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Tuesday, 28th February, 2023

The National Assembly met at a Quarter-past Two o’clock p.m.


(THE HON. SPEAKER in the Chair)

*HON. CHIBAYA: Thank you Mr. Speaker. I rise on an issue of national interest pertaining to electricity. There is a lot of load shedding in the whole country from 05.00 am till 12 midnight whilst people are asleep.  This causes loss of business in industries and also affecting domestic use of electricity.  May the Minister of Energy and Power Development come to Parliament and issue a Ministerial Statement on what the Ministry is doing to ease this load shedding.

*HON. CHINOTIMBA:  I also rise on a matter of national importance concerning Members of Parliament’s (MPs) accommodation.  Yesterday MPs had to sleep in their vehicles because there was no accommodation at hotels.  Some MPs who arrived on Sunday were given accommodation but those who arrived on Monday did not get accommodation.  The hotel administration said an upfront payment should be made.  We enquired from our Chief Whips who said Parliament has said they cannot pay – Treasury said they want to pay a certain amount which is not what Parliament needs for hotel accommodation.  Up to this day, there are some MPs who do not have hotel accommodation and are still sleeping in their vehicles.  Maybe this is happening because we are coming to the end of our term – we do not understand.

We know you Mr. Speaker as someone who stands up for us even during budget time.  May you intervene with regards to accommodation or maybe arrange for virtual meetings or we close for some time until this is resolved.  We will only have a problem of connection since there is no electricity most of the time and electricity poles are falling – [HON. MEMBERS: Inaudible interjections.] – I saw a female MP who had nowhere to sleep and  one male MP had to give up his accommodation to her and he slept in his car.  We have to pass a lot of Bills and I do not think virtual is ideal.  May you please intervene with regards to this issue Mr. Speaker? – [HON. MEMBERS: Hear, hear.] –

          THE HON. SPEAKER: Thank you Hon. Chinotimba.  I was told by the Clerk of Parliament about the issue and he told me that he spoke to Mr. Guvamatanga, the Permanent Secretary.  I believe that Treasury is going to pay so that Hon. Members have accommodation. – [HON. CHINOTIMBA: Inaudible interjection.] – You have engaged me, so why not wait until the end of the day; this issue is going to be resolved this afternoon. 

          If there is a challenge, we are going to escalate the issue like what we did regarding the Delimitation Report.  We had a challenge like the one that we are facing and we engaged His Excellency the President.  His Excellency then gave an instruction that there should be payment of that money.  So we do not want to continue engaging His Excellency as if he is the Minister of Finance.  The budget is there, Parliament passed that budget, so the money should come to Parliament.  I thank you.

          *HON. TEKESHE:  My concern pertains to health issues, I accompanied two people who were sick to Nyanga and Rusape Government hospitals.  There are no wheelchairs, no stretcher beds and medicines.  I then took the sick to Bonda Mission Hospital and they were saying that they were overwhelmed by the whole of Manicaland Province. They asked why the sick were not going to Government Hospitals and I told them that they preferred mission hospitals because Government hospitals do not have medicines, equipment and even painkillers.

          As Members of Parliament, we end up paying to assist the people who are sick, yet they are supposed to be benefiting from Government. Government health provider, PSMI is not providing any service but people are contributing.

          Therefore, I request that the Minister gives us a Ministerial Statement.  Building hospitals without tools of trade such as scans, X-ray machines and medicines is not good enough. It is my request that something be done so that people get medication.  People are dying before their time, they are given prescriptions and go to pharmacies which require USD, of which many do not afford.

          Furthermore, as the Chief Whip, I am receiving complaints from Parliamentarians about their allowances and the issue of accommodation which has been alluded to by Hon. Chinotimba earlier on.  Mr. Speaker, may this issue of allowances be resolved and treated with urgency.

          +THE HON. SPEAKER: Hon. Tekeshe, I would advise that you ask those questions tomorrow during the Question Time session so that you get a response from the responsible Minister.

          HON. MOKONE: Thank you Mr. Speaker Sir.  I stand on a matter of national importance.  In my province Matabeleland South, there is a mine called Vubachikwe Gold Mine.  Last year the workers downed tools because of non-payment of salaries and this led to the closure of essential services like water and ZESA.

