Insurance and Pension amendment bill seeks to strengthen sector amid failures

Struggling pensioners who have waited years for their benefits and policyholders left in the lurch by collapsing insurers may find some relief, as Parliament moves to amend the Insurance and Pensions Commission Act to strengthen oversight, establish a protection fund and tighten governance in the sector. The Insurance and Pensions Commission Amendment Bill (H.B. 7A, 2024), currently before Parliament, introduces sweeping changes to the regulatory framework governing Zimbabwe’s insurance and pensions industry, a sector long plagued by complaints of delayed payouts, mismanaged funds and opaque operations.

For thousands of Zimbabwean pensioners, the promise of a comfortable retirement has often turned into a nightmare. Many have gone years without receiving their benefits, while others have watched their hard-earned savings eroded by inflation and poor investment decisions. Policyholders, too, have faced uncertainty when insurers become insolvent, with little recourse to recover their money.

The Bill seeks to address these challenges through a combination of enhanced regulatory powers, stricter governance requirements, and the establishment of a safety net for policyholders and pension fund members. One of the most significant provisions in the Bill is the creation of the Policyholder and Pensions and Provident Fund Members Protection Fund under the new Part IIB. The object of the Fund, as stated in new section 23F(5), is twofold, “to compensate policyholders and pension, provident or retirement annuity fund members in accordance with this Act for losses directly incurred by them in the event of a contributor becoming insolvent” and to “payout unclaimed benefits to the rightful owners whenever a claim is made.” This means that when an insurer or pension fund collapses, policyholders and pension fund members will have a mechanism to claim compensation for their losses, a safeguard that has been conspicuously absent in the current framework.

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The Bill also addresses the vexing issue of unclaimed benefits, which have accumulated over years in the coffers of insurers and pension funds. New section 23F(3)(g) includes among the Fund’s resources “unclaimed benefits from insurers and pensions, provident or retirement annuity funds that have exceeded five years,” as well as “unclaimed benefits after dissolution of pensions, provident or retirement annuity fund or winding up of an insurer.”

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