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BH24 Reporter
The pensions industry is in the process of developing an asset valuation guidance amid concerns that some players within the sector could be transferring policyholder assets to shareholders.
This comes as the value of both sectors’ combined assets dwindled by around 90 percent from US$9,4 billion at the end of 2018 to US$1,4 billion as at the end of September 2019.
Said Insurance and Pensions Commission (IPEC) pensions director Joshpat Kakwere:
“With the (valuation) guidance, which we are working on, it will deal with the issue of trying to address the possible of transfer of value from the policyholder to the shareholder
IPEC Commissioner Dr Grace Muradzikwa said the regulator is working with agencies such as the Valuers Council of Zimbabwe and the Actuarial Society for Asset Valuations.
“The current practice is that you get three valuations, but there has never been an explanation as to why we are getting three valuations. If there was a standard you would expect to get the same valuation from the valuations, but it has never happened.
“We are saying, you are dealing with policyholder’s assets, and we are worried when see assets moving from US$9,4 billion to US$1,4 billion. So the guidance that we are coming up with is in consultation the Valuers Council of Zimbabwe, which is for property valuations, and then with the Actuarial Society for Asset Valuations. We are hoping that at least we will eliminate the inconsistencies.”
She added that they expect the guidance to inform the reporting as at December (2019).
Although the weakening of assets within the pensions and insurance sectors can be partly attributed to the currency policy adjustments that have taken place since the beginning of the year and the lack of a valuation guidance for the sectors, another key contributor may be poor corporate governance.
Bongani Ndlovu