IPEC on pensioners and policyholders compensation
THE INSURANCE and Pensions Commission (IPEC) has said plans to compensate for the loss of value experienced by pensioners and policyholders during the currency conversion in 2009 are at an advanced stage with all regulatory frameworks put in place.
In response to the 2009 currency change, the Government commissioned the Justice Smith Commission of Inquiry in 2015, which culminated in a detailed report that was submitted in 2017 and adopted by Cabinet in 2018.
In September 2018, the Government then mandated IPEC to implement the recommendations of the Justice Smith Inquiry.
In his recent presentation during the Journalism Mentorship Programme, IPEC actuarial director Mr Robson Mtangadura said the commission took its time in ensuring that water tight modalities are in place in a bid to avoid some forthcomings that might compromise the credibility of the sector.
He said after the release of the Smith Commission report, recommendations were that there is a need to compensate policyholders and pensioners who were affected, legislative reforms to make sure that the law is robust to deal with the issue, and capacitation of the commission among other things.
“We have made significant strides in terms of legislative reforms, around September last year the Pensions and Provident Fund Bill was promulgated into an Act, which we are now operationalising and implementing, the Insurance Act and the IPEC Act are still with Parliament and we hope that those will be addressed soon.
“Capacitation of the commission, we have created structures so that we become robust and effective regulator so that we deal with issues we are experiencing in the market,” he said.
He said looking at the complexity of the conversion and the hyperinflation they needed more time to put everything in place and find an effective way to convert recom-mendations into reality.
“We spent more time on the preparation side and we are happy that we are at the advanced level, as of last week we made active engagement with the Attorney General’s office and the Ministry of Finance just to make sure that the regulations are in a format that complies with the drafting requirements and the legal provisions are spelled out and covered,” said Mr Mtangadura.
He said the commission has already advised the industry that the regulations are now in place and they are putting their houses in order waiting for the regulations to be gazetted.
He added that the industry is now at the advanced stage in doing all the preliminary work required.
“Once the regulations are gazetted we do not expect much delay in terms of implementation and we expect to close this chapter as soon as possible so that we start building confidence in the sector once again,” he said.
The Government also contributed US$175 million towards partial compensation of insurance policyholders and pension scheme members for losses they suffered during the period leading to 2009 when the country switched to the multi-currency system.
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