Ultimatum for insurance industry
BUSINESS REPORTER
The Insurance and Pensions Commission (IPEC) has given players in the insurance and pensions industry until the end of December to submit compensation plans to compensate the money that policyholders and pensioners lost when Zimbabwe ditched its own currency in 2009, largely due to inflationary pressures,” Business Times can report.
These plans must include the list of eligible policyholders and pensioners and the compensation amount for each.
This was revealed by IPEC Commissioner, Grace Muradzikwa.
Additionally, she stated that beginning in March, policyholders who lost their savings will begin to receive compensation.
“Liable insurer or pension fund to submit compensation plan to IPEC, including the list of eligible policyholders or pension fund members and the compensation amounts by December 31,2023,” Muradzikwa said.
She added: “IPEC is to analyse the compensation plan and either approve or reject the proposed compensation plan (if it does not meet the expected standard) within 30 days after receiving the compensation plan, by 30 January 2024.
“After approval of the compensation plan, the insurer or pension fund will publish in the media the names of the members entitled to compensation.
If IPEC approves the compensation plan, the insurer or pension fund will be expected to start paying eligible policyholders or pension fund members by March 2, 2024.”
The development comes after the government last month gazetted compensation regulations.
It is estimated that Zimbabweans lost investments totalling more than US$3bn during the conversion process.
Business Times can report that 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.
The insurance and pensions industry has been grappling with low confidence due to the low values policyholders and pensioners got after adoption of the multicurrency system in 2009.
Multiple analysts said the compensation for the 2009 losses would go a long way in restoring confidence in insurance and pensions.
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.
