander Forbes of Zambia, the insurance broker from South Africa and Africa Life Assurance Company, again from South Africa have been involved in this scandal.
Even today the practice is continuing. As BOZ and the PIA has not done anything to stop the rot, Africa Life and Alexander Forbes have gone full throttle to become conduit of taking money by false pretense and overcharging the borrowers. Even Members of Parliament are being overcharged.
While we are paid a commission of 10% on Group Life and Group Credit insurance business, with Africa Life is even today paying 25% commission to Barclays Bank, Standard Chartered Bank and Indo Zambia Bank.
Since this rot is not stopped by the Pensions and Insurance Authority, this has spread to Aon Insurance Brokers, another international Broker. Again another South African insurance company is becoming conduit to take money by false pretense. This time it is FNB Bank that is being used to overcharge the borrowers and share the loot with the bank. All those borrowing from FNB are forced to buy insurance from Hollard Insurance and Hollard Life Insurance Companies. The broker (AON) facilitates the transaction and gets 25% Commission while we the indigenous brokers get 10% commission from the same insurance companies for similar business. Stanbic Bank has also joined the bandwagon.
We are appealing our government and members of parliament to look into our plight and day-time robbery by these international banks, insurance companies and insurance brokers.
In India where Indo Zambia Bank comes from, no international broker was allowed to operate.
They have liberalised the ownership structure but it is not the way it is in Zambia where 100% shareholding is by foreigners who are teaming up with foreign banks and foreign insurance companies to skim Zambians by taking away the little they have.
Even our local insurance companies are scared of these foreign owned insurance brokers to the extent that they are signing agreements with them to allow these brokers edge over indigenous brokers. They are paid higher commission, they can retain premium of insurance companies for up to 120 days while we are forced to pay within 30 days, they are remunerated twice by allowing them to engage their sister companies in South Africa, UK and Australia to charge and keep major part of premiums in those countries without paying any tax in Zambia. Jobs are created in those countries while inflated insurance premium is paid by Zambian businessmen.
We demand our Members of Parliament to enact a law that all insurance companies and insurance brokers in Zambia shall be 75% Zambian owned. This is the only way we can stop this rot. Do we lack talent? No, it is definitely not the case. Even today, Malwai, DRC, Namibia, Seychelles, Botswana and many other countries send their insurance professionals to Zambia Insurance Business College to learn insurance. Our professionals occupy high positions in insurance industries overseas but in our own land, we are treated second class citizens.
Author’s name withheld