Non-compliant insurance companies face penalty

Business Reporter

THE Commissioner of Insurance and Pensions has started penalising pension funds and insurance companies that failed to comply with prescribed asset ratio requirements as at December 31, 2015. In July 2014, the Ministry of Finance and Economic Development directed pension funds to comply with a prescribed asset ratio of 10 percent of the total fund portfolios, short-term insurers at 5 percent and life companies at 7,5 percent.IPEC chairperson Mrs Lynn Mukonoweshuro confirmed non-compliant companies were being penalised.

She said IPEC had advised companies that had challenges in attaining the required threshold to engage the regulator and explain their positions.

“It is only in situations where thresholds have not been met and no adequate explanations (for failing to comply) have not been provided,” said Mrs Mukonoweshuro.

IPEC commissioner Mrs Mannet Mpofu said companies were being penalised in terms of the law.

During the past two years, several papers, which had prescribed assets status, were issued. These included the Agricultural Marketing Authority (AMA Bills) to finance the 2014 /2015 agricultural season. It was issued in two trenches, the first trench of $55 million and second trench of $50 million.

ZB Bank issued $10 million agro bills to finance the 2014 /2015 season. Fidelity Life raised $12 million to finance servicing of the South View high density stands.

Agribank and FBC Bank issued AgroBills to raise $15 million to finance agriculture.

Old Mutual raised $62,8 million to finance Budiriro housing project, BNC raised $20 million to resuscitate the nickel smelter and beneficiation while the Zimbabwe Electricity Transmission and Distribution Company raised $15 million to support the energy sector.

The papers which are currently available on the market are the ZPC $50 million energy bond, Agribank/FBC Bank $10 million agro bills, $50 million AMA Bills to raise funds for grain procurement by the Grain Marketing Board, the $5 million ZB Bank agro bills to support the 2015 /2016 agricultural season and $15 million housing bond for the development of stands and construction of housing units by Homelink.

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