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Old Mutual unitholders approve ETF delisting and termination
Staff Writer
Unitholders for the Old Mutual Zimbabwe Stock Exchange Top Ten Exchange Traded Fund (OM ZSE TT ETF) have approved the ETF’s delisting and termination of the fund and distribution of all the assets to the current unitholders.
At an Extraordinary General Meeting (EGM) of Unitholders held on December 12, 2024, 20,930,189 shares, representing 99.99 percent of the unit holders, voted in favour of the resolutions, while 1,990 shares, representing 0.01 percent, voted against.
The resolutions were to approve the delisting of OM ZSE TT ETF from the ETF Board of the Zimbabwe Stock Exchange (ZSE) through voluntary termination of the listing in terms of section 11 of the ZSE Listing Requirements.
To approve termination of the fund and distribution of all the assets to the current unitholders of the OM ZSE TT ETF.
On January 13, 2021, Old Mutual listed the Old Mutual ZSE Top Ten ETF (OMTT.ZW), which tracks the ZSE Top 10 Index, comprising the largest ten companies by market capitalisation on the ZSE.
Meanwhile, Old Mutual Zimbabwe (OMZIL) shares remain suspended from trading on the main bourse, the Zimbabwe Stock Exchange (ZSE), despite several commitments and engagements by the government, capital market authorities, and OMZIL.
In June 2020, Old Mutual Zimbabwe, PPC, and Seed Co International were suspended by the government from Zimbabwe’s main bourse due to the fungibility of their shares.
The government argued that the fungibility of the shares was being used to fuel the parallel market as the Old Mutual implied rate (OMIR) was used to determine a forex rate that was widely adopted as the market-determined foreign currency exchange rate—one that was higher than its official counterpart.
In addition, authorities argued, the fungible counters were being used as vehicles of capital flight by investors who would buy a local stock of Old Mutual and then sell off on South Africa’s Johannesburg Stock Exchange.
Shelton Sibanda, chief investment officer at Imara Asset Mgt, recently said the relisting of suspended Old Mutual on the ZSE will create another liquid investment alternative in a blue-chip business with an extensive track record in this country.
“Old Mutual was one of the most actively traded stocks, generating a sizeable portion of revenue for the stockbroking community and also trading income for investors.
“Post the migration of a number of counters to VFEX, trades have been mostly concentrated on a few quality and liquid counters. The (re)listing of OM will add another quality counter and broaden investor options on the ZSE,” he said.
More importantly, he said this will help unlock a lot of ‘dead capital’ tied in the stock that investors could not access and/or redeploy into other avenues.
“The damage done by the OM suspension is huge, both financially and in terms of investor confidence for the country. Its relisting will also help as a signal effect that there is still some value in maintaining a local listing,” said Sibanda.
Zimbabwe was the fifth country in Africa to list an ETF, following South Africa, Nigeria, Kenya, and Egypt.
Post the delisting of Old Mutual, the remaining ETFs will be Morgan & Co Multi-Sector ETF (MCMS.zw), Morgan & Co Made in Zimbabwe ETF (MIZ.zw), Cass Saddle Agriculture ETF (CSAG.zw), and the Datvest Modified Consumer Staples ETF (DMCS.zw).
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Fewer Pensions funds take advantage of offshore investment window
Staff Writer
FBC Securities, a stockbroking and equities research firm says fewer pension funds have taken advantage of the permission by IPEC to invest in offshore assets as a way of mitigating local economic risks and improve returns for pensioners.
In 2022, the Insurance and Pensions Commission (IPEC) of Zimbabwe introduced a regulation permitting pension funds to invest up to 15% of their portfolios in offshore assets.
This move was aimed at enhancing diversification, mitigate local economic risks, and potentially improve returns for pensioners.
“Ever since this investment window was availed few institutions have taken advantage, for various reasons,” FBC said.
It noted that over the past few years, Zimbabwean institutions have increasingly shifted their focus towards offshore investments, a trend fueled by economic, regulatory, and political considerations.
“This move reflects both the challenges faced in the local market and the potential benefits offered by foreign financial environments.”
FBC said Zimbabwe’s economy has faced persistent challenges, including high inflation, currency volatility, and low levels of industrial productivity.
In addition, frequent changes in policies, such as restrictions on foreign currency usage and abrupt shifts in banking regulations, have created uncertainties for local investors.
“Offshore investments grant institutions access to a broad range of financial instruments and markets that are not available locally.
“These include equities, bonds, mutual funds, and alternative assets in global financial hubs. This diversification not only mitigates risk but also enhances potential returns compared to the limited and often underperforming options within Zimbabwe,” FBC said.
It noted that foreign financial markets typically offer greater liquidity, allowing investors to buy and sell assets with ease.
Local markets, on the other hand, often suffer from low trading volumes and limited access to capital while offshore investments provide institutions with the ability to mobilize funds quickly and efficiently when needed.
