However, there is no immediate risk to Rentmeester investors in one of South Africas best-regulated sectors.

Last week Rentmeester said it was selling R91-million worth of properties in its portfolio to Daisy Street, a vehicle that will be acquired by listed property loan stock company Fairvest Property Holdings. Rentmeester said it would receive R30.3-million in cash and the balance in Fairvest convertible debentures.

At the time, it said the sell-off was to reduce its exposure to properties; enhance its asset distribution; realise a significant portion of its portfolio in cash to increase future returns on its asset spread; and to redistribute its investment risk profile over a larger property portfolio.

But financial sector insiders say the group was forced into the property deal to avoid capital problems down the road.

Rentsure chairman and chief executive Joachim Vermooten could not be reached for comment and Financial Services Board deputy executive officer Andr Swanepoel was also unavailable.

Rentsure is the second small life assurer to come under the capital adequacy spotlight in recent months. Sages difficulties in funding its US and Bermuda operations hit centre stage in August. But last week Sage said its international capital-raising process was proceeding according to plan.

In June, Rentsure released a profit warning preparing shareholders for a considerable attributable loss as a result of sluggish new business volumes generally and of the restructuring of Rentmeester ahead of an attempted merger with Assupol .

Rentmeester was badly thrown by the termination in May of the long-awaited merger with Assupol when empowerment partner Nozala walked away.

In the half-year to December the company reported a headline loss of 23.98c a share.

Sunday Times