Businesses hiking prices of basic goods without justification are being investigated and the Government will take action in cases where there is profiteering, Information, Publicity and Broadcasting Services Minister Monica Mutsvangwa said in Harare yesterday after the weekly Cabinet meeting.
“Cabinet takes exception to the recent unwarranted hikes in prices of goods and services by unscrupulous businesspeople. Government would like to inform the nation that investigations into the matter are currently underway, and that Government will leave no stone unturned until it brings the culprits to book,” said Minister Mutsvangwa.
Cabinet also discussed the Insurance Amendment Bill. The laws governing the insurance and pensions sectors are due for upgrading and updating to ensure best practice is followed and modern business openings properly regulated, with enhanced powers for the Insurance and Pensions Commission and with the National Social Security Authority, the biggest pension fund, now coming under the commission’s regulatory authority.
Minister Mutsvangwa said Cabinet approved the Insurance Amendment Bill and the Insurance and Pensions Commissions Bill that were presented by Attorney General Advocate Prince Machaya.
The Insurance Amendment Bill seeks to repeal and replace the Insurance Act and introduce best practices into the country’s insurance sector.
“Through the proposed amendments, Government intends to: strengthen the institutional capacity of the Insurance and Pension Commission and the regulatory framework to create a robust and internationally respected insurance and pension industry regulator; synchronise the main acts that guide the regulation of the insurance and pensions industry; address identified deficiencies in the current legislation; and align insurance and pension legislation to international best practices in order to build a stronger regulatory framework that promotes growth and development of the insurance and pensions industry,” she said.
The Bill sets out the rules to be followed in merging insurance societies in the transfer of insurance business to another registered insurer and in the payment of premiums to the registered insurer whenever an insurance broker receives the premiums from policy holders.
“Cabinet stressed that in order to guard against insolvency by insurance societies, every registered insurer will now be required to maintain a prescribed level of solvency. It will now be compulsory for insurance societies to submit financial statements within 90 days of each financial year,” she said.
“All insurers will be required to submit to the commission, an actuarial valuation report which must be harmonised with the relevant audit report.
“Insurers who wish to conduct electronic business must get commission approval while the issuance of disability benefits in life policies will be according to clearly spelt out conditions. An insurance fund shall not be executable by creditors who are not the policy owners. A registered insurer may not place assets outside Zimbabwe without commission approval, including on percentages that may be prescribed.”
In the event of currency change, Cabinet noted that steps must be taken by the registered person, with one of the steps being the actuarial valuation of the insurance business, to re-calculate the liabilities and assets in line with the new currency.
The Insurance and Pensions Commission Bill, said Minister Mutsvangwa, seeks to ensure the maintenance of a fair, safe and stable insurance and pensions sector for the benefit and protection of policy holders and pension fund members.
“The Bill gives the Insurance Commission the powers to accredit actuaries, auditors, asset managers, credit rating agencies and other service providers. The commission will conduct investigations where it sees fit for the purpose of preventing contraventions in the insurance sector through provisions of the Bill.
“The commission may cooperate with any supervisory authorities, including foreign law enforcement authorities or insurance and pensions authorities in investigations, enforcement, co-ordination and harmonisation of laws, procedures and standards,” she said.
Its board would ensure compensation was paid to beneficiaries for losses incurred and would determine the level of such compensation based on the different classes of insurance policies or type of pension or provident fund.
“Above all, the commission shall
keep and maintain asset registers for insurers, insurance brokers, pensions and provident funds. The National Social Security Authority, medical aid societies and any other persons conducting insurance business will now be subject to regulation by the commission,” she said.
Minister Mutsvangwa said Cabinet also approved the proposed re-targeting of the Food Mitigation Programme beneficiaries as presented by the Minister of Public Service, Labour and Social Welfare, Professor Paul Mavima.