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Pensions And Insurance Sector Optimistic Of Industry Growth

Pensioners can now buy discounted groceries in few selected retail shops…

By Shingirai Vambe

A sad situation of value destruction, dwindling order books, shoddy performance and a general atmosphere of despair found in some businesses is the opposite of what the insurance industry is experiencing, the Insurance and Pensions Commission (IPEC) reveals.

IPEC Commissioner, Dr Grace Muradzikwa is optimistic of growth in 2023 despite that the country is facing a myriad of challenges which include inflation among others. 

IPEC and the National Social Security Authority (NSSA) launched the 2023 Insurance and Pensions Journalists Mentorship program last Friday morning, to capacitate the media covering social security issues, to unpack, investigate and offer fairly-balanced coverage in that particular sector.

IPEC public relations manager, Lloyd Gumbo, said the insurance and pension are perceived complex and as a result journalists shy away from covering the sector, yet they play a critical role in demystifying Insurance and Pension matters. He added that the program will help the media to get a better understanding of the industry.

IPEC Commissioner, Dr Grace Muradzikwa

Known stories from the industry haven’t been pleasing, with the current house saga implicating the minister responsible, Paul Mavhima, found in the midst of the matter involving a good value of money worth US$400 000.

The Association of Healthcare Funders of Zimbabwe (AFHOZ) also revealed to this publication that the sector is seriously facing challenges, with most clients failing to get services after submitting their medical aid contributions every month. Inflation was cited as a major setback to the industry.

As we speak, Premier Service Medical Aid Society (PSMAS) is closed.

Another sector is the defunct third part insurance established according to the Roads Act Chapter 13 1.1 which makes it compulsory for motor vehicles to be insured against 3rd party risk such as injuries contributed from the passenger insurance.

Parliament of Zimbabwe is seized with a number of issues regarding the insurance industry in Zimbabwe, including, submissions made in the recent judgment by Justice Smith on compensation of those affected by changes in the monetary sector.

Legislators are lobbying for repeal for a number of laws regarding the insurance sector. 

Muradzikwa told journalists that they are working towards insuring fair and honest treatment of citizens as the regulator, making sure that players in the industry comply and respond to their obligations.

She however mentioned the rising changes in the public and private sectors where most people are now in the private sector without terminal benefits.

NSSA has been in the picture since 1989 when the Law was passed in Parliament during the reign of the late vice president, John Nkomo as a Minister of Public Service, Labor and Social Welfare.

The aim of NSSA was to insure security for employed citizens of Zimbabwe during and after employment. It was one of the noble ideas for tax payers. NSSA has managed to invest and is still investing towards sustainable growth in both rural and urban setups. 

NSSA General Manager, Charles Shava, told journalists that a greater percentage of Zimbabweans, particularly those working in the informal economy, are currently excluded from social security net. 

“Only about 1.4 million Zimbabweans are covered under our social security schemes against an estimated total labour force of 3.913 million according to the Q3-2022 ZIMSTATS labour force presentation,” said Shava.

He highlighted on initiatives that the national social security is embarking on as an aim to improve the livelihoods of current members by doing such projects like piped water schemes, gardens and solar projects in response to the new renewable energy thrust.

Chegutu West Legislator, Hon Dexter Nduna said, “the vicarious liability is a form of strict liability in which the employer is strictly liable for the delicts of his or her employees committed in the course of their employment. Strict liability has also been adopted in various statutory provisions in Zimbabwe.”

NSSA’s monthly allowance to its members has been widely condemned as mockery for the elderly who queue every month to collect petty funds which are not enough to pay for their transport fares back home. Majority of them are getting less than ZWL $50 000 a month (US$50) when the food poverty line for one person is ZWL $22 386 per month (US$22) and the total consumption poverty line (TCPL) per person is ZWL $29 563 (US$29) as in February 2023.

ZIMSTAT said, according to current census report, now a household consist of an average of 10 members per family, from an average of 5.

Shava said his organisation was now regularly reviewing pension levels so as to cushion pensioners against inflationary pressures and preserve the buying power of their pensions. He added that they are also teaching various institutions of occupational safety and health (OSHE) in workplaces as well as improvement in the resilience of pensioners through income generating projects, discounted groceries at selected retailers, zero bank charges at NBS and ZB banks, goat farming and a mobile clinic facility.

However, Economic analyst, Prof Gift Mugano told the Post On Sunday that, it’s the tax payers money that is used to build the economy world over, to build infrastructure that will have long term benefits to everyone including those that contributed.

“Tollgates, airports, water, electricity to mention just a few must contribute to the livelihood of pensioners, because their contribution was used to build infrastructure, hospitals, clinics and schools thus they are supposed to get a a good monthly allowance every month from these facilities but that is not the case in Zimbabwe, corruption has killed our country,” said Mugano.

Lawyer and Opposition member of Parliament, Hon Tendai Biti, told this publication that the problem in Zimbabwe is that the majority of laws that have been done outside Parliament, and are from the President through the Presidential Powers Act, Statutory Instruments by the Minister of finance as stated in Section 2 of the finance Act.

Muradzikwa highlighted on the compensation of all those who lost their monetary value between 2008 and 2009, money that was in people’s bank accounts, policies and stock markets. She said a Statutory Instrument of that effect is now with the Attorney General and hoping that sooner than later, people will be getting what belongs to them.

“As the regulator we are optimistic of an improved pension and insurance benefits by continued implementation of guidance paper on currency reforms as well as enforcing expenses framework and lastly focusing on the funeral product remodeling,” said Muradzikwa.

The funeral insurance sector has received a backlash from local consumers, complaining of being short changed and not getting value for their money despite paying large sums of money on a monthly basis.

IPEC said their doors are open, as the Commission, to address issues or complaints from either parties pertaining to pensions and insurance in the event one party is aggrieved.