INSURANCE experts have raised concerns over the proposed Insurance and Pensions Commission (Ipec) Bill, arguing that its provisions could lead to increased healthcare costs and operational challenges for medical aid societies.
Gazetted last month, the Bill seeks to bring medical aid societies under Ipec’s oversight, a move that would shift their regulation from the Ministry of Health and Child Care.
It also establishes a policyholder and pension protection fund, mandating medical aid societies to comply with new regulatory requirements.
Senior partner at Muvingi & Mugadza Legal Practitioners Nobert Phiri cautioned against over-regulation of medical aid societies, warning that it could undermine the sector’s efficiency and affordability.
“If you look at medical aid societies, they are voluntary in nature,” he told businessdigest in an interview.
“Over-regulating such an industry might lead to unintended effects that could harm the health sector by potentially increasing the cost of medical services.”
Phiri also criticised the proposed asset register, which grants Ipec authority over asset disposals.
“The introduction of a policyholder fund is meant to support the ordinary citizen, but the funding structure could mean that these costs are passed back to the citizens through insurance and medical aid companies,” he said.
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Phiri questioned the composition of the fund’s board, which includes ministerial appointees, suggesting the need for greater scrutiny over its financial framework.
“Medical aid schemes play a significant role in our industry. Introducing new expenses and regulations will inevitably increase the cost of business, which in turn affects ordinary citizens,” he said.
Phiri emphasised the need for a thorough review of the Bill to avoid overburdening citizens with additional healthcare costs.
“The Ipec Bill has far-reaching impacts for both citizens and the industry,” he said.
“Positive changes include governance reforms, increasing board members from seven to nine, which should enhance Ipec’s governance. Also, international cooperation is welcome, as it would benefit the industry and the public.”
Zimbabwe Association of Pension Funds director general Sandra Musevenzo said the Bill was likely to increase the cost of doing business with pension funds due to additional guidelines for managing expenses.
“We are concerned about what this means for contribution rates and how it will impact our expenses, especially when we aim to protect pensioners,” she said.
Musevenzo highlighted significant changes such as a new asset register, where Ipec will record assets owned by pension funds, excluding shares.
She raised concerns about potential delays in asset disposal, which could affect liquidity and timely payments to pension fund members.
“However, commendable changes include governance enhancements and term limits for board members,” Musevenzo added.
Attempts to get a comment from Ipec on the Bill were unsuccessful.
