The Sunday Mail
SADC is working towards harmonising insurance regulations in the region to promote international best practices.
Zimbabwe is considered to have one of the best insurance sectors, in terms of structure and expertise, in Africa.
The insurance penetration rate is currently pegged at 5 percent and is projected to rise to 20 percent in the next three years buoyed by the performance of new small and medium-scale insurance companies.
Insurance and Pensions Commission acting commissioner Mr Pupurai Togarepi said Government and IPEC were working towards strengthening the regulatory environment.
“A study was done (by Sadc) not only for Zimbabwe but all member countries. The main objective was premised on enhancing harmonisation of insurance regulation and supervision among Sadc member states as well as promoting international best practices.
“Some gaps were identified in our present insurance laws and regulations (and) Government and IPEC are in the process of amending the relevant Acts in order to strengthen the regulatory environment.
“May I also take this opportunity to tell you that Zimbabwe has one of the most developed insurance industries in Africa both in terms of structure or morphology and expertise,” said Mr Togarepi.
Proposed amendments are expected to be on the Insurance Act, the Insurance and Provident Act and the Insurance and Pension Commission Act to address deficiencies in existing legislation and align it to international best practices.
Finance and Economic Development Minister Patrick Chinamasa recently said some of the amendments would focus on corporate governance, by reconstituting the IPEC board and addressing regulation of the entire industry.
The amendments are expected to be gazetted early next year.
It is also understood that Treasury expects the insurance and pensions industry to actively participate on the Zimbabwe Stock Exchange after demutualisation.
In July, Minister Chinamasa and stockbrokers signed a memorandum of understanding to pave way for ZSE’s demutualisation.
Post-demutualisation, stockbrokers will hold 34 percent of the exchange from the current 68 percent, while Government will hold 16 percent, up from 32 percent.
Stockbrokers’ shareholding will be split equally among the holders of proprietary rights.
The remaining 50 percent will be open to private investors where 20 percent will go for a private placement to raise US$2 million and 30 percent will be floated through an initial public offer to raise US$3 million.
The move will bring total ZSE capital to US$10 million after an initial valuation of US$5 million.
Government plans to set up a public listed company with 20 percent stake of the firm offloaded to banks, and insurance and pension funds.
The Sadc study says Zimbabwe has no universal old age pension and a regulator specifically dedicated to the pensions industry.
“The pensions regulator is part of Insurance and Pensions Commissioner which is responsible for the regulation of the insurance and pensions industry in Zimbabwe.
“There are no separate pensions regulation objectives for pensions which are different from insurance.
“The regulator reports to the Ministry of Finance (and) the head of the pensions regulator does not have any statutory role,” reads part of the study.
IPEC oversees and supervises all insurance and pension schemes in Zimbabwe.