          The workers have not been receiving their salaries for the past seven months.  This means also that even the schoolchildren are not attending schools because everyone has now resorted to gold panning.

          Mr. Speaker Sir, may you allow the responsible Ministry to come to this House and tell us the measures they are taking to address the plight of these workers?  I thank you.

          THE HON. SPEAKER: Be guided that the issues to be raised must be so comprehensive that they are of national importance.  This is a specific issue and I would have suggested that you ask the Minister responsible tomorrow during the Question and Answer session.



          HON. R. R. NYATHI: I move that Orders of the Day, Numbers 1 to 6 on today’s Order Paper be stood over until Order of the Day, Number 7 has been disposed of.

          HON. T. MLISWA: I second.

          Motion put and agreed to.



Seventh Order read:  Resumption of Committee: Insurance and Pensions Commission Amendment Bill [H. B. 6, 2021].

          House in Committee.

          On Clause 2:

          HON. MUSHORIWA:  On a point of order Hon. Chairman.  I submitted some amendment to this Bill two weeks ago but I am not seeing them on the Order Paper.  I just want to find out how we are going to deal with it. I was made to believe by the Journals Office that they would be on today’s Order Paper.

          THE DEPUTY CHAIRPERSON (HON. MUTOMBA):  Hon. Mushoriwa, Clause 1 was actually dealt with on the day that the House adjourned and today it is continuation.  We are starting on Clause 2.  Were your amendments to the Hon. Minister relating to Clause 2 or to any other clause?

          HON. MUSHORIWA:  They were in relation to four other clauses.

  THE DEPUTY CHAIRPERSON: So it actually means that if they are in front of Clause 2, it means you are going to see your amendment because we have a list of the amendments here. – [HON. MUSHORIWA:  Thank you.] – Thank you.

THE DEPUTY MINISTER OF FINANCE AND ECONOMIC DEVELOPMENT (HON. CHIDUWA):  Thank you Hon. Chairperson.  I move the amendments standing in my name to Clause 2 for consideration, that: -        

Section 2 (“Interpretation”) of the Insurance and Pensions Commission Act [Chapter 24:21] (hereinafter called the “principal Act”) is amended—

  • by the repeal of the definition of appointed member.
  • by the insertion of the following definitions

“closely related” means any person who, the following shall be—

  • a father, mother, in law, brother or sister of the person;
  • a partner of the person, unless a court or the Commissioner is satisfied that neither person acts in accordance with the directions, requests, suggestions or wishes of the other;
  • a partner in a partnership, if the person, either alone or together with one or more associates, controls fifty per centum or more of the rights to the partnership’s income or capital;
  • the trustee of a pension fund under which the person, or an associate of the person, benefits or may benefit;
  • trustee of a pension fund, or any other person who benefits or may benefit under the pension fund; and
  • where the person is a company—
  1. a person who, either alone or together with one or more associates, controls the company; or
  • another company which is controlled by a person referred to in subparagraph (i), either alone or together with one or more associates”

 “asset” includes any property and any right, whether vested or contingent, of whatever kind provided that shares shall be exempted from being designated as assets.

Amendments to Clause 2 put and agreed to.

Clause 2, as amended, put and agreed to.

On Clause 3:

HON. BITI: Mr. Chairman, it is both a substantive and drafting amendment. If you look at the current Clause 3 (a), it says, ‘the object of the Commission shall be to promote the maintenance of a fair, safe and stable insurance and pension sector for the benefit and protection of policy holders and pension and provision fund members.’ That (a) should be split into two so that the first (a) should just be ‘to promote the maintenance of fair, safe and stable insurance and pension sector.’ Then (b) should be to protect policy holders and pension and provident members. The protection becomes a major objective of the Commission. This is necessary Mr. Chairman because of the pain that pensioners have suffered due to a weak regulatory framework due to hyperinflation, due to other factors. So the promotion should be a stand-alone objective of the Commission. Then the issue of ensuring a fair industry is a separate object. So let us split (a) into the promotion of fair industry and the protection of policy holders as a stand-alone imperator and objective of the Commission. I do not think the Minister will object to that because as it is, it is wordy, cumbersome and longwinded. So let us split that (a) into an (a) and a (b). Then the current (b) becomes a (c).

