IPEC is right on funeral assurers

IPEC is right on funeral assurer

Yesterday, the Insurance and Pensions Commission (IPEC) Commissioner, Grace Muradzikwa, delivered a message that the funeral assurance industry can no longer ignore.

By describing the sector as the weakest segment of Zimbabwe’s insurance market and warning of tougher sanctions, the regulator has taken a position that deserves support.

For too long, weaknesses within the funeral assurance industry have been tolerated despite the sector’s importance to ordinary Zimbabweans.

Funeral policies are often purchased by low-income families seeking dignity for their loved ones in times of bereavement. These are not luxury products, they are social safety nets.

Any failure in governance, reporting or investment obligations directly affects vulnerable policyholders who have faithfully paid premiums over many years.

Muradzikwa’s concerns are serious. Weak statutory reporting, missed regulatory deadlines, poor compliance with prescribed asset requirements and governance deficiencies point to deeper structural problems within parts of the industry. Such shortcomings undermine confidence in the entire insurance sector and expose policyholders to unnecessary risks.

The regulator’s decision to intensify inspections and escalate sanctions where necessary should therefore not be viewed as punitive.

Rather, it is a necessary intervention aimed at restoring discipline and protecting consumers.

What makes the situation even more striking is that other insurance subsectors have demonstrated that compliance is achievable. Life assurers, pension funds, reinsurers and micro-insurers have all recorded compliance levels above IPEC’s benchmark. In fact, micro-insurers have emerged as the best-performing segment, proving that sound governance and regulatory adherence are possible even in relatively smaller institutions.

The funeral assurance industry must therefore resist the temptation to view IPEC’s actions as harassment. Regulation exists to safeguard public confidence and ensure that institutions entrusted with people’s money remain financially sound and accountable.

Once trust is lost, recovery becomes difficult and expensive.

Equally commendable is IPEC’s willingness to use newly acquired garnishee powers to recover pension contributions from defaulting employers.