HARARE, November 30 (The Source) – Government has raised the minimum capital requirements for short-term insurers and life assures, with the newly appointed Insurance and Pensions Commission (IPEC) board expected to enforce them during the first quarter next year, finance minister Patrick Chinamasa said on Monday.
Presenting the 2016 budget last week Chinamasa announced that government increased minimum capital requirements for short-term insurers from $1,5 million to $2,5 million and that of life assurers from $2 million to $5 million while funeral assurers will now be required to have a minimum of $2,5 million from $1,5 million.
“Given the dynamic nature of the financial services sector and the need for adequate capital that is commensurate with risks involved as well as assumed in the insurance business, the IPEC Board is expected to implement proposed minimum capital requirements for short term and life insurers, as well as review the qualifying assets for minimum capital requirements to improve asset quality in the first quarter of 2016,” Chinamasa told journalists on Monday while introducing the new IPEC board.
The board will be chaired by former chief executive of the collapsed AfrAsia Holdings Zimbabwe Lynn Mukonoweshuro who will be deputized by economist George Mazhunde.
Other board members include academics Abednico Dube and Tafadzwa Zinyoro as well as Anna Mashingaidze who has a background in finance.
The performance of Zimbabwe’s insurance and pension sector has largely remained depressed owing to low economic activity, legacy issues emanating from the conversion of insurance and pension policies from the inflation ravaged local currency to US dollar values and liquidity challenges among others.