Ipec orders insurance firms to stop issuing polices in forex

USD Dollars

By Fidelity Mhlanga

THE Insurance and Pensions Commission (Ipec) has directed insurance firms to discontinue issuing policies in foreign currency in line with Statutory Instrument 142 of 2019, which saw the re-introduction of the Zimbabwe dollar last week.

Government abolished the use of foreign currency in local transactions in a bid to curb black market demand and re-introduced the Zimbabwe dollar as the sole legal currency.

“Following the gazetting of SI 142 of 2019, which became effective on June 24, 2019, your members are being requested to do the following while the commission engages fiscal and
monetary authorities: To stop issuing new United States dollar or any foreign currency-denominated policies. To submit to the commission the current book of inforce policies, in
excel format, showing policy number, name of policy holder, date of commencement, premium, sum assured/insured, name of broker, term of policy and status,” Ipec commissioner Grace Muradzikwa said in a circular to insurance players.

Muradzikwa said insurance players must submit total premiums collected to date on the current book, total pending and outstanding claims, premium retention of the US$ or any foreign
currency-denominated premiums and where they are invested.

Insurance firms were tasked to submit nostro balances for US$ or foreign currency-denominated premium accounts as at June 24, 2019.

They were further directed to indicate the value of US$ or foreign currency denominated premiums that have not yet been remitted to risk carriers.

According to a recent Ipec report, direct life assurers reported net profit after-tax and before transfers to policyholder funds of $1,08 billion for the year-ended December 31, 2018,
an increase of 636,59% from an amount of $146,89 million reported for the year-ended December 31, 2017.

Gross premium written by direct life assurers grew 16,4% to $426,05 million in the last quarter of 2018 from $366 million the same period prior year.

Prescribed assets investments amounted to $321,70 million as at December 31, 2018, translating into an industry-prescribed asset ratio of 9,05%.