Andrew
Tawanda Musarurwa
ZIMBABWE’S insurance and pensions sector regulator has cautioned some players that are advising the industry to disregard the policy requirements on the splitting of assets.
Last May, the Insurance and Pensions Commission (IPEC) issued updated guidelines on the adjustment of insurance and pension values in response to the 2019 currency reforms.
One of the key changes to the regulations required that audited financial statements for pension funds and insurance companies to clearly and separately show the split of assets in sub-account 1 & 2.
This had been an implied provision in the original guideline.
However, some players in the sector – most likely actuaries – have been advising insurance firms and pension funds to ignore the statutory requirements.
In a recent circular to industry players, IPEC Commissioner, Dr Grace Muradzikwa, said the regulator may ban such service providers.
“It has come to our attention that there are some service providers within the industry, who are discouraging pension funds and insurers from notionally and physically splitting assets by sub accounts.
“This is in contravention of sections 9.3, 14.20 and 15.1 of the revised Guidance Paper issued on 31 May 2021, which clearly require pension funds and insurers to split their assets by sub accounts to prevent intergenerational transfer of wealth among members or policyholders,” said Dr Muradzikwa.
“We strongly warn such individuals to desist from misguiding the industry.”
The guidelines are aimed at ensuring that insurance policyholders and pension fund members are treated in a fair and equitable manner, taking into consideration asset re-pricing due to currency reforms.
In 2019, Zimbabwe went through significant currency reforms that saw valuations of assets and liabilities held by pension and insurance companies assume Zimbabwe dollar values away from United States dollars.
Online Reporter