THE Zimbabwe Association of Pension Fund (ZAPF) has expressed concern over the pending passage of the Insurance and Pensions Commission Bill saying it could significantly impact the industry.
The Bill proposes that medical aid be regulated under Ipec, potentially increasing the cost of living.
During a ZAPF training programme themed Navigating the New Regulatory Landscape: Key Implications of the Ipec Amendment Bill, 2024 for Pension Funds, industry experts said the Bill’s suggestion to register medical aid societies under Ipec’s Wealth Fund could lead to higher medical payment costs, directly affecting consumers.
Senior partner at Muvingi & Mugadza Legal Practitioners, Nobert Phiri, argued against over-regulating medical aid, adding that it could derail its intended purpose and inflate living costs.
“Already, we are on the wrong path. It’s not medical insurance,” he said.
“If you ask me, the medical aid societies should clarify that this is not insurance because where this is heading, it will lead to requirements like capital adequacy and financial soundness.
“That automatically increases the cost of business, which in turn raises medical aid costs immediately.”
Phiri said over-regulation of voluntary associations like medical aid societies might lead to their collapse.
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“Imagine setting a minimum capitalisation threshold, say one dollar, for all medical aids. Any medical aid would be technically insolvent the moment that requirement is enforced,” he said.
Phiri also described the Bill as ambiguous on several fronts and urged experts to seek clarity on its implications.
“When you look at medical aid societies, you must consider the existing regulatory framework, which falls under the Health ministry via the Medical Services Act.
“Sections 9 and 10 of this Act deal with the regulation of medical aid societies, which are voluntary by nature. The aim is to encourage medical aid societies to contribute to the national health economy with minimal regulation,” Phiri said.
Regina Mabwe from the Advocates Chambers emphasised the importance of stakeholder involvement in the legislative process.
“As businesses, understanding our role in law-making is crucial because legislation like this Bill impacts us, our clients and the public at large,” she said.
“However, there is a general reluctance to engage in law-making because it’s often seen as political.
“It’s vital for us to participate, not only by engaging with lawmakers, but also by understanding and representing our clients’ needs regarding how the Bill should be shaped.”