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Ipec reviews pension fund reporting requirements following none-compliance
Staff Writer
The Insurance Pensions Commission (Ipec) says it is reviewing the reporting requirements for pension funds and has come up with revised reporting requirements after the funds failed to comply with IAS 29—Financial Reporting in Hyperinflationary Economies.
In a circular to pension funds, the new guidelines will be effective from audited financial statements with the year ending 31 December 2025, but early adoption is recommended.
In 2022, Ipec issued circular 24 stating that only pension funds with adequate resources should comply with IAS 29 – Financial Reporting in Hyperinflationary Economies.
It said following the issuance of Circular 24 of 2022, the Commission has noted none-compliance in the audited financial statements submitted.
These include that pension funds received qualified opinions due to not reporting under IAS 29, as Circular 24 caused a deviation from IFRS Accounting Standards.
“Year-on-year comparisons are distorted because the historical figures for the comparative year are not adjusted for inflation, resulting in artificially low comparative numbers,” reads the circular.
Furthermore, Ipec said reported figures do not reflect the true economic reality, potentially disadvantaging the members, and the ratios used to assess industry performance are misstated.
There are also inconsistencies in disclosures, and the Commission has also noted departures from IAS 21—The Effects of Changes in Foreign Exchange Rates.
Ipec said the circular was issued in terms of Section 3(1) of the Insurance and Pensions Commission (Issuance of General Guidelines and Standards) Regulations, published in Statutory Instrument 69 of 2020, which empowers the Insurance and Pensions Commission to issue general guidelines and standards to regulate and monitor the management and administration of pensions and provident funds to ensure that they maintain set standards and ensure compliance with the Pensions and Provident Funds Act [Chapter 24:32]. 2.
In 2020, the Commission issued Circular 20 of 2020 requiring pension funds to adopt International Financial Reporting Standards (IFRS Accounting Standards).
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SUMMARY OF KEY AMENDMENTS INTRODUCED BY THE INSURANCE AND PENSIONS COMMISSION AMENDMENT BILL, 2024
Summary
The Insurance and Pensions Commission (IPEC) Amendment Bill, 2024, introduces significant reforms that will reshape Zimbabwe’s insurance, pensions, and medical health sectors. Notably, the Bill expands IPEC’s regulatory powers to include medical aid societies for the first time, ensuring these entities are subject to the same regulatory oversight as insurers and pension funds. In addition, IPEC is granted the authority to approve service providers such as actuaries, asset managers, and credit rating agencies operating within these sectors, enhancing accountability and operational standards. A major provision in the Bill mandates the maintenance of asset registers for all regulated entities, including insurers, medical aid societies, and pension funds. These entities will now be required to notify IPEC 14 days in advance before disposing of any asset listed in the register. These changes, along with the establishment of a Policyholder and Pensions and Provident Fund Members Protection Fund, reflect a stronger focus on governance, consumer protection, and the overall stability of the sector. As the regulatory landscape evolves, all those operating in the insurance, pensions, and medical health sectors must appreciate the far-reaching implications of the changes proposed in the Bill.
Introduction
The Insurance and Pensions Commission (IPEC) plays a pivotal role in overseeing the insurance and pensions sectors in Zimbabwe, ensuring that these industries are aligned with global best practices. As the regulatory landscape evolves globally and domestically, it is essential for IPEC to stay aligned with emerging trends and best practices. In this context, understanding the Insurance and Pensions Commission Amendment Bill, 2024 is crucial for ensuring compliance with the new regulatory framework.
The Insurance and Pensions Commission (IPEC) Amendment Bill, 2024, gazetted on December 20, 2024, proposes significant amendments to the Insurance and Pensions Commission Act [Chapter 24:21]. These changes aim to strengthen the regulatory framework overseeing Zimbabwe’s insurance and pensions sectors. The amendments have far-reaching implications for insurers, pension funds, asset managers, and medical aid societies, which will now fall under IPEC’s regulatory scope. Below is an overview of the key changes:
- Expanded Definitions (Section 2)
- New definitions for terms such as “asset,” “associate,” and “closely related” clarify ownership and relationship structures in the sector.
- The definition of “control and controlling stake” is refined, specifying thresholds (e.g., 10% ownership or voting rights) for control over an entity’s management and decision-making;
- a) holding of issued shares or financial instruments (such as compulsory convertible debentures) of at least 10% of total issued shares or debentures in a registered entity or its ultimate beneficial owner; or
(b) voting rights attached to the aforementioned shares i.e. at least 10% of issued shares or financial instruments; or
(c) power to appoint directors to the board and other executive committees or remove them.
