eBusiness Weekly
HARARE – The Insurance and Pensions Commission (IPEC) on Tuesday warned consumers to be wary of bogus life assurers who are taking premiums from unsuspecting members of the public.
Life assurers are generally insurance companies that provide cover to clients and pay out an agreed sum of money in the event of death of the insured person.
Zimbabwean law requires life assurers to be registered with IPEC, the insurance sector regulatory authority and only 20 companies are registered so far.
IPEC said a practise was creeping, particularly in the southern parts of the country, where some companies that were meant to provide funeral services only, claimed to be life assurers, illegally collecting premiums from unsuspecting members of the public.
“Funeral service companies do not issue life assurance policies,” said IPEC pension manager, Nhau Chivingira at a training for journalists on insurance matters.
The funeral services based model revolves around provision of non-monetary benefits mainly in form of goods and services such as coffins, transport, tents, mortuary, hearse, grocery and others.
In Zimbabwe, life assurers such as Doves and Nyaradzo have either diversified or have partnered with some funeral service providers.
IPEC spokesperson Lloyd Gumbo, said most people only realize later that they were taken for a ride when they face challenges in accessing benefits in times of need.
He said the regulator had attended to a number of cases in which the public was duped by fake life assurers who either disappeared when a service was needed or failed to provide it.
“People come to complain after facing problems but we really cannot help them if the firms are nor registered,” he said.
“We have had to engage law enforcement agents to deal with the cases.”
Gumbo said the practice, which was “imported” from South Africa, was rampant in the southern parts of Zimbabwe.
The life assurance sector is the most subscribed type of insurance in Zimbabwe as it is not only the cheapest but also generally based on the need to be able to have a decent funeral. – New Ziana
