Unpacking the Insurance Act and the Pension and Provident Funds Acts with IPEC Head of Pensions
Josphat Kakwere
Noah Kupeta
The Insurance and Pension Commission (IPEC) Head of Pensions, Josphat Kakwere, has described the recent pronouncement by President Emmerson Mnangagwa on the amendment of the Insurance Act and the Pension and Provident Funds Act ‘as welcome and long overdue’. Our reporter, Noah Kupeta (NK), caught up with IPEC Head of Pensions, Josphat Kakwere (JK), to unpack critical for the benefit of policy holders and pensioners. We publish excerpts of the interview below.
NK: What caused the call for the amendment of the Insurance Act and the Pension and Provident Funds Act?
JK: The Insurance Act was enacted in 1987 while the Pension and Provident Funds Act was enacted in 1976. Therefore, there was need to amend the Acts to bring them into line with emerging trends in areas of good corporate governance and the socio-economic environment. The major thrust for the amendments of the Acts, is to enhance the protection of policyholders and pension fund members.
NK: What is your reaction towards this development as a regulator?
JK: Amendment of the Acts was long overdue. In their current state, the Acts do not adequately empower the Commission, which has resulted in the Commission failing to enforce the ideal good corporate governance practices on the service providers and other players in the Insurance and Pensions Industry.
Such a state, may be prejudicial to policy-holders and pension fund members. Therefore, as a regulator for the insurance and pensions industry, we welcome the development, as it will enable us to be more effective in carrying out our mandate.
NK: How far has the Pension and Provident Funds Bill gone in terms of its fulfilment into becoming law?
JK: The Bill was approved by Cabinet and President Emmerson Mnangagwa included it on the legislative agenda for the Second Session, of the Ninth Parliament, which means that Parliament will now be seized with the Bill
NK: What are the key concerns to be addressed by the Pensions Bill?
JK: The objective of the Bill, is to enhance protection of fund members and beneficiaries’ interests, security of funds and sustainability of the pensions industry. Among other things, the Bill seeks to improve corporate governance at IPEC and that of the regulated entities; empower the Commission to enforce compliance with the law through imposing penalties and appointing an interim administrator to oversee the affairs of a troubled institution; and ensure that members and beneficiaries are protected, as it enshrines the treating customers fairly principles. The above provisions are lacking in the current Act and will thus, go a long way in creating an enabling environment that ensures adequate protection of pension fund members and beneficiaries.
NK: Medical Aid Societies in Zimbabwe are not being regulated by IPEC. In the same vein government has indicated that it is working on their regulation as insurers. What is your comment in this regard?
JK: As a statutory body, IPEC stands guided by Government policy on regulation of medical aid schemes. At the end of the day, what is important is for the Medical Aid Schemes to be regulated prudentially, to ensure that consumers of such services, are adequately protected.
NK: Most Life Assurance Companies providing funeral assurance are bound to observe the Public Health Act. As the regulator, are you satisfied with their conduct in this regard?
JK: IPEC’s mandate is confined to the assurance aspects of the business as guided by the Insurance Act and does not extend to funeral services.
