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.