Compensation deal edges closer
BUSINESS REPORTER
Finance and Economic Development Minister, Mthuli Ncube, has said the process to compensate pensioners and policyholders who lost their savings when Zimbabwe dollarised in 2009 is almost complete, a move which restores confidence in the industry.
It is estimated that Zimbabweans lost investments totalling more than US$3bn during the conversion process.
Ncube said the compensation is done as recommended by the Justice George Smith-led Commission of Inquiry into the conversion of insurance and pensions values from the Zimbabwe dollar to the United States dollar.
He said the insurance and pensions industry was grappling with low confidence due to the low values policyholders and pensioners got after adoption of the multicurrency system in 2009.
“…I am glad that finalisation of the compensation exercise as recommended by the Commission of Inquiry into the Conversion of Insurance and Pensions Values from the Zimbabwe dollar to the United States dollar, is almost done. It is Government’s expectation that IPEC and the industry will expedite the compensation exercise, as soon as the regulations are gazetted,” Ncube said.
He said compensation for the 2009 losses would go a long way in restoring confidence in insurance and pensions.
“We, therefore, need to work together and implement this exercise for the future sustainability of the insurance and pensions industry,” Ncube said.
In 2015, former President the late Robert Mugabe set up a Commission of Inquiry to probe the conversion process used in converting benefits following the dollarisation of the economy in 2009.
Justice Smith led the Commission.
The government has committed US$175m towards compensation for the pre-2009 loss of value.
The insurance industry is expected to avail funding to account for the money “entrusted to the sector by pension fund members and policyholders”.
Three bills—the Insurance Bill, Pension and Provident Bill, and IPEC Bill— are at various stages of enactment into law.
The Commission of Inquiry recommended institutional reforms such as the establishment of a Policyholder Protection Fund, and the strengthening of IPEC’s regulatory capacity, among other institutional reforms aimed at the public sector.