THE DEPUTY MINISTER OF FINANCE AND ECONOMIC DEVELOPMENT (HON. CHIDUWA): Thank you Mr. Chairman. I thank the Hon. Member for the submission. If we are to look at his submission, we are basically looking at a drafting problem and his proposal is meant to enhance the strength of the provisions as already provided for. I do not have any objection to what he has submitted because it does not change the material standing of the Clause. I submit.

Amendment to Clause 3 put and agreed to.

Clause 3, as amended, put and agreed to.

On Clause 4:

THE DEPUTY MINISTER OF FINANCE AND ECONOMIC DEVELOPMENT (HON. CHIDUWA): Mr. Chairman, I move the amendments standing in my name that on page 4 after line 14 of the Bill, delete clause 4 and substitute with the following—

  Section 4 (“functions and powers of Commission”) of the principal act is amended—

  • in paragraph (c) by the insertion of “and regulate” after “monitor”;
  • by the insertion of the following paragraphs—

 “(g) to approve, for purposes of continuing or commencing operations in the insurance and pensions sector, actuaries, auditors, asset managers, credit rating agencies and other service providers; and

  • to research and implement on the international best practices in the insurance and pension sector; and
  • to facilitate insurance and pensions market development; and
  • to produce and implement policies, guidelines, standards, directives and circulars to guide the sector on insurance and pension matters; and
  • to conduct investigations into any particular registered person or class of registered persons, where the commission considers such an investigation necessary for the purpose of preventing, investigating or detecting a contravention of this act or any other law governing the pensions and insurance sector.”

 HON. MUSHORIWA: Mr. Chairman, I had put some amendments to this Clause and one of them has been dovetailed and covered by the amendment by the Hon. Minister. The one amendment that needs to be put to this Clause is a new subsection (k) which says that this Act shall apply to all insurance, pension and medical societies notwithstanding anything to the contrary in their enabling instruments. What basically we are saying is that the IPEC Act should supersede any other legislation in as far as insurance, pension and medical societies are involved. We are aware that we have been told that no, because NSSA was done through another Act of Parliament, medical societies were done through another Act of Parliament but we are simply saying that for the sake of this Bill, the IPEC Bill should actually apply to all insurances, pensions and medical societies, notwithstanding anything to the contrary.

So, this Bill becomes major just like we do with the RBZ which is overally in charge of all financial institutions. It does not matter whether the Women’s Bank falls under the Ministry of Women Affairs but when it comes to the operations, the RBZ ought to have a say and this is the same thing that we are arguing that IPEC should be equipped to make sure that every insurance, pension house or medical aid society should fall under IPEC one way or the other.

HON. BITI: We strongly object to the proposed amendments by the Minister. We want the Bill to stand as it stood with the improvements proposed by Hon. Mushoriwa. You cannot have NSSA operating unregulated. It receives billions of dollars from the working people of Zimbabwe. It administers the primary social authority care for workers in Zimbabwe. So, it is bigger than all the other insurance schemes that the regulator IPEC is looking to oversee. So it must be regulated. There is no body or institution that is unaccountable. The regulator must regulate NSSA.

Medical aid societies are suffering due to mismanagement. If I take the Public Medical Aid Society (PSMAS), it is on the verge of collapse through mismanagement. The other year we had cash back where the former Chief Executive Officer of PSMAS, Cuthbert Dube was paying himself US$200 000 and an office orderly was paid  US$65 000 per month. If you look at the definition of insurance, insurance simply means the payment of a certain amount in anticipation of a contingency. So, medical aid society is the payment of an amount like normal insurance based on an anticipated contingency, so it is insurance. If it is insurance, it must be regulated by IPEC.

So, medical aid societies and NSSA must be regulated by IPEC as was the original amendment to the amendment.  The removal is strange because when amendments are made to a Bill, they would have gone through the Cabinet Committee on Legislation and the principles would have been accepted by Cabinet. So why is the Minister now seeking to revise Cabinet? Is the Minister now the President of the Republic of Zimbabwe? I do not think so. So the original amendments must stand and we cannot have an unregulated dog eat dog, a situation where the working people are compromised. The health system has been compromised in Zimbabwe because of the shoddy services provided by medical aid societies. My own mother is a member of CIMAS but she does not get anything. I have to subsidise her as a firstborn and I am telling you, I know of people who are dying in places like India and other countries because CIMAS is refusing to pay for them. So CIMAS and PSMAS are sacred cows in this country and must be regulated by IPEC.

