Public hearings on IPEC Bill commence

Source: The Herald – Breaking news.

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 Dr Grace Muradzikwa

Business Reporter

THE Parliamentary Portfolio Committee on Budget, Finance, and Investment Promotion commenced public hearings on the IPEC Bill in Gweru, which seeks to tighten supervision, enhance governance, and most importantly, puts consumer protection at the heart of the sector’s regulatory framework.

The committee will visit several areas this week, including Bulawayo, Masvingo, Mutare, Harare and Bindura.

Parliamentarians are required to gather views from members of the public through public hearings.

Expectations are high that the IPEC Bill will be passed into law this year.

Unpacking the Bill in Parliament on behalf of Finance, Economic Development and Investment Promotion permanent secretary Mr George Guvamatanga, Insurance and Pensions Commission (IPEC) Commissioner, Dr Grace Muradzikwa last week said:

“The IPEC Bill has been protracted since 2014 when the principles were approved by Cabinet.

“We are confident that this August House will ensure promulgation of the Bill into law.”

New amendments into the IPEC Bill are expected to broaden the scope and enhance the capacities of IPEC, with the country’s medical aid societies set to fall under its regulatory supervision for the first time.

Despite offering insurance services, local medical aid societies have not been regulated by the sector regulator, leaving them to operate with little oversight and no real accountability.

This is about to change.

Thanks to sweeping amendments in the IPEC Bill, the Commission will now regulate medical aid societies, closing a loophole that has allowed them to function with almost no financial scrutiny.

Medical aid societies are regulated by the Ministry of Health and Child Care, to the extent that the Ministry registers them.

However, there are concerns over effective prudential and market conduct supervision.

There have been numerous complaints by members of the public who would have religiously paid premiums, only to find their claims rejected, their benefits slashed, or their provider on the brink of financial collapse.

Speaking during the Bill’s unpacking in Parliament last week, Government Chief Whip, Pupurai Togarepi said: “There are people who believe that if IPEC regulates the funds, they are also regulating the medical practitioners, no!.

“Those can remain under the Ministry of Health and Child Care and any other associations that deal with medical practitioners.

“But, the fund must be safe for the people to trust it because this is a promise. Medical aid is basic insurance and it can not operate outside regulation.

“It is very important that Parliament, in this debate, ensure that medical aid societies, especially the fund part, are regulated to protect the unsuspecting members of the public who contribute.”

Unpacking the new amendments in Parliament last week, IPEC director of corporate services Ms Samantha Nhende said “The Bill introduces regulation of medical aid societies by IPEC. Entities will now be registered, supervised and monitored.

“Entities will be expected to maintain set standards in line with the Insurance Act.”

IPEC will have the power to supervise, monitor and take corrective action where necessary, bringing much-needed stability and fairness to a sector that millions rely on for healthcare.

The regulatory gap had led to what policymakers call “regulatory arbitrage”, where medical aid societies function as insurers in name while avoiding the oversight that comes with being one.

This loophole has not previously allowed financial mismanagement, but has also left members exposed to opaque pricing, unfair claim rejections and sudden collapses of medical aid schemes.

National Age Network of Zimbabwe director Mr Marck Chikanza told Parliament that the regulation of medical aid societies will also address the concerns of older persons.

“This ensures that older persons, who are more likely to need consistent healthcare services, will have better protections in case of insolvencies or inadequate coverage by these societies,” he said.

The Justice Smith Commission of Inquiry into the insurance sector had previously flagged this issue, noting that self-regulation had led to a lack of transparency and accountability.

Beyond the regulation of medical aid societies, the IPEC Bill introduces several major reforms designed to strengthen oversight, improve governance, and protect policyholders.

Some of the major reforms include enhanced investigative powers, stricter governance structures and the introduction of the Policyholder Protection Fund.

The regulator will now have explicit authority to conduct investigations into any registered insurance or pension entity. Previously, such probes required direction from the Minister of Finance, Economic Development and Investment Promotion.

The new powers allow IPEC to proactively detect and prevent violations, tightening supervision across the industry.

The amendments have also expanded the IPEC Board to a minimum of seven and a maximum of 10 members, ensuring a wider range of expertise.

And the Policyholder Protection Fund will compensate policyholders and pensioners if an insurer or pension fund collapses.

IPEC director pensions and life supervision Mr Cuthbert Munjoma the Fund will offer “consumer protection against institutional failure.”

He added that every insurer, pensions, provident or retirement annuity fund will be required to pay contributions to the fund.