Insurance and pension funds may challenge the findings of a report produced following an investigation into the conversion of insurance and pension values when the country switched to US dollar values in 2009 amid claims the report is fraught with incorrect claims.
Hundreds of thousands of insurance policy holders and pensioners had their hopes raised when the commission of inquiry, headed by retired judge Justice Smith concluded that many people were prejudiced in the conversion of values and were entitled to additional pay outs.
But the general feeling among industry captains is that compliance with recommendations of the report, which has already been submitted to President Mnanangwa, will bring onerous obligations on the companies.
Sources said the findings from the inquiry resulted in the production of a mere “report”, which companies in the insurance and pension industry could challenge. A statutory provision is also necessary to effect it.
“This is just a report, which can be challenged. Further, if they want to enforce it they would need to come up with a statutory instrument,” the source said, adding the report was fraught with inaccuracies.
The Life Offices Association of Zimbabwe (LOAZ) has already started looking into the findings of the Government commissioned investigation.
Although LOAZ said they were still studying the over 400 page document to ascertain its implications, Business Weekly understands that there is likelihood the affected companies may challenge recommendations.
LOAZ secretary general Mavukeni Rufai confirmed the association had started looking into the report, but said a position was yet to be taken since the report was long and would take time to exhaust its contents.
“We are studying the report. We hold meetings once every second Tuesday of the month, although the report will not come under discussion when we meet next this coming Tuesday,” Rufai said this week. “We are still studying the report; we will come up with a position.”
The commission’s investigation covered the period 1996 to 2014 and recommended that funeral policy holders should be compensated for alteration of benefits or cancellation of policies following dollarisation.
But Business Weekly gathered that the general consensus with the industry was that the recommendations in the report were at the present moment just an opinion. “It is still just an opinion anyone can have.”
The commission of inquiry concluded that a fair and just compensation framework could be implemented for the loss of value suffered by policy-holders and pension fund members over the investigation period.
“In the recommended compensation framework, the commission assessed the asset and capital structure of the industry in evaluating its capacity to compensate for loss of value. The commission was satisfied that the industry has reasonable capacity to make good and compensate policy-holders and pension fund members for loss of value.
“The loss of value has impoverished policy-holders and pensioners and there is an expectation that the findings of the commission will remedy this. Government is, therefore, urged to implement the recommended compensation framework as a matter of urgency, in order to alleviate the plight of impoverished policyholders and pensioners.”