*HON. MADZIMURE: Hon. Chair, the amendment that has been brought by the Minister is very important and cannot just be brought to the House but has to be taken to the people first. I am saying that because Hon. Mushoriwa alluded to it and Hon. Biti supported. What is happening at NSSA is that money is just taken and no-one is accountable and that also happens at PSMAS. Because there is no accountability, we are all affected by what is happening at PSMAS. As I speak, if you go to Fife Ave where those on Executive Medical Aid Plan by PSMAS used to be treated, it is now closed and no-one asks what is happening but people are contributing their money. Even the Minister does not know where to go if Westend is closed.

So, this issue of allowing people to continue personalising State institutions; right now the General Manager of NSSA is said to be on the run and they are just taking money willy nilly. So, the Minister should clarify why he thinks no-one should question NSSA. This then implies that there were a lot of people who took money and are trying to cover their tracks. This is a major amendment that cannot be just discussed here and concluded or brushed aside because it affects the people of the nation. We cannot have this amendment just changed like that when that was done in Cabinet until it came to the Committee and had hearings and concluded those hearings, now you want to change the Bill in this august House. I do not think that is proper. So Hon. Minister, may you leave it as it was because you are raising emotions.

HON. MARKHAM: I just want to buttress what has been said. We must remember with NSSA; NSSA has already got the competitive advantage over all other insurance companies by being a mandatory payment. Every single worker pays into NSSA and yet when it comes to the pensioners, they are receiving the least. One has to ask, with that competitive advantage, if you leave them out of this Bill so that they are not covered, who is going to oversee them? You have to ask yourself who is overseeing them now when all these mischiefs are occurring, including below average share transfers. All you are doing is; you are reaping the pensioner and when he wants his pension, he is voiceless because he is too old and not working. As a result, NSSA is becoming a feeding trough. There is no way there is logic in leaving NSSA out of this Bill.

Secondly, when we go on to medical insurance and medical aid companies, they must be regulated like everyone else. My prayer is that the Bill is clear that we cover these people completely. There is a mantra going round - leaving no-one behind. In this case, leave no-one behind as they must all be covered by the Bill.

          HON. CHIDUWA:  Thank you Chair and thank you Hon. Biti, Hon. Mushoriwa, Hon. Madzimure and Hon. Markham for your submissions, which converged towards a very critical point where we are saying we cannot leave NSSA, the Medical Aid Society to be on its own without regulations.  I think this is very important for us because we would want to protect the members of the public and those investing in their health and investing as part of their pensions.

 What I would want to bring to the attention of the Hon. Members is that it is true that the amendments went through the Cabinet Committee on Legislation, which I am also part of.  We are however guided by the AG’s office in terms of whether the provided amendments are in sync with the already existing legislation.  I would also want to draw your attention to the NSSA Act.  In terms of how it has been presented by Hon. Mushoriwa, I do not think there is a problem in having the IPEC Act being the supreme Act when it comes to insurance and pensions.  But we have a problem where NSSA was established through an Act of Parliament, we can only do this if we amend the NSSA Act first.  What is important is for the Hon. Members to cause for the amendment of the NSSA Act which can be brought to this august House through a Private Member’s Bill.  We can identify the offending clauses and bring them here.  This is what can cure our problem.  So if IPEC is the supreme law, then NSSA becomes subservient to that and we do not have a problem with it. 

          On the Medical Act, unless if what I got is not correct, the medical aid is going to be covered under the Medical Services Bill.  This Medical Services Bill will then accommodate the Medical Aid Societies.  I so submit.

          I move that we report progress and seek leave to sit again.

          HON. BITI:  Mr Chairman, as a question, law and I am speaking now as a senior lawyer in this country, what the Minister was saying is not correct.  You do not need to amend the NSSA Act to make  IPEC be the regulator because it is regulation and not management – just like we have not amended all Acts of Parliament to accommodate Parliament’s oversight functions; just like we did not amend other Acts of Parliament when we passed the Corporate Governance Act.  As a question of law, Minister, you were misled.  If you were telling the truth, you were misled; there is no law like that even in hell.  It is not correct; we can adjourn Mr. Chairman.

