admin
Zvamaida Murwira-Senior Reporter
A FUND to compensate insurance policyholders and pensioners should they suffer losses from the collapse or insolvency of insurance companies is set to be established.
The fund is part of efforts by the Government to instill confidence in the insurance and pension industry.
This is contained in the Insurance and Commissions Amendment Bill, which is part of the three Bills now before Parliament that seeks to reform the sector.
Two other Bills are the Insurance Bill, and Pension Provident Funds Amendment Bill.
Clause 11 of the Bill establishes the Fund that will protect policyholders in the event that the insurance company goes under. The fund will be administered by a Board of the Insurance and Commission, which is body cooperate capable of suing or to be sued.
“The fund shall consist of — all contributions from insurers registered in terms of the Insurance Act, contributions from pension, provident or retirement annuity funds registered in terms of the Pensions and Provident Funds Act, income from the investments of the Fund, penalties payable for contravention of this Part, and any moneys received by the Fund under any insurance effected on behalf of the Fund,” reads the Bill.
It will also draw money that might have been appropriated by Parliament and unclaimed benefits from insurers and pension, provident or retirement annuity funds that have exceeded five years, or retirement annuity fund or winding up of an insurer, donations or grants with the approval of the Minister of Finance and Economic Development.
“The object of the fund shall be to compensate policyholders and pension, provident or retirement annuity fund members in accordance with this Act for losses directly incurred by them in the event of a contributor becoming insolvent,” the Bill reads.
The Bill has new section outlining objectives of the Commission which include to establish a fair, safe and stable insurance and pensions sector, to be operationally independent, accountable and transparent, and to meet high professional standards by the pension industry. It will also make some changes to the Commission’s Board and the way it carries out its functions.
Clause 5 of the Bill will increase the maximum number of board members from five to seven, and provide for members to be chosen for their experience in actuarial practice, law, finance, human resources management, information technology and related fields.
Clause 6 of the Bill will disqualify persons from membership of the Board if they are employed or connected with an insurance company or other entity regulated by the Commission.
Clause 4 of the Bill proposes to expand the functions of the Commission to include the accrediting of actuaries, auditors, asset managers, credit rating agencies.
Online Reporter