Tinashe Makichi Business Reporter
Government plans to set up a commission of inquiry to establish the basis for compensating policyholders and pensioners who may have been prejudiced when the country adopted the multi-currency regime five years ago, a senior Government official said. In 2012 an independent actuary consultant, Actuaries and Consultants was appointed to do investigations on the concerns raised by pensioners and policy holders pertaining the conversion issue.
The investigations were done but the findings however could not be released to the public after the then board of the Insurance and Pensions Commission disputed some of the findings.
The move then persuaded Government and IPEC to set up a commission of inquiry to provide a solution to the matter.
Addressing journalists after meeting stakeholders in the Insurance and Pension Fund industry yesterday ,Finance and Economic Development Minister Patrick Chinamasa said Government engaged IPEC in setting up the Commission to solve the matter that has been hanging since 2012.
“The prevailing economic challenges bedevilling the country have not spared pensioners and insurance policy holders, most of whom feel short changed by insurance companies and pension fund managers.
“In the absence of a lasting solution to the challenges, pensioners and insurance policy holders remain disgruntled as to how the conversions of 2009
were done and how their investments were eroded by hyperinflation when pension fund managers and insurers seemed to have preserved their own values through the acquisition of immovable assets,” said Minister Chinamasa.
He said Government and the insurance and pension fund managers agreed to set up a commission of inquiry to establish how the conversion processes was done at the same time identifying possible solutions.
“It is my conviction that the findings of the commission are going to restore public confidence in the pensions and insurance industry which has been dented by the perceived lack of fairness in the conversion process.
“The investigation presents the industry with an opportunity to address legacy issues from the hyperinflation period” the Minister said.
The commission of inquiry will investigate the relationship between the insurance and pensions industry and the rest of the financial services sector as well as the economy as a whole before, during and after conversion.
He said the commission will benchmark the matter with international best practice in order to make recommendations on the role of the insurance and pensions industry in the economy.
Minister Chinamasa said the Commission will also establish the extent of prejudice to pension fund members and insurance policy holders at the same time identifying how Zimbabwe can restore the financial soundness of the insurance and pensions industry.
The Commission is going to investigate all instances of failure of regulation ,governance, legislation and oversight in the running of insurance and pension funds, regulation and monitoring of the pensions industry and make recommendations on how to deal with these issues.
Minister Chinamasa said when the country adopted the multicurrency regime each entity used its own method and this therefore became the source of the problems that the industry is now facing.
Following the conversion processes, there was a public outcry as most pensioners and insurance policy holders alleged that they had lost values for their insurance and pension policies, presumably because of hyperinflation after the years of contributing.
The FinScope survey of 2011 showed that most people are no longer confident of the insurance, pension and banking sectors.
Government however is making efforts to restore confidence in the insurance and pensions sector.