          HON. T. MLISWA:  On a point of order, failure of Ministers to be here does not render the whole process or other Ministers useless.  It is part of Section 107 of the Constitution of Zimbabwe and the Minister is doing what he has to do but it seems as if he needs to consult. This adjournment is for purposes of consultation.  We cannot give him room to consult. He has the powers vested in him to take on what people want.  The issue of the Act not being amended because of another Act is the same as why did they not do the same with the PVO Bill.  He went all the way to burn the whole bush over a rabbit, yet there are laws and Acts which are able to talk to any violation, whether its money laundering or something.  I am shocked that the other side is telling us that but you went to town about the PVO Bill, yet there are laws which were there to deal with any infringement of that.  We cannot allow him to get away with murder.  We cannot have different strokes for different folks.  It does not work like that. Let him deal with the issues as they are.  This is what Parliament wants – if at all we have made a mistake like any other mistakes we made with other laws, others will get to amend them. .  If there is anything, they can be realigned anyway.  I do not know why we should adjourn the debate .  The Minister is capable – he is a very learned and effective in many ways.  I do not know why he thinks he cannot stand and make decisions.  He is protected by Section 107 of the Constitution that Ministers, Deputy Ministers and Vice Presidents will be answerable to this House.  He is doing a good job, so  keep on doing the good job so that you can be remembered as a Minister who protected the people’s investment through NSSA where there is so much corruption happening. .  That move of having NSSA regulated will help the country in making sure the pensioners’ interests and pensions are well served other than living it to the looting teams.  I thank you. 

          HON. HWENDE:  I think there is need for a ruling.

          THE DEPUTY CHAIRPERSON (HON. MUTOMBA):  No debate Hon. Hwende.

          *HON. HWENDE:  You need to make a ruling - we cannot adjourn because of people who do not come to Parliament.  These Ministers who are supposed to be consulted should have been here in Parliament.   As Members of Parliament, we are ready to debate and make the law; it is our responsibility.  Even without accommodation, we are ready to make the law.

          House resumed.

          Progress reported

          Committee to resume: Wednesday, 1st March, 2023.



       HON. R. R. NYATHI:  I move that Orders of the Day Numbers 1 to 4 be stood over until Order of the Day Number 5 has been disposed of.

         HON. MAHLANGU: I second.

        Motion put and agreed to.

         HON. T. MLISWA:  On a point of order, it becomes very difficult for us to keep on debating and seconding motions and along the way, when the debate is on it is stopped.  What guarantee do we have that this one will not be stopped again?  I did second this IPEC Bill and the next thing during the debate, it was stopped.  How many other debates will be stopped – I do not know because precedence has been set....

THE HON. DEPUTY SPEAKER:  Hon. Mliswa take your seat, you are out of order.


INSURANCE BILL [H. B. 1, 2021]

           Fifth Order read: Second Reading: Insurance Bill [H. B. 1, 2021].

               HON. DR. NYASHANU: Thank you Madam Speaker Ma’am.  I rise to present a report on the Insurance Bill by the Committee on Budget, Finance and Economic Development.

  •         Introduction

          1.1. Since the attainment of independence in 1980, there has been very little progression in terms of strengthening the regulatory framework in the insurance and pension industry, which resulted in legislative and policy gaps. The Insurance Bill, which was gazetted on 10 September 2021, seeks to repeal the current Insurance Act and usher in best practices which have long been missing in the industry as well as  enhance protection for policy holders. The Bill also seeks to align the laws in the sector with the Constitution and the Justice Smith Commission of Inquiry of 2017.

1.2. The review of the envisaged laws governing insurance, public and private occupational pension funds should facilitate for the recommended reorganisation of the insurance and pension industry. This process of legislative reforms once completed would present a new era in the insurance and pension sector, particularly stabilising the sector which contributes immensely to economic development as the country strives to become an upper middle income economy by 2030.


2.1. In 2014, Cabinet approved the key principles to regulate the carrying of insurance business in Zimbabwe and to repeal the current Insurance Act (Chapter 24:07). However, the process never saw the light of day until the coming in of the new dispensation, which has shown commitment in aligning the laws with the Constitution and addressing the concerns raised by the Justice Smith Commission of Inquiry as well as to align the sector with international best practice.  

