Cabinet has approved a bill that seeks to repeal the Insurance Act.
Broadcasting and Information Minister Monica Mutsvangwa, yesterday said the bill also seeks to and introduce best practices in Zimbabwe’s insurance sector, which plays an important role in socio-economic development.
“The Bill sets out the rules to be followed in merging insurance societies, in the transfer of insurance business to another registered insurer, and in the payment of premiums to the registered insurer whenever an insurance broker receives the premiums from policy holders,” Mutsvangwa said.
“Through the proposed amendments, Government intends to strengthen the institutional capacity of the Insurance and Pension Commission and the regulatory framework to create a robust and internationally respected insurance and pension industry regulator; synchronise the main acts that guide the regulation of the insurance and pensions industry; address identified deficiencies in the current legislation; and align insurance and pension legislation to international best practices in order to build a stronger regulatory framework that promote growth and development of the insurance and pensions industry.”
The Minister also said the latest bill will enable that every registered insurer will now be required to maintain a prescribed level of solvency in order to guard against insolvency by insurance societies.
“It will now be compulsory for insurance societies to submit financial statements within ninety days of each financial year,” Mutsvangwa said.
“The statements must be prepared in accordance with generally accepted accounting practices.”
“All insurers will be required to submit to the Commission an actuarial valuation report which must be harmonized with the relevant audit report,” she went on.
Experts had criticised the Insurance Act for failing to offer guidance in the case of a pandemic like the COVID-19 which resulted in businesses suspending operations for weeks, days and months.
Mutsvangwa said, “In the event of currency change, Cabinet noted that steps must be taken by the registered person, including the actuarial valuation of the insurance business in order to re-calculate the liabilities and assets in line with the new currency. This provision is expected to enhance the protection of policy holders.”