Finance Minister Mthuli Ncube has increased the minimum capital requirements for insurance entities to 15 times of previous levels to ensure that insurers are well-capitalised to protect value for policyholders and pension members.
Mr Ncube said in a Budget presentation in mid-November that the new minimum capital requirements are:
- for life assurance and reinsurance companies - raised to $75m from $5m;
- for short-term and funeral insurance companies - raised to $37.5m from $2.5m; and
- for microinsurance companies - raised to $4.5m from $0.3m.
The changes took effect on 15 November 2019.
Meanwhile, the Insurance and Pensions Commission (IPEC) is developing a risk-based capital framework called the Zimbabwe Integrated Capital and Risk Project (Zicarp), which will be launched in 2020.
The move is part of wide-ranging initiatives aimed at improving the conduct of business in the industry under a reform drive called “Treating Customer Fairly and Market Disclosure Framework”.
Currently, lack of confidence continues to hinder the country’s insurance and pensions industry following the erosion of policyholder accounts due to the conversion from Zimbabwean dollar to the US dollar during the February 2009 period.