eBusiness Weekly
Business Writer
Insurance firms and pension firms have been advised to start preparations for compensating policyholders and pensioners who were heavily shortchanged during the conversion of their benefits at dollarisation in 2009, Business Weekly can reveal.
According to the industry regulator, the Insurance and Pension Commission (IPEC), significant progress has been made and compensation regulations will be gazetted soon.
“To ease the pressure of work associated with implementing the regulations once gazetted, insurers and pension funds are urged to start preparation and computations based on the draft regulation,” IPEC said in a circular to stakeholders.
“This will aid to the smooth implementation process and adherence to timelines proposed in the draft.”
The Government commissioned an investigation in 2015 into how pensions and insurance benefits were paid out following a big outcry from pensioners and policy holders.
Pension fund values were badly eroded in values due to devastating hyperinflation, which soared to a record 500 billion percent in 2008 according to the IMF.
The government wiped out the hyperinflation figures in 2009 when it abandoned the use of the Zimbabwe dollar for a basket of foreign currencies, but mostly dominated by the U.S. dollar, leading to what is now generally called dollarisation.
The commission of inquiry, chaired by Retired Justice Smith confirmed a “huge” loss of value to policyholders and pensioners and recommended compensation for the loss suffered.
It established that while policyholders lost value during the conversion period, they had also lost value throughout the investigation period between 1996 and 2014.
Thousands of insurance policyholders and pensioners have been hoping and holding out for additional pay-outs after receiving insignificant amounts as low as US$0,08c after several years of working. Some of them got zero values owing to lack of benefit inflation-indexation and currency de-basing. The loss of value has left many people, after years of hard work, poor and have been expecting a compensation.
