Insurance policyholders and pensioners who fall prey to unscrupulous businesses have legal recourse by invoking relevant provisions of the recently gazette Consumer Protection Act, an industry expert has said.
The local pensions and insurance industry has for years been blighted by incidents of unfair consumer practices.
Some of these dodgy practices include - but are not limited to unjustified delays in settling valid claims, high penalties for policy terminations, misleading marketing claims, late payments of pension benefits and delays in the settlement of claims.
Further, malpractices entail exorbitant administration fees that erode members' retirement benefits, unjustified repudiation of claims, and design and sale of inappropriate products and services (for example, funeral policies that do not mature).
Zimbabwe has for a long time suffered from the challenge of anemic consumer bodies, but the new consumer law makes provision for enforcement of consumer rights in addition to recourse to the courts of law, both civil and criminal.
Consumer Council Mashonaland regional manager Tare Moyo told an engagement with players in the industry that consumers that feel mistreated or cheated could approach the Consumer Protection Commission or the courts.
"(The law) allows for the consumer to approach the Commission designated consumer protection organisation or court in the case of infringement of rights. It also allows court to enforce consumer rights, and the court may permit consumer advocacy bodies to enter and search any premises in terms of Section 74," she said.
Ms Moyo however added that players in the sector still had leeway to improve their offering to ensure that they meet consumer standards.
"The Consumer Protection Act came into operation in December 2019. In the meantime, suppliers such as insurers and pension service providers have an opportunity to re-draft their agreements to align their operations with the provisions of the Act and to offer the required service to the consumers," she said.
Outside the Consumer Protection Act, the Insurance and Pensions Commission (IPEC) has in recent years come up with several initiatives to enhance consumer protection in the sector.
These include the Treating Customers Fairly Framework (which came into effect last month), the establishment of a Complaints Handling Unit and an increased focus on market conduct supervision.
With regards to the new framework, starting with their third quarter (2021) returns regulated entities are expected to report on requirements such as the number of claims received, the number of admitted claims, turnaround times in claims settlement, the number of repudiated claims and the reasons thereof.
IPEC Commissioner Dr Grace Muradzikwa said the better treatment of consumers in the sector might help restore lost public trust.
"Fair treatment of consumers is key in restoring confidence in the insurance and pension sector," she said.
"As we are all aware the industry is currently grappling with low confidence owing to legacy issues and it is our duty to undo that by the way we treat policyholders and pension scheme members."
The sentiments were reiterated by Consumer Protection Commission Commissioner Mrs Rose Mpofu.
She said: "Adopting good practices on consumer protection will positively influence the insurance and pensions services sector as this is consistent with the regulator's overall objective of promoting the general stability of the insurance and pensions industry."