2.2. One of the challenges raised by the Commission of Inquiry was loss of value attributed to insurance companies and pension funds which failed to index contributions, premiums and benefits to inflation; arbitrary and prejudicial conversion methods from ZW$ to US$; arbitrary terminations of products and closures; pension contribution arrears; failure to separate insurance, pension and shareholder assets; poor record-keeping as most institutions could not account for assets; investment returns and individuals’ contribution records; poor corporate governance practices; unsustainable administration and other expenses as high as 300% of pension contributions as well as compromised provision of actuarial services and absence of skills.

2.3. In light of that, there was urgent need to revamp the sector through reviewing the legislation to address such discrepancies and loopholes that have negatively impacted on the sector.

3.0. Methodology

3.1. Section 141 of the Constitution requires Parliament to engage the general members of the public in its legislative processes and consult them on any Bills being considered in the August House. Therefore, in fulfilment of this constitutional obligation, Parliament through the Portfolio Committee on Budget, Finance and Economic Development conducted public hearings on the Insurance Bill to gather the views of the key stakeholders and the people of Zimbabwe.

3.2. In light of the technical nature of the Bill, the Committee invited the Insurance and Pension Commission (IPEC) to unpack the Bill prior to conducting public hearing in selected provinces in the country. The Committee was then invited to participated at a two-day workshop at Leopard Rock Hotel, Mutare where the Bill was unpacked by IPEC.

3.3. Public hearings were then conducted from 13 to 16 March 2022 in Bulawayo, Mutare and Harare. Generally, attendance by the people of Zimbabwe was very poor as only a total of 25 people attended the 3 consultative meetings, as follows, Bulawayo (17), Mutare (1) and Harare (7).

3.4. The Committee then deliberated on the submissions received together with the views raised during the two-day workshop by the Committee and IPEC which forms this report.

4.0. Summary of Submissions on the Bill

4.1. Clause 2 on application of the Act gives the responsible Minister the powers to exempt certain entities from the application of the Bill. The Committee noted with concern that Subsection (b) and (c) must be reviewed as it gives the Minister the powers to gazette a statutory instrument or regulations which can be subject to causing arbitrage in the sector as some insures are exempted while others are not.

4.2. Clause 3 provides definitions of terms used in the Act. The public observed that the definition of the word “premium” as used in the bill was wrong and misguiding from an insurance practitioner perspective. Reference was made to the usage of the word ‘benefit’ in defining ‘premium’ which is normally applied to long term insurances such as life policies and pensions. The public argued that the word ‘benefit’ does not apply in paying a short term claim. Hence it was recommendation that IPEC should assist with the actual definition of the word ‘premium.’

4.3. Clauses 6 and 7 on registration of insurers raised so much debate among Committee Members who felt that there was need to put minimum qualifications for registration of an insurers in addition to other requirements outlined in the Bill.  The Committee also suggested that an additional clause be included which requires the Commission to complete the registration process within 21 to 30 days from the date of receipt of an application.

Clause 7 on registration of insurers by the Commission. Subsection (2) (iii) which requires ‘at least half of the applicant’s directors’ are either citizens or permanent residents of Zimbabwe must be amended to read ‘at least two thirds of the applicant’s directors.’

4.4. Clause 10: The Committee highlighted the need for a new insertion (d) which mandates the Commission to also publish any notice of registration and of cancelation of registration of an insurer on the website in addition to those proposed in the Bill. Then the current subsection (d) becomes (e).    

4.5 Clauses 11 and 12 provides for the registration of insurance brokers, loss adjusters and insurance surveyors. The subheading for clause 12 is not complete as it states that, “Registration of insurance brokers, etc.” However, the public noted in a Bill, all subheadings must be complete and specify exactly what they seek to achieve. Thus, it was proposed that the subheading be completed and also to include a new insertion for registration of other players in the market, such as claims settlement agent to cater for the small insurance agencies or other agencies in the sector. 

4.6. Clause 14 on the cancelation of registration of insurance brokers, loss adjusters and insurance surveyors, it was also proposed that all gazettes be standardised and published also on the website in addition to other proposed medium of communication.

4.7. Clause 33 was welcomed by the stakeholders in the industry as it is a new provision. Currently, the Minister make use of a directive through a statutory instrument to provide for board of registered insurer and insurance brokers. However, concerns were raised on the manner in which the word ‘insurer’ is being used to refer to three different aspects.

