THE Zimbabwe Association Funeral Assurers (Zafa) has pleaded with the Insurance and Pension Commission to extend a grace period to comply with the sector’s new capital requirements due to the underperformance of the economy.
Victoria Mtomba Business Reporter
Speaking at the launch of Zafa, the association’s president Edward Gomba said the liquidity crunch and low capacity utilisation in most companies has affected funeral assurance companies as they depend on various sectors of the economy. The meeting was also attended by IPEC commissioner Manett Mpofu.
“Madam commissioner, we plead with you to have a softer heart as we are approaching the June 30 2014 capitalisation deadline, to give to those members who would have delayed to capitalise an extension. Your understanding is greatly appreciated,” Gomba said.
Zafa was established in 2000 to promote unity, networking and to lobby government and other authorities on matters that concern the industry.
Funeral assurers are expected to meet the minimum capital requirements of $1,5 million according to IPEC. The increase were set in staggered terms that should be fulfilled by June 2014.
Gomba said the amount is too high for many players in the sector.
“We depend on high employment levels for premiums. It is more challenging now because companies are failing even to pay their employees salaries on time resulting in our clients failing to pay their premiums. This has resulted in us as an industry having more lapses than active business,” he said.
Addressing delegates at the same forum, IPEC commissioner general Manett Mpofu said the funeral assurers have been able to pay policyholders on time and less complaints have been handled.
Mpofu urged the president of Zafa to pass on power to the next person as it is not a permanent position.
“And note that duties of office will be discharged according to circular 11 of 2013 which states that the term of office is three years and be reminded this is not a full time job,” she said.
Mpofu said the launch of the funeral assurance association should be followed by proper corporate governance that would restore confidence in the sector.
According to the IPEC second quarter report the country has 23 operational non life insurance companies, nine operational reinsurers, 29 insurance brokers and three reinsurance brokers as at June 30,2013.
The report shows that non-life industry continued to witness growth in volume of business generated in terms of gross premium written. Total gross premium written by non-life insurers amounted to $117,82 million for the six months ended June 30 2013.