First Mutual proposes to compensate Ecolife policyholders

First Mutual Life has  submitted a  proposal  to the Insurance and Pensions  Commission (Ipec) as part of its plans to  compensate  policyholders who  had  subscribed   to  the now defunct life assurance cover scheme, Ecolife.

Report by Gamma Mudarikiri

Ipec head of prudential supervision Pupurai Togarepi  told businessdigest  that following the intervention of the regulator, First  Mutual Life  submitted a proposal  to  compensate policyholders of Ecolife , who  were dumped after Econet  pulled out of the scheme.

Econet Wireless entered into a partnership with First Mutual Life and Namibia-based Trust Co in 2010 to give life assurance services to Econet subscribers but this was terminated early this year, leaving a million policy holders stuck. The matter is now before the courts.

In the partnership, Trust Co provided a software platform for the delivery of messages on life cover status for subscribers; Econet was the agent while First Mutual was the insurer.

Togarepi said the termination of the life assurance policy was unfair to policyholders, forcing the regulator to act to protect customers.  Thus Ipec engaged First Mutual Life to come up with measures to settle the matter.

Ipec was still looking at the submitted proposal by First Mutual Life, said Togarepi. He however would not be drawn to disclose full details of the plan.

Commenting on the  recently-proposed hike  of  minimum capital requirements for the life assurance to US$7 million, Togarepi  said the  new levels were still  low compared  to  other  countries in the region which were on average pegged at US$7 million.
Ipec recently proposed to increase minimum capital requirements for the life entire insurance industry.

Insurance Institute  of  Zimbabwe(IIZ) former president Simon Chapereka  said the new levels would strengthen the insurance sector and allow underwriting of more business.

The industry was in negotiations with Ipec over simplification of financial reporting in insurance companies as current International Financial Reporting Standards (IFRS) were complicated for the public to understand, Chapereka said.

Ipec early this year blamed players for limited disclosure on core financial statements and notes, saying this compromised transparency.

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