'Insurance and pension compensation catastrophic'

HARARE - The Insurance and Pensions Commission (Ipec) says implementing recommendations of the Commission of Inquiry on the conversion of insurance and pension values from the now-defunct Zimbabwean dollar to United States dollars without reforms would be catastrophic to the local industry.

Ipec’s acting commissioner Blessmore Kazengura said while many insurance and pension stakeholders — particularly prejudiced policyholders and pensioners — regard the compensation for loss of values as the sum total of the recommendations of the Justice Smith-led commission, the findings and recommendations are broader than the issue of compensation.

“Implementation of the recommended compensation framework without the fundamental reforms may result in unintended consequences of destroying the insurance and pensions industry,” he said in a presentation to a parliamentary committee on Budget Finance and Economic Development.

The paper lists six post inquiry reforms that include policy and institutional, legal, regulatory and supervisory. Others include governance reforms at regulated institutions level, measures to regain lost consumer confidence and compensation.

“Relevant insurance and pension stakeholders would have to plug in the above clusters to support Ipec’s efforts in implementing recommendations under the respective clusters,” he said.

Kazengura said following gazetting of the report in March 2018, Ipec went through the findings and recommendations to come up with a clear implementation roadmap for the recommended reforms.

“While Ipec was given the mandate to spearhead the reforms, the need for further stakeholder dialogue is recommended to facilitate ease of implementation of recommendations of a policy nature and issues that were not fully addressed the commission of inquiry,” he said.

The inquiry was conducted from September 1, 2015 to February 28, 2017 and the report was finalised and submitted to government in May 2017.

Findings of the Commission of Inquiry confirmed loss of value by policy holders and pensioners and recommended a compensation framework by the private sector.

In addition, to that, the commission also find out that policyholders and pensioners did not lose value during the conversion period alone, but has been losing value throughout the investigation period due to other reasons that include poor regulation of the industry as well as lack of clear government policies.


 

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