Finalising the pre-2009 compensation deal for policyholders who lost value of their investments when the government adopted a multi-currency system, abandoning the Zimbabwe dollar to tame runaway inflation that precipitated the collapse of the local currency, has proven challenging due to poor data integrity in Zimbabwe’s insurance and pensions industry The value of the Zimbabwe dollar-denominated investments was instantly destroyed by the conversion to the US currency,
When policyholders were left counting their losses following the monetary action that caused the Zimbabwe dollar to collapse at that time, industry confidence reached an all-time low During the conversion process, policyholders lost their investments, estimated to be more than US$3bn , resulting in huge investments turned into few cents or dollars Additionally, players in the sector told Business Times payment of compensation was a crucial step in reviving trust in the insurance and pensions industry
The general public is worried whether justice will be done for the value lost However, the process is being threatened by lack of granular data Last year IPEC ordered insurers and pension funds to submit 2009 compensation plans by December 31, 2023 However, of the 1 200 pension funds that submitted plans, only one – the Mimosa Pension Fund- had complied with the compensation scheme requirement
IPEC Commissioner Grace Muradzikwa stated that the non-compliance was brought about by a lack of granular data , which the compensation criteria required However, the pension funds lacked “We have a serious problem of data.We received and reviewed 1 200 compensation schemes against the expected 1 264 compensation schemes,” Muradzikwa said She added: “But, only one compensation plan (Mimosa) met all the requirements and has been approved
So, we are assessing these compensation plans in line with the law, which is Statutory Instrument 162 They are saying, let us use estimates and judgments So, I say it’s the law vs practicality.”
Tapiwa Maswera, an actuary, concurred with Muradzikwa saying: “We seem to be in a difficult situation, and I don’t see any easy way out.”
Williefaston Chibaya, the president of the Zimbabwe Pension Funds Association said the situation was dire Source: Business Times
All Zim News
All Zim News is a central hub for all things Zimbabwean, curating news from across the country so no story is missed
Alongside aggregation, our team of nationwide reporters provides real-time, on-the-ground coverage Stay informed and connected — reach us at admin@allzimnews.com.
Source: Businesstimes
