TREASURY expects the insurance and pensions industry to actively participate on the Zimbabwe Stock Exchange after demutualisation as government moves in to amend key legislation related to the sector.
This follows a memorandum of understanding (MoU) signed between government and the local bourse last month for the transformation of the bourse into a publicly traded firm.
Speaking after a government and Insurance and Pensions Commission (IPEC) consultative meeting in the capital last week, Finance and Economic Development minister Patrick Chinamasa said he was looking forward to the industry taking up a stake in the stock exchange after demutualisation.
“We are going to set up a public listed company and it is my hope that the 20% stake in the public listed company can be offloaded to the banking sector, insurance and pension funds,” he said.
Government also expects that after demutualisation, both government and stockbrokers will lessen shareholding so as to have a more diversified shareholding arrangement.
Chinamasa said the consultation would be over proposed amendments to three pieces of legislation, namely the Insurance Act, the Insurance and Provident Act and the Insurance and Pension Commission Act.
He said that although individual bills would be submitted separately for parliamentary approval, the objective of the MOU was to have the principles approved jointly, with amendments to the insurance law expected to be gazetted by early 2015.
“The proposed amendments are addressing issues that we have picked up which expose deficiencies in the legislation and so the proposed amendments will address those deficiencies. We are also bringing up our legislation to international best practices,” he said.
“So we have identified where we have lagged behind in terms of international best practices and the amendments are seeking to bring up that level we want with respect to pension and insurance schemes,” Chinamasa said.
He said some of the amendments are also addressing issues of corporate governance both by reconstituting the constitution of the IPEC board and addressing issues of regulation of the industry as a whole.
“We have also looked at the relationship between IPEC and NSSA [National Social Security Authority] and consultation that whatever aspects we are raising about regulation of NSSA should also first be referred to a tripartite forum of workers, government and employers,” he said.
IPEC is in charge of the oversight and supervisory role over all insurance and pension schemes in the country.
“We have also been looking at regulation of medical aid societies and this is a matter I have promised the medical aid societies to conduct more comprehensive discussions with them directly. But apart from those two aspects, there was overwhelming support to the proposed amendments.”
Specific areas for the pension sector include enhancing protection of policy holders, rights of policy holders, allowing offshore investments by pension funds and insurance companies, and IPEC’s improved oversight on pension funds, among others.