Chronicle Editor
Judith Phiri, Sunday News Reporter
The Insurance and Pensions Commission (IPEC) has called on funeral assurers to revisit their business model to align with the recently prescribed funeral model directive to ensure compliance.
In April, under the insurance and pensions sector regulator’s new directive on funeral assurance products, which came into effect on July 1, IPEC set US$6 000 as the maximum sum assured pay-out for all funeral policies.
This was meant to bring an end to all forms of perpetual premium payments by funeral policies holders and most premium funeral policy pay-outs would not exceed the US$6 000 ceiling or the equivalent in Zimbabwe dollars.
The directive came about following complaints by policy holders over the design of local funeral policy products and practices of funeral assurers in the country.
In its Funeral Assurance Report for the half year ended 30 June 2023, the Commission said sector players should re-conceptualise their business model to align with the new directive.
“Funeral assurance sector players should be compliant with all applicable laws and regulations, particularly the minimum capital requirements and prescribed asset ratios at all times.
“The sector is urged to revisit its business model to align with the recently published funeral model directive to ensure compliance and ward off increased competition from the life assurance sector.
“The Commission also urges the sector players to always offer relevant products that address the needs of the insuring public by being customer-centric. Funeral assurers should also have in place reassurance arrangements as a risk management tool to manage loss experiences.”
Bongani Ndlovu