‘Greedy’ insurance companies yet to pay back US$5,86 billion to Zimbabweans

‘Greedy’ insurance companies like Old Mutual and First Mutual are yet to pay back US$5,86 billion they took from Zimbabweans due to weak regulatory framework by the Insurance Pension Commission of Zimbabwe (IPEC) and inflation over ten years ago.

This was revealed by Former Finance Minister Tendai Biti in Parliament on Tuesday.

He cited the Justice Smith Commission of Inquiry of March 2007 which recommended that insurance companies needed to compensate Zimbabweans for the US$5,86 billion which they had illegally converted for their benefit.

“My point of national interest relates to pensions. As you know, in March of 2007, the Justice Smith Commission of Inquiry into conversion of people’s pension funds presented its report.

“That report made several recommendations after finding that Zimbabweans had lost pensions to the total value of USD5.86 billion as a result of a weak regulatory framework by IPEC, the Insurance Pension Commission of Zimbabwe, the scandalous and greedy behaviour of insurance houses and terrible macro-economic environment, including inflation that had risen to 500 billion percent,” Biti said.

“So effectively, Justice Smith recommended that there be compensation for pensioners, teachers, headmasters and workers who had worked from 1980 and served through their pensions but their pensions were wiped out.

“Six/Seven years later, those recommendations have not been put into practice. There is also a second group of pensioners. These are people who saved their money from 2009 when the economy had dollarized, pay their pensions in USD, but suddenly after February of 2019, with the enactment of Statutory Instrument 33 of 2019, greedy pension houses like Old Mutual and First Mutual are now paying those pensioners in paltry ZW$.”

The Harare East legislator urged Finance Minister Mthuli Ncube to come up with a law that puts into effect the Justice Smith Commission of Inquiry recommendations.

“So, I make the point that the Minister of Finance and Economic Development must, as a matter of urgency, come up with a law that puts into effect the Justice Smith Commission of Inquiry recommendations and secondly, that same law must deal with the pensioners who have lost their USD savings, those who started making pension contributions from 2009 in USD including Hon. Members of this august House,” he added.

In response, Speaker of Parliament Jacob Mudenda advised Biti to bring the issue to Parliament for MPs to debate.

“Thank you Hon. Biti. You have raised a very important issue but I encourage you to bring a motion to this House concerning that issue so that Hon. Members will debate and adopt the motion,” Mudenda said.