The Insurance and Pensions Commission (IPEC) is in discussions with government, which could see the regulator extending its oversight to medical aid societies, currently being governed by the Ministry of Health and Child Care.
It has also emerged that the health ministry will soon introduce a new Medical Aid Regulatory Bill in Parliament to regulate medical aid societies.
IPEC says current legislation already allows it to regulate medical aid societies, although this has never been implemented because of divergent interpretations of the law.
Minister of Health and Child Care, David Parirenyatwa, told The Financial Gazette in an interview last week: "We have a completely separate medical aid regulatory bill to come before Parliament soon."
Zimbabwe's medical aid societies are currently registered by the Ministry of Health and Child Care but are presently not required to comply with mandatory capital requirements, like insurance companies.
This prompted IPEC to engage the ministries of Finance and Economic Development and Health and Child Care with the view to regulating the sector.
"IPEC has the capacity to regulate all insurance services in Zimbabwe, including medical aid societies. In fact, that's what the law says. It says we should regulate the country's medical aid societies," Tendai Karonga, a commissioner with IPEC, told The Financial Gazette on the sidelines of an insurance and pensions indaba held in the capital last week.
He added: "When IPEC was created through an Act of Parliament (Chapter 24:21), on Part 11 (4) (1), its functions and powers were cited as to register insurers, mutual insurance societies and insurance brokers in terms of the Insurance Act and subject to the Act, to regulate and monitor their business.
"From this legal provision, it is evident that IPEC has the legal standing to regulate medical aid societies who take up the risk of paying for medical bills from their members who pay premiums in return, which is what insurance is all about.
"Unfortunately, IPEC has not been able to regulate medical aid societies owing to some confusion about the situation.
"However, we are engaging authorities to explain our position that we are legally mandated and have the capacity to regulate medical aid societies for the benefit of policyholders, service providers and ensuring that the industry grows."
Some medical aid societies have been criticised for short changing members, who contribute premiums regularly.
They have been failing to make payments to health service providers, resulting in patients being asked to pay cash when seeking medical attention.
Last year, doctors threatened to stop accepting medical aid and demanded cash payments from patients. Government also threatened to cancel licences for medical aid societies who were failing to meet their obligations.
Finance and Economic Development Minister, Patrick Chinamasa could not be reached for comment by the time of going to print.
"IPEC's strict conditions in licensing of medical aid societies, just like insurers, will contribute to efficiency and stability in the medical aid sector," said Karonga.
"Our role as IPEC is to ensure that when insurance service providers are registered they comply with the minimum capital requirements compared to a situation where one just registers his or her medical aid society relying solely on members' contributions without his or her own capital in the business.
"We also insist on good corporate governance in the running of insurance companies, meaning that it will be difficult for those managing these insurance companies to misappropriate policyholders' contributions. Proper accounting, audit and prudential controls will be enforced. Furthermore, our prudential role is to ensure that our regulated entities meet their obligations such as compensating the loss that policyholders may suffer, which is covered by their policy."