The Insurance and Pensions Commission (IPEC) has been tasked to come up with the conversion rates for more than one million pensioners that lost value during the hyper-inflation era during the period 2000-2008.
Since dollarisation in 2009, there have been running battles between pension firms and pensioners over the little amounts being disbursed by the former.
Responding to a question by Gokwe MP Dorothy Mangami in the House of Assembly, Finance minister Tendai Biti said the government had commissioned IPEC, the insurance regulator and appointed actuaries, to determine values of those policies in the post-dollarised environment.
Mangami had asked Biti to explain the government’s policy regarding the conversion rate of the Zimbabwe dollar to the United States dollar on pension schemes for insurance firms that they undertook during the Zimbabwe dollar era.
“The report will also recommend on the conversion rates. It will also look at the assets of these insurance companies in order to see which ones we are going to monetise to compensate insurance funds. So once the report is ready, I will present it before this August House,” Biti said.
“I suspect that there might be need for necessary legislation to compel offending insurance houses to comply with fairness and we will bring a law if necessary to this August House.”
He said during the hyper-inflation era, short and long-term policies lost value due to inflation and life schemes that were administered by Old Mutual and Zimre Holdings Limited were hedged against, through the purchase of assets and investments at the Zimbabwe Stock Exchange.
“So when we had hyper-inflation, there was a collapse, but these insurance companies did not offer adequate compensation to the falling value,” Biti said.
Market sources yesterday said insurance firms were in the process of submitting information on the values of pensions from 2000-2012, the exchange rates and conversion rates to IPEC.
“We had a May 30 deadline, which was moved to today for submitting all the information on how we handled complaints throughout the period.
“This is to assist the commission with information on the insurance sector,” he said.
Since the adoption of the multiple currency system, most pensioners have been wallowing in poverty.
Some pensioners were receiving as little as $25 per month far below the poverty datum line estimated at over $500 per month.