IPEC engages AG,MoFED
As compensation deal edges closer
BUSINESS REPORTER
The insurance industry regulator, the Insurance and Pensions Commission (IPEC) has engaged the Attorney General (AG)’s office and the Ministry of Finance and Economic Development to complete the crafting of the regulations, it has been learnt.
The move will pave the way for the compensation of policyholders and pensioners who lost their savings when the economy dollarised in 2009.
IPEC’s actuarial director, Robson Mtangadura, confirmed the development this week saying the regulations will be gazetted soon.
“(The) outstanding issue of compensation is at advanced stage now. We had active engagements with the attorney General’s office and the Ministry of Finance and Economic Development to finalise the regulations so that they can be gazetted. Draft regulations were shared with the industry to make necessary preparations including compensation schemes,” Mtangadura said.
In August 2015, then President Robert Mugabe set up the Justice George Smith-led Commission of Inquiry to establish the extent of prejudice to policyholders and pensioners and recommend compensation where prejudice has been established.
Many Zimbabweans, according to the Smith Commission report, lost more than US$3bn during the process of conversion of balances from Zimbabwe dollar to the greenback.
This resulted in huge pension investments suddenly turning into a few dollars.
According to the Minister of Finance and Economic Development Minister, Mthuli Ncube, who spoke to Business Times recently, the compensation will be 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.
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.
