Harare, Zimbabwe - A Zimbabwean life assurance company announced Monday it was closing down its subsidiary in Zambia over disagreements with regulators.

Fidelity Life Assurance, listed on the Zimbabwe Stock Exchange, was one of the leading life assurance companies in Zambia, where it set up at the height of Zimbabwe's economic upheavals a few years ago to hedge itself.

But the company ran into trouble with Zambian regulators after it seconded key personnel from Zimbabwe, following a massive fraud which it said senior officials at the subsidiary, including the chief executive officer, were allegedly involved in.

The top managers at the subsidiary were locals, and were suspected of fleecing the company of more than US$100,000.

In response to the secondment, which was meant to facilitate investigation of the fraud, Zambian regulators revoked the subsidiary's operating licence, but later reinstated it.

Simon Chapereka, managing director of the Zimbabwean parent company, said Fidelity Life Assurance had turned down the reinstated licence unless staff from Harare was seconded to the subsidiary.

'We are pulling out of the market; we're not going to resuscitate the operation. The regulator had renewed our licence, but the board at its meeting took the position, 'no thank you', he said.

Apart from offering life assurance services, the Zambian subsidiary was also involved in asset management.

'It was (closure) a good decision because the operating environment was not favourable. We said if we can't second our management to that operation, it's not worth our while. Remember the business is all about managing people's funds. We had to second management from here because the fraud involved senior guys,' Chapereka said.

Fidelity Life Assurance is one of several Zimbabwean companies which invested across borders in the last decade to escape economic turmoil at home.

It has several operations in southern Africa, and is planning to extend its operations to East Africa.