‘Insurance and pension compensation catastrophic’

Source: ‘Insurance and pension compensation catastrophic’ – DailyNews Live

BUSINESS WRITER      22 January 2019

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.