adminTawanda Musarurwa
About 12 out of the 25 insurance companies operating in the country are in compliance with the new capital requirements under the new amendments to the Insurance Act (Chapter 24:07), and related legislation.
The new insurance capital requirements took effect in July.
The revelation was made by Nicoz- Diamond managing director Grace Muradzikwa: “The new Insurance Bill has been on the table for a while, but at least the new capital guidelines kicked in July and what we have seen is that about 12 only out of 25 active companies have complied…
“What we are seeing in the new Insurance Bill is that there an emphasis on corporate governance, there is a lot more emphasis on monitoring and compliance and the end result can only be a stronger insurance market,” she said last week.
The Government is in the process of amending the Insurance Act, while simultaneously synchronising it with the Pension & Provident Funds (Chapter 24:09) and the Insurance & Pensions Commission Act (Chapter 24:21) to improve governance of the insurance and pension sectors.
Finance Minister Patrick Chinamasa last month said enhancing the regulatory framework of the insurance and pension sectors has wider positive outcomes for the broader financial system.
“The adequacy of the regulatory framework is a requisite for maintaining fair, safe and stable insurance and pension sectors for the benefit and protection of the interests of policyholders, as well as contributing to the stability of the financial system,” he said.
Muradzikwa said the amendments will also streamline the players on the local market as presently “five companies were currently controlling 70 percent of the insurance business” in Zimbabwe.
She also said it will help to harmonise the insurance regulatory framework in the SADC region.
“It’s a development that we will see moving towards the harmonisation of regulatory frameworks in the SADC region….we know that there is a study which is currently underway to harmonise the regulatory framework and that will touch on issues such as minimum capital levels and on issues such as who should be running an insurance company and who should be an underwriter, because the issue of skills and fit have not been getting prominence in the industry.”
Amendments to the insurance legislation will address issues including corporate governance, legal and regulatory framework and prudential standards, empowering the regulator to effectively supervise the sector, addressing anti-money laundering and countering the financing of terrorism issues among others. — BH24
Online Reporter