GOVERNMENT has more than doubled registration fees and levies for insurance companies and pension funds as treasury seeks to widen its revenue inflows.
By Bernard Mpofu
According to a new statutory instrument, insurance firms such as short term insurance companies, life assurance firms, insurance brokers and reinsurance companies are now required to pay a total of US$5 500 registration and application fees to the regulator, the Insurance and Pension Commission (IPEC).
The companies are now also required to pay varying levies towards the Insurance and Pension Levy.
“It is hereby notified that the Minister of Finance and Economic Development, in terms of section 89 of the Insurance Act [Chapter 24:07], has made the following regulations:,” reads Statutory Instrument 23 of 2016.
“Registration fee of an insurer carrying on life insurance business — application US$500, registration fee US$5 000.”
IPEC head of supervision Pupurai Togarepi said the insurance regulator had consulted widely with the players, adding the fees were still far much lower than most regional peers.
“The new fees will not affect any operations of companies. The regulator consulted widely with all players and the fees remain lower than those in other jurisdictions,” he said.
This development comes at a time some players have been deregistered due to weak capital positions. Experts say the performance of the 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 Zimbabwe dollar to US dollar values and liquidity challenges, among others.
Total gross premiums written increased by 11,6%, from US$264 million to US$295 million for the first six months ending June 30 2015 compared with the same period in 2014.
In 2013, IPEC doubled the minimum capital requirements for the sector, with short-term insurers required to achieve a minimum capital level of US$1,5 million and life assurers having to put up US$2 million.
Meanwhile, Finance minister Patrick Chinamasa has already hinted on plans to increase the minimum capital requirements for the sector by December this year to improve the underwriting capacity of firms.
“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 insurance business, I propose an upward review of minimum capital requirements for short term and life insurers by December 31 2016,” Chinamasa said in his 2016 National Budget.
“In addition, the Insurance and Pensions Commission (IPEC) will, in the first quarter of 2016, be reviewing the qualifying assets for minimum capital requirements to improve asset quality.”