THE Insurance and Pensions Commission (Ipec) has suspended Heritage Life Limited from writing new business after onsite inspections revealed significant compliance and governance deficiencies, NewsDay Business can reveal.
The suspension, which is with immediate effect, saw Ipec issuing a corrective order to Heritage Life.
“The Insurance and Pensions Commission advises the public that it has suspended Heritage Life Limited from writing new business with immediate effect,” the notice reads in part.
“The decision was arrived at after Ipec conducted an onsite inspection on the entity in terms of section 6(b) of the Insurance Act [Chapter 24:7], which empowers Ipec to supervise the activities of registered insurers with the objective of ensuring the protection of policyholders.
“The inspection revealed compliance and governance deficiencies, leading Ipec to issue a corrective order to Heritage Life Limited. To ensure existing policyholders are not prejudiced during this period, the company is allowed to continue managing existing businesses so that current policyholders continue to receive services.”
The regulator said it would continue monitoring the implementation of the corrective order by Heritage to ensure that the identified deficiencies are resolved to protect policyholders.
This is not the first time Ipec has suspended an insurance entity for compliance and governance deficiencies.
It also suspended Sunset Funeral Assurance Company last year.
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The regulator says its goal in 2024 is to deal with governance issues.
In an interview on the sidelines of the Insurance Institute of Zimbabwe annual conference late last year, Ipec actuarial director Robson Mtangadura told NewsDay Business that 50% of the challenges could be fixed if governance issues were managed well.
“What we are doing as Ipec is we have realised that some of the problems do not need to be addressed at the tail end,” he said.
“You need to go back to the source and try to appreciate or to understand this problem that we are facing, how are they emanating and where and then go to the source and address them.
“That’s why we are flagging this and we are even advising the market to say properly solving this problem will help us in terms of addressing 50% of the challenges that we are facing in our market.”
He added: “So 2024, our focus is to deal with the issues of governance. I think we are going to be as aggressive as possible.
“Again, as you know that the market is always ahead of the regulator, we have also tried to invest in terms of possibly not lagging by so much in terms of what the market is doing so that we continue to close the gaps and loopholes that may be existing in our regulation so that the market will not exploit it to their advantage.”
Mtangadura said on governance, the regulator was looking at independence and how the boards are constituted.
“If you put together people who are conflicted, it’s difficult for them to make decisions that are sound and in the best interest of other stakeholders. They tend to serve, possibly, the master at the expense of other important stakeholders, such as pension fund members or policyholders,” he said.
“From a pension fund point of view, we are saying we need adequate representation in the board of trustees so that proper decisions are made in terms of investing and managing policyholders, pension fund members’ funds.
“Same applies in insurance companies. We also do not want a situation whereby a chief executive officer will nominate his or her friends to the board of the company and then start to control that individual with a remote control.
“What we want is for those companies to have what they call nomination committees and the process must be done in a fair and transparent way.”
Ipec’s view is that once there are people of integrity and professionalism in the boards, the decisions made will ensure they balance the interest of all stakeholders.
