IPEC empowered to issue general guidelines and standards
Staff Reporter
FINANCE and Economic Development Minister Mthuli Ncube has announced legislation empowering the Insurance and Pension Commission (IPEC) to issue general guidelines and standards whenever the Commission considers it necessary, convenient and in the best interest of policy owners, and pension and provident fund members.
IPEC is a statutory body that was created through an Act of Parliament, the Insurance and Pensions Commission Act, to regulate the insurance and pensions industry in Zimbabwe. The Commission’s principal function is to protect the interests, rights and benefits of insurance and pension consumers and to ensure that there is general stability of the insurance and pensions industry.
According to the minister, who made the notification through Statutory Instrument (SI) 69 of 2020, the guidelines and standards may provide for a number of scenarios, including the revaluation of assets and liabilities by the insurance and pensions industry after a currency conversion. The SI went on to define currency conversion as the process through which any currency which has been legal tender in
Zimbabwe is superseded by any other currency.
Zimbabwean introduced the Zimbabwean dollar last year and has been struggling to maintain its value and confidence, with a recent statement by the Treasury chief also announcing the trade of foreign currency at a “true” market exchange rate.
According to the minister, the guidelines and standards will also provide for disclosures to be made by the insurance and pensions industry; risk management and corporate governance practices to be observed by the insurance and pensions industry; as well as market conduct practices to be observed by the insurance and pensions industry.
“Compliance with any general guideline or standard issued by the Commission, shall form part of the audit of the entity and shall be reported upon in the annual audited accounts required in terms of the Insurance Act and Pension and Provident Funds Act,” said the statutory instrument.
The instrument also further highlighted that, in the issuance of the general guidelines and standards, the Commission shall at all times have regard to the need to attain objectives which include the protection of the rights, benefits and other interests of policy owners, pension fund members and their beneficiaries; as well as the alignment of the activities of persons carrying on insurance and pensions business in Zimbabwe with the economic, financial and social policies, objectives and interests of the State.
The Commission is also required to have regard to the monitoring of the solvency of insurers, pension and provident funds; the maintenance of sound financial principles and best practice in the conduct of insurance and pensions business in Zimbabwe; and the regulation and strengthening of the insurance and pensions industry in Zimbabwe.
The statutory instrument also announced penalties for non-compliance; with any person in contravention of any general guideline or standard issued in terms of these regulations being deemed to be in default and liable to a fine not exceeding level 4 for each day that the contravention continues up to a maximum of sixty days.
“A penalty imposed in terms of subsection (1) shall constitute a debt due to the Commission by the person liable to pay it, and may be recovered by action in a court of competent jurisdiction by proceedings in the name of the Commission,” says the piece of legislation, adding that any person who, after sixty days referred to in subsection (1), continues to be in contravention of the guideline or standard issued in terms of the regulations would be guilty of an offence and liable to a fine not exceeding level 5 or to imprisonment for a period not exceeding six months or to both such fine and such imprisonment. FinXOnline
