- May 3, 2018
- Posted by: Cyberplex
- Category: Local News
Tinashe Makichi Business Reporter
The Insurance and Pension Commission (IPEC) has ordered all insurers, brokers and intermediaries to immediately stop using “unregistered” touts for marketing and selling insurance policies, especially motor insurance.
The directive by IPEC will hit insurers who have been reaping huge from the practice of using unregistered agents.
Under Circular 7 of 2017, the Commission said any insurance player or unregistered person who undertakes insurance touting shall be guilty of an offence and shall be liable to a fine under the Insurance Act.
IPEC Commissioner Tendai Karonga said the order was meant to protect the industry in terms of Section 6(c) of the Insurance Act Chapter 24:07 prescribing standards for the insurance business.
“It has come to our attention that insurance touts harass members of the public visiting these premises.
“The Commission had to engage in various activities to combat insurance touting such as enlisting the services of the Zimbabwe Republic Police and facilitation of the computerisation of insurance cover notes,” said Mr Karonga in the Circular.
“Insurance touting poses serious reputational risk to the industry and in some cases the insuring public has been offered fraudulent cover notes exposing the public to loss of both assets and premiums paid,” he said.
Mr Karonga said IPEC’s blitz would not benefit the commission financially but the general economy.
Industry analysts say Government is losing about $5 million annually to vehicle insurance scammers preying on two thirds of the country’s private and public passenger vehicles.
As a result, a mere one third of Zimbabwe’s half a million vehicle population has genuine insurance cover. Allegations say there are well orchestrated insurance rings duping motorists as well as starving the national coffers of much-needed revenue.
It is alleged that most insurance touts and fraudsters work closely with some insurance companies, by using parallel systems and counterfeit insurance cover notes that are not captured by the companies.
The directive by IPEC will protect duly registered insurance players from unfair competition brought by these unscrupulous elements fleecing unsuspecting members of the public