By Alois Vinga
FINANCE Minister, Mthuli Ncube has given regulators the permission to revalue insurance policies in line with currency conversion developments.
Statutory Instrument 69 of 2020 published Friday says such guidelines will be made in the interest of insurance policy holders.
“Whenever the Commission considers it necessary, convenient and in the best interest of policy owners, and pension and provident fund members, the Commission may issue general guidelines and standards which may provide revaluation of assets and liabilities by the insurance and pensions industry after a currency conversion,” the instrument said.
Regulators are allowed to assess risk management, corporate governance and market conduct practices.
Insurance firms directed to follow guidelines are expected to record compliance in their annual audited accounts in terms of the Insurance laws of the country.
Regulators are required to consider the protection of rights on behalf of policy owners, pension fund members and their beneficiaries.
Observance of State interests, credibility of persons involved in the insurance business and socio-financial policies must be considered.
“The monitoring of the solvency of insurers, pension and provident funds; and the maintenance of sound financial principles coupled with the strengthening of the insurance industry is important,” said the legal instrument.
The instrument says failure to adhere to the set guidelines attracts penalties which depend on the period which an insurance firm defaulted.
This comes at a time when Zimbabweans have suffered losses due to currency conversions.
The Commission of Enquiry into Pensions and Insurance incepted by former late President Robert Mugabe established that several insurance companies fleeced policy holders of money running into millions of dollars when the economy dollarised in 2009.
Zimbabweans also lost value in 2019 when the economy de-dollarised prompting policy holders to call for a second enquiry.