Government establishes Policy Holder Protection Fund
HARARE, Government is set to establish a Policy Holder Protection Fund, which is meant to protect clients in the insurance and pension industry.
According to the 2019 National Budget, the pool fund is similar to the Deposit Protection Corporation (DPC) which compensate depositors in case of bank failure.
“In order to create a pool of resources similar to the Deposit Protection Fund, a Policy Holder Protection Fund is being established and administered by an Independent Board of Trustees.
“The Fund, which is meant to protect clients in the insurance and pension industry, will be made up of proceeds from the Guardian Fund, complemented by other contributions from insurance and pensions industry,” the Finance Minister Mthuli Ncube said in the budget report.
He said the Guardian Fund receives significant amounts of remittances from the insurance and pensions industry and also makes disbursements from the fund.
The Master is empowered to remit to the Consolidated Revenue Fund any moneys that remain in trust for a period of 30 years from the date of deposit.
“Whereas the Administration of Estates legislation establishes the Guardian’s Fund, which is administered by the Master of High Court, the fund keeps some trust funds that would have remained unclaimed from insurance companies and pension funds for a period of 5 years.”
Following Government’s adoption of the Justice Smith-led inquiry into the conversion of insurance and pension values, IPEC, as the industry regulator, was given the mandate to implement the necessary reforms to improve governance of insurance and pension entities, as well as supervise implementation of the compensation framework.
Ncube said this was to ensure that prejudiced members of the insurance and pension schemes get their benefits without compromising stability and confidence in the industry.
“In order to facilitate smooth implementation of the recommendations, Government will enact legislation to enforce and guide the compensation process,” he said.
