IPEC TARGETS INFORMAL SECTOR:
GOVERNMENT has gazetted two Statutory Instruments allowing IPEC to register microinsurance companies and effectively peg their minimum capital at $300 000 while setting levels of fees and levies for the sector.
This has been done through amendments to the Insurance Regulations and the IPEC Act and comes years after Zimbabwe started working on a framework to regulate and formalise operations of micro-insurers, targeting low income earners.
The instruments, cited as the Insurance (Amendment) Regulations and Insurance and Pension Commission (Levy) Regulations also sets levels of registration fees and levies.
“According to the Insurance and pension Commission (Levy) Regulations (SI40⁄2018), the Minister of Finance and Economic Development has in terms of section 33 of the IPEC Act made amendments to the IPEC (levy) Regulations of 2016 by inserting provisions to the effect that micro insurance companies pay a fixed levy of $300 000 per company quarterly plus a rate of 0,005 by estimated net written premiums for the quarter. Provided that where an insurer, in addition to micro insurance business, carries on any other insurance business, paragraphs (a) to (m) shall be applied in the calculation of the levy in respect of those other insurance businesses, “reads part of the SI.
Last year, IPEC said micro insurance is expected to drive the sector.
According to IPEC, micro insurance is seen driving the country’s insurance penetration rate from 3,6 percent in 2017 to about 20 percent by end of 2019.
The insurance regulator last year launched a framework for micro insurance whose target is to provide insurance to the low income bracket of the economy through affordable premiums.
Micro insurance is also critical at a time the country’s economy has informalised.
A 2014 Finscope survey found that 70 percent of Zimbabwe’s adult population was uninsured.
IPEC is also reportedly negotiating with industry players and Government to develop a framework to regulate the medical aid insurance industry whose estimated value is around $340,2 million.
Debate over the regulation of the medical aid industry has been raging since the Ministry of Health and Child Care tabled a motion before Parliament seeking to set up a regulatory body, which would operate under the ministry and be regulated by it.