IPEC expedites compensation deal
LIVINGSTONE MARUFU
The Insurance and Pensions Commission (IPEC) says it is expediting the process to compensate pensioners and policyholders who lost their savings when Zimbabwe ditched its own currency in 2009, largely due to inflationary pressures.
IPEC Commissioner general, Grace Muradzikwa, said the insurance sector regulator has since drafted regulations to complete the compensation processes.
The regulations, Muradzikwa said, would be gazetted soon.
“Implementation of the 2009 compensation process is progressing according to plan.
“From IPEC’s engagements with the government and the insurance and pensions industry, there is a commitment to bring closure on this matter,” Muradzikwa said.
She said the comments received from industry players have since been reviewed with some of the inputs having been considered in the draft regulations.
“The intention is to ensure that we walk together with all the key stakeholders involved in this exercise to avoid further delays at the implementation stage,” Muradzikwa said.
She said the amount of prejudice would be determined after the implementation of the compensation regulation and this will differ per each pension fund and the insurance company.
“Each insurance company and pension fund will be required to submit compensation plans, showing compensation amounts and the eligible policyholders and pension fund members.
Cabinet recently approved the draft compensation framework.
It is estimated that many Zimbabweans lost their investments totalling more than US$3bn during the conversion process, resulting in huge pension investments turned into a few cents or dollars.
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”.
The failure to compensate pensioners for the losses that occurred pre-2009 will continue to dent confidence in the sector.
The legislation governing insurance and pensions was reviewed to incorporate the recommendations of the Commission of Inquiry set up in 2015 by former president, Robert Mugabe to probe the conversion process used in converting benefits following the dollarisation of the economy in 2009.
Retired judge Justice George Smith chaired the Commission.
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.
Muradzikwa said each fund is required to submit a compensation scheme within 90 days from the date the regulations become operational.
The scheme will include actuarial reports – cohorts of members to be compensated, compensation amounts, assumptions and amounts from sources of funding.
