ZIMNAT Life is risking a possible lawsuit in pursuit of the diaspora dollar over data protection breaches and gross misrepresentations to Diaspora Funeral Cash Plan (DFCP) clients of their role in the delivery of the bespoke cover. It is well known in the diaspora community that DFCP is also underwritten by Madison Life of Zambia and is available to diaspora Zambians worldwide. DFCP which is now re-insured by the world’s biggest re-insurer, Munich Re, is set for exponential growth and global expansion starting with key African diaspora markets.
DFCP is globally trademarked and was developed and is wholly owned by Diaspora Insurance, who are the Intellectual Property (IP) owners.
In 2011, Diaspora Insurance approached Zimnat Life to underwrite their now household name Diaspora Funeral Cash Plan for the Zimbabwean diaspora market. The role of Zimnat in the whole relationship was just to underwrite the product and issue policy documents.
Speaking to NewZimbabwe.com Business Thursday, Diaspora Insurance chief executive officer Jeff Madzingo said: “…an inference that Zimnat Life has interest in the DFCP brand beyond underwriting is outright mischief and scandalous. Their deceit is motivated by the greed and we instructed our lawyers to take on Zimnat Life over the issue of misrepresentation and breach of data protection contract..”
“For record Zimnat Life was in 2012 offered an opportunity to buy exclusive underwriting (for Zimbabweans worldwide) and/or shareholding when DFCP started and needed resources to capacitate for growth but Zimnat Life lacked vision to take up the offer….So for all these years Zimnat Life was enjoying free lunch literally..’ he added. ‘Zimnat life has not invested a single penny in the business nor have acquired a single client. They do not even know how all the DFCP clients were acquired,” said Madzingo.
Diaspora Insurance relationships with underwriters are governed by some Service Level Agreements and Data Protection Agreements which is why for years their underwriters do not directly interface with or contact their clients. Such arrangements are not uncommon especially in the first world.
After respecting the data protection rules for years Zimnat Life decided to breach the agreements and started bombarding DFCP clients directly when Diaspora Insurance started offering DFCP through more secure international insurer/reinsurer.
“In all this discourse, the client is principal and our motivation to switch underwriters was informed by the need to treat our customers fairly and making sure their hard-earned money buys them long-term protection with guaranteed benefits underwritten in the world’s leading financial capitals,” said Dr Sibert Mandega, executive director of Diaspora Insurance.
“Our philosophy is to guarantee our clients’ peace of mind by constantly reviewing the risks carried by our business partners and the economic environment they operate in and make strategic changes to our business in the best interest of our clients.”
The Diaspora Insurance executive director said the new Reserve Bank of Zimbabwe policy banning the multi-currency use, prevailing hyperinflationary environment and other inside info factors influenced their decision to disengage Zimnat Life as it would be impossible for their clients to derive expected benefits on a long-term insurance product like DFCP.
Documents in our possession show that on May 24 2018, United Kingdom based, Diaspora Insurance entered into an Information Processing Agreement with Zimnat under which the underwriters agreed not to contact DFCP policy holders directly.
Mandega added: “…but we were surprised to learn that they have been bombarding clients with emails and phone calls distressing them with all sorts of unfounded falsehoods.”
In another article published on 4 October 2019 by a State owned paper, Zimnat misrepresented the actual position on the matter after claiming that Diaspora Insurance had been an appointed agent of Zimnat Life Assurance for the DFCP. It was not clear how Destiny Finance Ltd could have been appointed an agent on their own brand and IP. It further claimed that it had been granted permission to ring fence the facility.
“The Government has been unequivocally supportive of diaspora-related products. Circular 13 of 2019 from IPEC dealing with the authority to offer selected insurance policies in foreign currency, coming after the gazetting of Statutory Instrument 142 of 2019, gives provisions to this effect,” Zimant was quoted as saying.
When this reporter reviewed Circular 13 they could not find an collaborative information to effect that Zimnat was given permission to ring-fence on any policies. In reality, Section 3 specifies that only the following insurances could be issued in foreign currency; international travel insurance, motor in transit, customs bond, bank cash and safari operations insurance. Circular 13 clearly stipulates RBZ rules when it comes to flow of premiums and claims which should go through normal banking system.
Contacted for comment and challenged to produce tangible evidence proving ownership status of DFCP and also to confirm who their claimed international re-insurer was, Zimnat group PR and Marketing Executive, Angela Mpala declined to comment beyond the statement published.