- Enhanced Powers for IPEC (Sections 3 & 4)
- IPEC’s regulatory powers are expanded to include medical aid societies for the first time, along with insurers, pension funds, and other related entities;
“(a) to register insurers, mutual insurance societies, insurance brokers, medical aid societies and pension and provident funds to ensure that they maintain set standards and ensure compliance with the Insurance Act [Chapter 24:07] and the Pensions and Provident Funds Act [Chapter 24:32], as the case may be;
- IPEC is given authority to approve service providers (e.g., actuaries, asset managers, credit rating agencies) to operate within the insurance and pensions sectors;
to approve for the purposes of continuing or commencing operations in the insurance and pensions sector, actuaries, asset managers, credit rating agencies and other service providers;
- IPEC gains stronger enforcement powers to investigate and enforce compliance, including tougher mechanisms for addressing contraventions of sector laws.
- Governance Reforms for IPEC (Sections 5, 6, 7, 13, 14, 15, 23)
- The composition and qualifications of the IPEC Board are revised. The number of directors is increased to between 7 to 9 members, with a stronger emphasis on experience in fields such as actuarial science, law, and finance.
- Directors will now be subject to stricter conflict of interest provisions, with disqualifications introduced for individuals with ties to regulated entities or conflicting interests.
- Term limits for directors are clarified, allowing a maximum of two consecutive four-year terms.
- The IPEC Board will be required to establish key committees, including audit, risk management, and remuneration committees, to ensure effective governance and oversight.
- The amendments to section 23 introduce stricter penalties for non-compliance with information requests by the IPC. Entities failing to provide requested data could face fines or imprisonment.
- International Cooperation (New Part IIA, Section 23)
Part IIA focuses on cooperation by IPEC with other authorities, allowing IPEC to foster relationships with foreign supervisory and law enforcement authorities. This includes sharing information, conducting investigations, and harmonizing laws and procedures to strengthen cross-border regulation of the insurance and pensions sectors. IPEC is empowered to share privileged information with international authorities, provided confidentiality is maintained.
- Policyholder and Pensions and Provident Fund Members Protection Fund (Part IIB, Section 23)
- A new Policyholder and Pensions and Provident Fund Members Protection Fund is established to compensate policyholders and fund members in cases of insolvency by an insurer or pension fund;
The object of the Fund shall be to—
(a) 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;
(b) payout unclaimed benefits to the rightful owners whenever a claim is made.
- Financing for the Fund will come from contributions from insurers and pension funds, as well as income from investments, unclaimed benefits, and other sources such as penalties and donations.
- A New Fund Board. A new Board will manage the Fund, with members from key industry stakeholders, including insurers, pension fund representatives, and the Insurance and Pensions Commission.
- Compensation Mechanism: The Fund will compensate beneficiaries (policyholders, pensioners, or fund members) who incur losses due to the insolvency of a contributor. Compensation will depend on the type of insurance or pension policy and may be adjusted based on any payments already made by the contributor’s liquidator or insurer.
- Amendment of Part V (General)
- Indemnity of members and employees of the Commission – The Bill introduces a new section 32A which provides for the indemnification of the members of the Board of IPEC, the Commissioner, employees and inspectors engaged by IPEC against personal liability that may arise from loss or damage caused by them carrying out their duties under the Act or any regulations, unless that loss or damage is caused by the person’s negligence or intent.
- Keeping of Asset Register – There is introduction of section 32B which mandates IPEC to keep an asset register for insurers, insurance brokers, medical aid societies, pensions and provident funds and any other regulated entity. All these entities will be required to give IPEC 14 days’ notice before disposing of any asset recorded in the register.
- IPEC is given powers to order the stay of the disposal of any such property if it is of the opinion that the disposal is contrary to public policy.
(1) The Commission shall keep and maintain asset registers for insurers, insurance brokers, medical aid societies, pensions and provident funds or of any other regulated entity, which the Commission may deem necessary.
(2) No insurer, insurance broker, medical aid society, pension and provident fund, shall dispose of any asset that is recorded in the Commission’s register without giving fourteen days’ prior written notice to the Commission and upon the expiry of the notice period shall proceed to dispose the asset.
(3) The notice referred to in subsection (2) shall be accompanied with an independent valuation report and reasons for the disposal.
- Contravention of this section by any entity is an offence.
- Appeals Process (Section 32)
- A new appeals process (Section 32C) is introduced, allowing individuals dissatisfied with IPEC’s decisions to appeal within 14 days to the Minister.
In conclusion, the Insurance and Pensions Commission Amendment Bill, 2024 introduces critical reforms that will significantly reshape Zimbabwe’s insurance, pensions, and medical health sectors. For the first time, IPEC’s regulatory powers are expanded to include the oversight of medical aid societies, ensuring a more comprehensive regulatory framework. The Bill also mandates the maintenance of asset registers for all regulated entities, including insurers, pension funds, and medical aid societies, with a requirement to notify IPEC 14 days before disposing of any assets. These creation of a Policyholder and Pensions and Provident Fund Members Protection Fund, reflect a strong focus on consumer protection. The introduction of an appeals mechanism further strengthens transparency and accountability, providing a safeguard for those who may feel aggrieved by IPEC’s decisions. As the regulatory landscape evolves, all those operating in the insurance, pensions, and medical health sectors must appreciate the far-reaching implications of the changes proposed in the Bill.
