Absence of a prudential and market conduct regulator disadvantages health insurance in Zimbabwe: IPEC
Insurance24
HARARE, The Insurance and Pensions Commission (IPEC) says health insurance in Zimbabwe has malfunctioned oftentimes to the disadvantage of not only thousands of needy patients but also critical service providers.
These, according to the Manager Insurance and Micro-Insurance ,Insurance and Pensions Commission, Mr Munyaradzi Machinjika at the Zimbabwe Medical Association Workshop obviously constraints growth and development in the entire medical services value chain.
The service providers, Machinjika include such as members of Zimbabwe Medical Association (ZIMA) and other supply-side industries such as pharmaceutical manufacturers and transporters.
He said Ipec view current challenges in the medical health sector as primarily due to the current absence of a prudential and market conduct regulator such as IPEC. Prudential regulation is the regulation of financial institutions and supervision of the market conduct of these institutions following set down legal requirements.
IPEC uses the CARAMELS framework which acronym refers to Capital adequacy, Asset quality, Reinsurance, Adequacy of claims and actuarial, Management soundness, Earnings and profit-ability, Liquidity and Sensitivity to market risk.
“Such a framework may be applied to medical insurance regulation to promote financial soundness and sustainability of the sector for the benefit of health fund members,” he said.
Machinjika said the health insurance sector is currently bedeviled with malpractices such as claims defaults, cash-upfront requirements and shortfalls which can be corrected by robust prudential and market conduct regulation by a competent regulator such as IPEC.
As at 30 June 2017, the insurance sector had an asset base of US$2,1 billion. IPEC regulated pensions industry had about 1,384 pension funds as at 30 June 2017 with a total membership of 590,484.
The pensions industry reported a total asset base of US$3.52 billion as at 30 June 2017. Thus, in total the insurance and pensions industry had total assets of US$5.62 billion as at 30 June 2017, the bulky of which is invested in various investment vehicles for the benefit of policyholders and the economy.
