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Tawanda Musarurwa
Government is working towards expediting the promulgation of legislation governing the insurance and pensions sector, Finance and Economic Development Minister Mthuli Ncube, has said.

Speaking earlier this week, Minister Ncube said the three bills in this respect should appear before Parliament during the first half of this year.

Reformation of Zimbabwe’s legislation around the insurance and pensions sectors is part of broader reform initiatives that were suggested by the Justice Smith Commission of Inquiry into the conversion of insurance and pensions values from Zimbabwe dollar to United States (US) dollar. One of the key indications from the Justice Smith Commission of Inquiry report was that of regulatory causes of loss of value.

It was expressed that regulatory failure on the part of Government and the regulator for insurance and pensions was identified as having caused loss of value.

Government, at the time, was accused of failing to guide the industry during the hyperinflation and currency debasing and during conversion of insurance and pension values when the economy was dollarised.

While, the Insurance and Pensions Commission (IPEC) is said to have failed to conduct on-site supervision and investigate its licensees, allowing arbitrary insurance product terminations by insurance companies, poor investment management practices, poor record keeping and failing to deal with predatory administration expenses among other issues, short-changed members.

Reformation of current legislation around insurance and pensions, namely amendment of the Insurance Bill, the Pensions and Provident Funds Bill, and the Insurance and Pensions Commission Bill is expected to cover these earlier regulatory gaps, and especially strengthening of IPEC.

The Pensions and Provident Fund Bill, in particular, is expected to foster better corporate governance practices within the industry while adequately providing the legal basis for a troubled entities’ resolution framework as well as increasing the commission’s enforcement powers.

Said Finance Minister Ncube:

“The Ministry is seized with legal reforms targeted at the legislation governing insurance and pensions. I understand the Bills took long at drafting stage.

“However, I wish to give you assurance that all the three Bills will be introduced in Parliament during the first half of this year,” said the Finance Minister.

“The macroeconomic reforms that we are implementing, particularly currency stabilisation, ease of doing business reforms and re-engagement efforts are meant to ensure stability, predictability and growth of the economy. I believe predictability of macroeconomic fundamentals is critical for informing pricing assumptions of insurance products and in guiding objective determination of the present value of future liabilities.”