Post-Inquiry Reform Clusters: Presentation by IPEC

Introduction

  1. The Insurance and Pensions Commission (IPEC) was invited to appear before the Parliamentary Committee on Budget, Finance and Economic Development on 14 January 2019 at 100hrs in the Senate Chamber of Parliament.
  1. The objective of the invitation is to give oral evidence on the progress being made in the implementation of recommendations of the Commission of Inquiry into Conversion of Insurance and Pensions Values from the ZW$ to the US$ (COI). The invitation is in response to a petition by disgruntled policyholders and pensions and IPEC`s update will, therefore, assist the Committee to provide an informed response to the petitioners.
  1. Therefore, this paper provides a status update regarding implementation of recommendations of the Justice Smith-led Commission of Inquiry. It also cover IPEC’s comments on issues raised by the Zimbabwe Pensions & Insurance Rights Trust (ZIMPIRT) in its undated letter to Hon. T. Mhona, Chairman of the Parliamentary Committee on Budget, Finance and Economic Development.

 

Background

  1. The Inquiry was conducted during the period 1 September 2015 to 28 February 2017 and the report was finalised and submitted to Government in May 2017.
  1. Commissioners presented the Inquiry’s Report to the President in December 2017 and to Cabinet in February 2018. Subsequently, the Report was gazetted in March 2018 through General Notice 49 of 2018.
  1. The Report was also discussed by Parliament during the period May l to June 2018.
  1. IPEC was mandated by Government to spear-head post-inquiry reforms in July 2018, albeit the mandate letter having been received in September 2018.
  1. Government, through the Transitional Stabilisation Programme (TSP) announced that IPEC has been mandated to spearhead post-inquiry reforms in October 2018, a position re-affirmed in the 2019 National Budget Statement. 

Understanding Findings and Recommendations of the COI

  1. Following gazetting of the Report of the COI in March 2018, IPEC went through the findings and recommendations to come up with a clear implementation roadmap for the recommended reforms.
  1. Whilst many insurance and pension stakeholders, particularly prejudiced policyholders and pensioners regard the compensation for loss of values as the sum-total of the recommendations of the Justice Smith-led COI, the findings and recommendations are broader than the issue of compensation.
  1. IPEC has categorised the recommendations of the Report into 6 Clusters, whose implementation is equally important. Implementation of the recommended compensation framework without the fundamental reforms may result in unintended consequences of destroying the insurance and pensions industry. Below are the categorised cluster:-

Post-Inquiry Reform Clusters

1) Policy and Institutional Reforms

2) Legal Reforms

3) Regulatory and Supervisory Reforms at IPEC

4) Governance reforms at regulated institutions level

5) Measures to regain lost consumer confidence

6) Compensation

  1. Relevant insurance and pension stakeholders would have to plug in the above Clusters to support IPEC’s efforts in implementing recommendations under the respective Clusters.
  1. The attached matrix (Annexure 1) presents a status update on implementation of key recommendations under each cluster.

Conclusion

  1. Whilst IPEC was given the mandate to spearhead the reforms, the need for further stakeholder dialogue is recommended to facilitate ease of implementation of recommendations of a policy nature and issues that were not fully addressed the Commission of Inquiry.