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Business Reporter
THE Government has directed the Insurance and Pension Commission (IPEC) to impose stiffer penalties, starting January next year, on insurance players who continue to flout regulations.
This follows concerns over poor corporate governance practices and high levels of non-compliance in the insurance sector.
Presenting the 2017 national budget policy statement last week, Finance and Economic Development Minister Patrick Chinamasa said the insurance and pensions industry continues to operate under poor corporate governance structures, which promote conflict of interest and related party transactions.
“The 2016 national budget statement highlighted low levels of compliance to prescribed asset requirements by the insurance and pensions industry, which has since improved.
“However, funeral assurers remain defiant despite repeated calls and, hence, IPEC will be enforcing compliance measures, including penalties from 2017,” said Minister Chinamasa.
He expressed concern on the growing informalisation of some insurance activities saying this had necessitated the development of new insurance products targeting to cover areas such as health, funeral, travel and agricultural cover.
“In order to ensure transparency, accountability and protection of consumers from predatory practices, Government is introducing the appropriate legislative framework for micro insurance as part of this budget,” said Minister Chinamasa.
On the conversion of insurance and pensions values, the Finance Minister said: “The Commission of Inquiry into the Conversion of Insurance and Pension Values from Zimbabwe dollars to United States dollars was expected to finish its work by end of August 2016.
“However, due to challenges initially faced with respect to data availability, the tenure of the commission has been extended to end of December 2016.”
Last year President Mugabe swore in an eight member commission to probe the conversion process for insurance contributions and pension benefits when the country adopted a multicurrency system in February 2009.
This followed concerns raised by policyholders and pensioners who felt they were short-changed on their investments in the changeover period on the pretext that their contributions had been eroded by inflation.
If it is established that pension fund members or insurance policyholders were materially prejudiced, the commission will set up an appropriate mechanism for compensation.
@okazunga
Online Reporter