BY MELODY CHIKONO THE Insurance and Pensions Commission (Ipec) has warned that it risks running into a regulatory limbo as a result of Parliament’s continued delays in passing of Bills.
The delays, some of which have stretched for nearly 10 years, have resulted in the commission regulating the market through guidelines and circulars.
The insurance regulator has issued in excess of 44 circulars and guidelines per year as it tries to curb mischief on the market in the absence of a concrete regulatory framework.
Ipec commissioner Grace Muradzikwa told NewsDay Business on the sidelines of the commission’s annual general meeting last week that the snail’s pace at which Bills that enable Ipec to regulate the sector are going through Parliament has severely curtailed the commission’s ability to carry out its mandate.
She said principles of these Bills were approved in 2012 which were then considered by Cabinet at the end of the lifespan of the government of national unity in 2013. They took almost five years at the drafting stage at the Attorney-General’s Office because of capacity constraints, among other challenges.
The Pension Providence Bill went to Parliament for the first reading in 2019, only to be passed in 2022.
Muradzikwa added that Ipec and the Insurance Bill went to Parliament in February this year and are currently still stuck at the committee stage.
In essence, she said, Ipec has been putting stop-gap measures that are fragmented while the ideal situation was to have legislation that will ensure that it effectively regulates the sector.
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“We get our powers from Bills. So when the Bills are not going through Parliament, it limits our powers to carry out our mandate. All these delays have been affecting the commission. If you go back to the Justice Smith report you remember that the commission highlighted that Ipec did not have regulatory powers. That is when this whole process of reviewing the Bills then started,” she said.
“You can imagine since 2012 up to now the Bills are going through, but nothing has happened. The market is complaining of circulars and guidelines, 44 circulars in a year and last year we issued a similar number. But what can we do? We can’t just sit and wait for Bills that have been going through Parliament since 2012. So we have been using circulars and guidelines to regulate the market and basically if you look at one of the issues it’s about contribution arrears where you see that employers are taking money from the people, but are not remitting to the pension funds.”
Muradzikwa said the commission was seeking authority to garnish the funds of employers taking money from employees, but failing to remit to the pension funds.
The sector is presently sitting on more than $7 billion in contribution arrears which will be worthless by the time it is paid out.
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