LNIG Hollard has terminated its broker agreement with Insurecare Insurance Brokers following what it described as “unresolved administrative issues,” particularly concerning premium remittance.
The insurer said the decision, which took effect yesterday October 8, 2025, was reached after several months of unsuccessful efforts to resolve the matter with Insurecare.
“This decision was not taken lightly,” LNIG Hollard said in a notice to brokers this week.
“Over the past several months, we have engaged with Insurecare in good faith, offering multiple opportunities to resolve this issue. However, no meaningful action was taken to honour the commitment, and unfortunately the relationship reached a point where it could no longer be sustained in a manner that aligns with our values and operating standards.”
The company said the termination follows a prolonged period of “unresolved administrative issues” despite repeated attempts to reach an amicable resolution.
LNIG Hollard Insure emphasised that the decision was taken “in the spirit of discipline, accountability, and trust,” and did not reflect its general approach to broker relationships.
“We are sharing this update with you proactively so that you hear it from us first, not through speculation or third parties and to ensure it is not misinterpreted. This decision does not reflect our general approach to broker relationships but rather a necessary step to uphold discipline, accountability, and trust in our ecosystem
The insurer assured its partners that it remains “fully” committed to working closely with other credit brokers and to “delivering quality service to clients and driving sustainable growth” in the insurance industry.
“We value the role you play in delivering quality service to clients and driving sustainable growth in our industry,” it said.
Insurecare has not yet issued an official response. When contacted yesterday, the company requested that this publication contact it again today. LNIG Hollard requested written questions via email but had not responded at the time of going to print.
LNIG Hollard, one of Lesotho’s largest and oldest insurers, trades as LNIG Hollard Insure and LNIG Hollard Life. Established in 1977, the company has provided both short-term and long-term insurance products for over four decades.
It says it was “the first insurer to protect Lesotho’s emerging economy when no one else was around,” positioning itself as “the biggest protector of Lesotho’s economy from all stages of life.”
Insurecare Insurance Brokers, on the other hand, describes itself as a 100 percent Basotho-owned firm with more than 25 years of experience in the insurance brokerage business. The company claims to have achieved “a phenomenal growth rate of over 100 percent per annum” in recent years.
Sources familiar with the dispute told this publication that Insurecare allegedly failed to remit about M2.3 million in insurance premiums collected from clients on behalf of LNIG Hollard.
They said as a broker, Insurecare was not authorised to collect premiums directly from policyholders, but reportedly did so and failed to transfer the funds to the insurer as required under the law.
Under Lesotho’s Insurance (Licensing of Insurance Intermediaries) Regulations, 2016, the law sets out clear rules on how insurance brokers and agents should handle client premiums to ensure accountability and protect policyholders.
The regulations state that an insurance intermediary is not permitted to collect, hold, or in any way deal with premiums unless there is a written agreement with an insurer authorising them to do so. Even when such authorisation exists, the intermediary cannot delegate this responsibility to another person.
When an intermediary does receive premiums, they are required to remit the full amount to the insurer, deducting only any agreed service fees. Importantly, the law emphasises that all premiums collected from policyholders must be held in a fiduciary capacity, meaning the broker holds the money in trust on behalf of clients and the insurer.
To safeguard these funds, the intermediary must either transfer the premiums to the insurer or deposit them into a separate trust account designated for policyholder funds within one business day of receiving them. They are also obliged to maintain proper financial records and remit the premiums to the insurer within 30 days, along with a detailed statement of the payments made.
The law further provides that once a policyholder pays a premium to an authorised intermediary, that payment is legally considered as having been made directly to the insurer. This protects clients from being penalised if the intermediary later fails to transfer the funds.
However, the regulations also make it clear that insurers who authorise intermediaries to collect premiums remain personally liable for those funds as if they had received them themselves. If an intermediary fails to pay over the premiums as required, the insurer must report the default to the Commissioner of Insurance within 30 days.
Failure by an intermediary to remit premiums in accordance with these requirements is a serious offence under section 118 of the Insurance Act, and could lead to regulatory or criminal action.
Summary
- They said as a broker, Insurecare was not authorised to collect premiums directly from policyholders, but reportedly did so and failed to transfer the funds to the insurer as required under the law.
- The regulations state that an insurance intermediary is not permitted to collect, hold, or in any way deal with premiums unless there is a written agreement with an insurer authorising them to do so.
- Importantly, the law emphasises that all premiums collected from policyholders must be held in a fiduciary capacity, meaning the broker holds the money in trust on behalf of clients and the insurer.
Authored by our expert team of writers and editors, with thorough research.
