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Zimbabwe: Court Nullifies Insurance Brokers Regulations
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Financial Gazette (Harare)
16 May 2008
Posted to the web 16 May 2008
Harare
THE Supreme Court this week nullified government regulations that threatened registered insurance brokers with a ban if they did not comply with a directive to re-register.
The government issued the directive through a statutory instrument, but the highest court in the land on Tuesday said the Ministry of Finance had exceeded its powers in making the new demands.
In 2005, the government announced that registered insurance brokers were required to re-register to enable it to monitor their solvency and ensure the correct maintenance of principles and practices in the industry.
It said re-registration "was the only avenue to take stock" of the industry and those who did not comply would be deemed unregistered.
The government's move resulted in Trust Insurance Brokers going to court.
Finance Minister Samuel Mumbengegwi was cited as the respondent.
The government fought the case in court, saying it had unfettered powers to " prescribe anything that is necessary to be prescribed".
The government initially won the case in the High Court, prompting the aggrieved party to seek recourse in the Supreme Court.
In Tuesday's judgment, the Supreme Court said the government regulations were in violation of the Insurance Act.
In deciding on the matter, the court said what was at stake was whether or not the law allowed for the minister to issue a statutory instrument directing registered insurance companies to re-register or face de-registration.
"Parliament did not intend to grant power to the minister to alter the requirements for registration and de-registration of insurance brokers by setting additional qualifications for registration as well as requiring registered brokers to re-register on pain of de-registration. The minister exceeded the power granted to him.
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"Section 14 of the regulation is ultra vires Section 89 of the Insurance Act and is accordingly void and of no force or effect," reads part of the judgment.
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