Nobert Musa Phiri
Partner: Muvingi & Mugadza Legal Practitioners Harare, Zimbabwe
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Insurance Professional Excellence awards launched
By Olayayi Jack
THE Insurance Institute of Zimbabwe (IIZ) recently hosted its highly anticipated Annual Dinner at the Rainbow Towers in Harare, bringing together leaders, professionals, and key stakeholders from across the country’s insurance sector.
The event, held under the theme ‘Fostering a Culture of Innovation’, was a celebration of the industry’s achievements over the past year and a forward-looking occasion for continued growth and transformation.
IIZ President Clementine Chinyuku opened the evening by extending a warm welcome to all attendees, including the distinguished guests such as Sibongile Siwela, representing Insurance and Pensions Commission commissioner Grace Muradzikwa, and IIZ General Manager, Davison Choeni.
Chinyuku expressed gratitude to Choeni and the entire IIZ team for their tireless efforts in organising the event, which has become a staple for the sector.
“We are incredibly grateful for the unwavering support from the industry, which has been crucial in making 2024 a successful year for IIZ,” she said.
“From the Fundraising Golf Tournament at the Country Club to the Winter School in Nyanga, the industry’s commitment to growth and development has been remarkable.”
The night also featured the inaugural Insurance Professional Excellence Awards, launched in partnership with Zimbabwe Independent.
The awards aim to honour individuals who exemplify leadership, professionalism, and innovation in the sector. With eight distinct categories, the awards celebrated IIZ-trained professionals and highlighted best practices across the industry.
In her address, Chinyuku emphasised the importance of fostering innovation in the face of rapid changes in the market.
“As we face continuous shifts, it is essential that we encourage a culture of experimentation, learning, and improvement,” she said.
“We have seen this innovation firsthand this year, particularly among our young professionals, whose passion and dedication are shaping the future of the industry.”
The evening was marked by a celebratory atmosphere as professionals were recognised for their outstanding contributions.
Chinyuku closed her remarks by urging the sector to “finish strong” in 2024, underscoring that sustained success is built not only on ambition but also on resilience.
She concluded with wishes for a Merry Christmas and a prosperous New Year.
A highlight of the evening was Muradzikwa’s address, read on her behalf by Siwela.
Muradzikwa praised the resilience of the sector, particularly in navigating challenges such as regulatory changes, technological advancements, and evolving consumer demands.
“Insurance is not just a financial safeguard; it is a promise to protect what matters most to people,” she said, echoing the sentiments of Chinyuku.
She also commended the sector’s embrace of digital transformation, which has enhanced customer service, risk management, and sustainability—creating a strong foundation for long-term success.
Muradzikwa also focused on the transformative potential of emerging technologies like artificial intelligence (AI) and machine learning.
“These tools are not merely supportive—they are revolutionising how we understand risk, engage with clients, and run our businesses,” she remarked.
By adopting these technologies, Muradzikwa believes the sector can unlock new opportunities for growth while remaining steadfast in its commitment to providing a safety net for clients.
Muradzikwa emphasised the broader responsibility of the insurance industry to go beyond financial performance.
“As we strive for growth and innovation, we must also remain dedicated to our communities. Supporting local charities, promoting financial literacy, and engaging in initiatives that uplift society are crucial aspects of our role as industry leaders,” she said.
The evening ended on a hopeful note, with Siwela expressing confidence in the industry’s ability to unite and face future challenges with purpose.
“The collective achievements in this room have the potential to lead the industry into a brighter future,” she concluded, urging continued innovation and community engagement as the sector moves into 2025.
The inaugural winners of the Insurance Professional Excellence Awards were also announced, recognising top professionals in various categories.
These were:
Life Professional Underwriter of the Year: Enias Nyaruwembu (FBC RE)
Short Term Professional Underwriter of the Year: Tatenda Nyamande (Nicoz Diamond)
Learning Professional of the Year: Susan Lukungwe
Marketer of the Year: Cynthia Marisamhuka
Short Term Claims Professional of the Year: Margaret Kanyande
Broker of the Year: Handricks Ngena
Distinguished Insurance Professional of the Year: Memory Chabgwera
As the IIZ looks to 2025, the 2024 Annual Dinner underscored the sector’s resilience and commitment to progress.
With innovation at its core, Zimbabwe’s insurance industry is poised to continue evolving, ensuring its vital role in the country’s economic development and social wellbeing.
Tuesday, Jan 14, 2025
