Ipec working to ensure prescribed assets status is given to value preserving assets
HARARE, The Insurance and Pension Commission (Ipec) says its working with government to ensure prescribed assets status is given to value preserving assets, Insurance 24 can report.
Zimbabwe’s present inflationary environment has increased the risks associated PA investments, particularly in as far as they are performing below inflation and prescribed assets mostly attract fixed interest rates, making it difficult to reconcile a fixed interest instrument and very high inflation.
Insurance and pension firms’ investments in underperforming assets have been noted to be an expropriation of part of future pensions without compensation.
Ipec commissioner Grace Muradzikwa today told the commissions’ AGM that Pensions industry compliance was 7,6% as at 30 March 2020 against a min threshold of 20% with 46/85 insurance entities were non –compliant as during the period.
In her update she said non-compliant entities were penalized except those that had submitted compliance plans or were close to the threshold.
“Non-compliant entities were penalized except those that had submitted compliance plans or were close to the threshold, Monthly progress reports requested from all noncompliant entities. Commission working with government to ensure PA status is given to value preserving assets,” she said.
In the comparable quarter in 2019 an average 7.4% average compliance ratio was recorded by the pensions industry while the insurance registered a 7% PA ration compliance as poor compliance was mainly noticed in life and funeral insurance sectors.
In Zimbabwe prescribed assets, are not sought after, resulting in local insurers failing to comply with the legislation on portfolio investments, due to its potentially negative impact on client returns, according to several industries players.