Call to punish non-compliant insurance firms

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GOVERNMENT should close all bogus insurance companies that are not registered with the regulator and short-changing clients by not paying claims, an insurance executive has said.
Takura Dzimwasha, the chief executive of Glenrand, a short-term insurance firm in Zimbabwe, told The Financial Gazette that the closure of non- complaint insurance players would allow the industry to grow through rising confidence.
“We urge government, through the Insurance and Pensions Commission (IPEC), to be more vigorous in flushing out bogus insurance companies and those that are short-changing the insuring public by not paying claims. Furthermore, IPEC should regulate and bring sanity to rampant price competition and undercutting which is to the detriment of the insuring public in the long run,” he said.
Dzimwasha noted that the insurance regulator should also be tougher with companies that take long to meet the minimum capital requirements as this hinders growth of the industry.
“The Insurance Commissioner, through IPEC, has come up with absolute capitalisation minimums which a few companies are struggling to meet. Companies have been given more than enough time to meet the minimum requirements and those that demonstrate non-compliance will be forced to close shop. We believe it is in the best interests of the insuring public to have solid underwriters. We urge IPEC to be more vigorous in monitoring compliance in this regard,” he said.
With clients now more critical when it comes to deciding whom to deal with, insurance companies should be compliant with, underwriters having the capacity to pay out claims, Dzimwasha said and added that firms should also have a healthy balance sheet sizes to support good reinsurance programmes.
“There are a few very solid underwriters in the market who have grown their balance sheets in recent years and are very capable of settling claims whenever they arise, he said.
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