The Insurance and Pensions Commission (IPEC) has directed insurance companies and pension funds to keep policyholder data for about 15years after the benefits are paid out among a raft of measures amid a surge in unclaimed funds.
The directive comes as players in the industry have failed to manage policyholders’ data which has seen thousands of policyholders and pensioners failing to access what is due to them.
“The Insurance and Pensions Commission has implemented and continues to implement measures that improve data integrity in the insurance and pensions industry. Some of the measures are enhanced supervision of Management Information Systems of insurers, pension funds, and administrators, including the conduct of dedicated inspections targeting data integrity in the industry,” IPEC commissioner Grace Muradzikwa told Business Times.
She said the insurance and pensions regulator has also issued revised financial reporting guidelines for pension funds and other disclosure requirements aimed at enhancing the availability of information to various stakeholders.
“The Commission also issued a guideline on record keeping standards, which prescribes data retention period. For example, membership/policyholder data will be retained for the greater of 15 years after the full benefits are paid out, 100 years from the member/policyholder’s date of birth, 100 years from the date of birth of any beneficiary who received benefits, and 15years after the member/policyholder’s death,” Muradzikwa said.
“The same Guideline also makes it mandatory for pension funds to have their data audited every year. Following the gazetting of the new Pension and Provident Funds Act [Chapter 24:32] in September 2022, the Commission has drafted new regulations, which have enhanced provisions on data preservation and maintenance.
IPEC is also conducting business process engineering to maintain records of information that is filed by the industry to the regulator, which will also go a long way in improving data integrity.”
She said the guidelines will ensure the integrity, availability, confidentiality of all policyholder data in a more robust manner.
An insurance expert, Wellington Sibanda, told Business Times that poor data integrity impact both the insurance companies and policyholders.
“Without accurate record- keeping, there could be a variety of consequences ranging from a pension fund failing to meet its legal requirement to harming their ability to check if sponsoring employers are paying the correct contributions for their employees,” Sibanda said.
He added: “Poor data integrity could also result in policyholders not receiving the pensions they are entitled to.”
Another insurance and pensions expert, Tatenda Simango, weighed in saying: “Pension funds’ primary purpose is to pay the right members the right benefits at the right time, meaning policyholder data is key to achieving this as administrators rely heavily on data to run schemes efficiently. Therefore, they need accurate and consistently stored data.”