Zim funeral companies defy govt
PHILLIMON MHLANGA
Zimbabwe’s funeral companies have defied the government by investing an insignificant 0.11% of their total asset portfolio in prescribed assets ratio against a minimum threshold of 10% in the first quarter of this year, Business Times can report.
Official data from the sector regulator, the Insurance and Pension Commission (IPEC) show that all funeral companies invested a paltry ZWL$4.99m in prescribed assets against the minimum threshold of ZWL$445.05m.
Total assets for the funeral assurance sector increased by 55% to ZWL$4.45bn in the period under review from ZW$2.87bn at 31 December 2021.
The asset base for the sector remains highly concentrated in immovable property consisting of 84.69% of the total assets. This concentration in immovable property mainly arises from the need by the sector to invest in assets that are used for funeral service provision.
Prescribed assets are bonds or securities issued by government, local authorities, quasi-government organisations or other bonds that may be accorded the PAs status.
The development has troubled IPEC.
“All funeral assurers were not compliant with the minimum prescribed asset ratio of 10%, as stipulated by Statutory Instrument 206 of 2019 as of March 31, 2022.
“Prescribed asset investments were very small as they accounted for an average of only 0.11% of the total asset portfolio. The total amount invested in prescribed assets was ZW$4.99m against an expected minimum amount of ZW$445.05m, for the sector to comply with the 10% minimum prescribed asset threshold.
“The Commission continues to recommend the development of sector-specific projects that speak to industry needs for the possible conferment of prescribed asset status as a way of enhancing compliance,” IPEC said in its latest report published yesterday.
The insurance companies have also shunned reassurance.
All funeral assurers had no reassurance arrangements in place for the period under review.
IPEC, however, indicated there were discussions underway.
“The Commission is aware of various engagements which the sector is having with the reassurers to ensure that there are suitable reassurance arrangements in place.
“The sector is however encouraged to expedite the process to ensure that players are effectively reassured, so that they will manage to pay high claims in the event of catastrophes,” IPEC said.
Gross premium written for the sector grew 262% to ZWL$701m in the period under review from ZWL$194m reported at the end of December 2021.
