The Society is a registered industrial and provident society. As a consequence of its legal structure, the Society has no recourse to external capital. The Society’s capital of $8.6 million (2016: $7.1 million) is equal to the reserves as disclosed in the interim financial statements.
From 31 December 2012, as a provisional license holder, the Society was subject to new solvency margin requirements. From 21 February 2013, as a consequence of being a fully licensed insurer, the Solvency Standard for Non-life Insurance Business issued by the Reserve Bank requires the Society to retain a solvency margin of greater than zero, meaning that the actual solvency capital position exceeds the minimum required under the solvency standard.
The Directors’ policy for managing capital is to have a strong capital base to establish security for members and enable the Society to conduct its business whilst maintaining financial soundness. The Society has embedded in its capital management framework the necessary tests to ensure continuous and full compliance with the solvency standard. The policy in respect of capital management is regularly reviewed by the Directors in line with the guidelines issued by the Reserve Bank.
The Capital Management policy was reaffirmed and submitted to the Reserve Bank 19 June 2015.