Missing File Raises Suspicions of Insurance Fraud

June 26 - A registration file containing vital information, including the information regarding the company's registered owners, its core activities and its share capital went missing, causing speculation as to whether it had, in fact, ever existed.

Alliance Insurance Corporation Limited explained that they had merely fronted services for a South African company, but had not been involved in any negotiations or in the execution of the contract. The fronting service was extended as a formality to the Specialised Risks Underwriters (SRU), located in South Africa. The SRU was the risk undertaker, and had insured the Bank of Tanzania's (BoT) 'Twin Towers' project in Dar es Salaam, valued at $340 million.

According to an Alliance official, the reason the SRU insured the BoT was because the project was "a special risk with a huge liability beyond the ability of the local insurance market to undertake." Tanzanian law allows foreign companies to be the risk undertakers in such cases, however, local insurance companies, such as Alliance, need to be involved in the insurance, although, in this case, they took none of the risk themselves.

At the time, Alliance showed documents to show that they were a legitimate, legally registered company, however, since the registration file cannot be located at the Business Registration and Licensing Agency (Brela) offices, speculation has arisen as to whether they had ever existed.

Last March's 2007/2008 Audit Report in Parliament named Alliance one of a number of companies that had been involved in what might have been insurance scams. A report has been tabled, in Parliament, and a request has been made for the Prevention and Combating of Corruption Bureau to investigate insurance contracts connected to the BoT and a number of other foreign firms.