The Insurance and Pensions Commission (IPEC) has directed all insurance companies to timely settle claims after an increasing number of policyholders sought the Commissioner's intervention due to protracted claims settlement.
Ipec, in a circular, said the situation necessitated urgent attention and action from all insurers.
"In view of the foregoing, from the date of receipt of all the required submissions, a decision shall be made and communicated to the policyholder. Further, once the claims authorisation process has been finalised, the claim shall be settled within three working days," said Dr Grace Muradzikwa, the IPEC Commissioner, in a circular.
She said that while the commission was aware that additional investigations may be required in claims involving complex circumstances and claims recoveries from other insurers or reinsurers, insurers were advised to inform policyholders of potential delays and to provide lean explanations for the extended processing time.
"To meet the above, there is a need for insurers to review claims processes by streamlining and optimising claims handling procedures," the Ipec commissioner said.
Ipec said failure to adhere to the directive attracted a level 4 penalty for each day the insurer is in default in terms of Section 5 of the Insurance and Pensions (Issuance of General Guidelines and Standards) Regulations 2020.
"Furthermore, each insurer is required to maintain a complaints register, clearly indicating the name of the complainant, date of receipt, nature of the complaint, and date of resolution."
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According to Ipec, timely settlement is critical, as this directly impacts policyholder satisfaction, market penetration, and confidence in the insurance sector.
In another circular, Ipec also expects insurers to conduct thorough evaluations and process claims promptly while ensuring the clarity and transparency of their claims after noting inadequate disclosures in actuarial reports submitted as part of the 2009 compensation schemes.
Ipec said the inadequate disclosures were inhibiting the commission from making an informed decision on the compensation schemes.
"Following the submission of 2009 compensation schemes as required in terms of Statutory Instrument 162 of 2023, we have noted instances where the disclosures in the actuarial reports are not adequate to enable the Commission to make an informed decision on the compensation schemes.
"It is against this background that the commission requires that resubmissions or outstanding submissions make sufficient disclosures in the actuarial report as outlined in the Actuarial Society of Zimbabwe (ASZ) Guidance Note on S1 162 of 2023, released on January 25, 2024," Dr Muradzikwa said.
In October 2023, the government published Statutory Instrument 162 of 2023 (SI162,2023), which focused on pensions and provident funds' compensation for the loss of the pre-2009 value of pension benefits.
The implementation of this Statutory Instrument proposed that Actuaries, who are mostly members of the Actuarial Society of Zimbabwe, assist in its implementation.