Firstly, the insurance companies, secondly, the re-insurance companies and thirdly to other insurance players. This was highlighted to be potentially confusing in the insurance market. Recommendations were made on this logjam, highlighting that there is need for the bill to distinguish the insurance players and not necessarily use the word ‘insurer’ to refer to any insurance player. Specific reference on the likelihood for confusion in clause 33 was made on where an insurer is referred to as an ‘insurance company’ and subsequently called an ‘insurance broker’ in the same subsection. Emphasis was therefore made on the need for clarity on the actual names given to insurance players.

4.8. Clause 36: The public raised concern on the definition of “significant interest” given in the Bill. The public posited that clause 36 failed to provide specific information on when and how the commission would be defining and quantifying the interest. Members of the public also recommended that there should be clarity on the process in the event that an insurance company is a public listed entity.

Subsection 2 of the Clause must also be reviewed. The Committee noted with concern that the term ‘knowingly’ must be deleted so that it does not create confusion in the interpretation of the law.

4.9. Clauses 37 and 38 are new provisions to curb abuse of shareholder funds through investing in off-shore markets. The Committee welcomed the idea of having IPEC to approve all opening of subsidiary branches outside the country as it will seek to safeguard the best interest of the country.

4.10. Clause 39: Members of the public welcomed clause 39 which seeks to encourage the sharing of policies and the creation of procedures on how insurance companies can share a particular risk. They however called on the Committee to ensure that the Bill specifically highlights “co-insurance” in the clause which indicates that two entities can agree to jointly insure against a risk.

4.11. Clause 41: The public recommended that the requirement in this clause for brokers to remit premiums timeously with seven working days be reviewed. Firstly, the use of the term insurance broker alone is not adequate. The provision must apply to every registered insurance broker, insurance agents or other parties that receive premiums.   Secondly, the prescription of seven working days is problematic as it becomes a long time in a volatile environment. Thus, the people and the Committee recommended that IPEC from time to time review through regulations of delegated law the period depending with the market volatility.

4.12. Clause 44 requires the Commission to request insurers to furnish information regarding their liabilities or valuation of the insurers’ assets. However, in the event that the Commission is not satisfied with the information provided, Subsection 2 mandates the Commission to cause an independent evaluator to provide such valuation of liability or assets. However, the Committee felt that subsection 3 be amended to ensure that the commission shall bear the cost for causing any independent valuations. This has been suggested as measures to ensure that the Commission will also not request for valuation on flimsy grounds.

4.13. Clause 49 on the percentage of assets that can be maintained in Zimbabwe or abroad. The Committee noted with concern the open ended check given to IPEC to determine the percentage of total assets which may be maintained outside Zimbabwe by a registered insurer. Therefore, the Committee proposes that a limit of 25% of the assets can be maintained outside Zimbabwe in line with precedent set in the Pension and Provident Fund Bill.

4.14. Clause 79: provides for arbitration and the courts procedures as recourse for disputes. Given the possibility that small and micro policy holders may not be able to afford the arbitration process, the public recommended that there should be a provision in the Bill for embedment services or an inclusion of a specialised small claims unit at IPEC which handles such kind of disputes.

4.15. Clause 80: provides for the sum insured to be in the legal tender of the Zimbabwe. This is a new provision, which the Committee felt that it must be removed and left to be prescribed under regulations since the Zimbabwean dollar currency is volatile.

4.16. Clauses 81 – 82: provides for legibility of printed policies and electronic policies. The Committee felt that this provision must be removed and be left for inclusion under regulations since it is more administrative and too prescriptive. However, members of the public also submitted that there has to be a definition of what an electronic policy is to avoid confusion and misinterpretation.

4.17. Clause 83: Members of the public submitted that both parties in the insurance contract should be equally responsible for ensuring disclosure of certain material facts. They noted the fourteen (14) day requirement for the insurer to provide the insured with a clearly legible policy document was too long. It was recommended that this period be reduced to seven (7) days so that service delivery will not be affected in the event of a claim within that period.

4.18. Clauses 84 and 85: Members of the public recommended for clarity on the use of the word ‘insurance broker’ under this clause. Moreover, emphasis was made on the need to include the ‘duty to disclose by the insurer’ in clause 85. Members of the public also recommended re-wording of clause 85 where a broker can act on behalf of the insurer implying a broker as only an agent of the policy holder.

4.19. Clause 86: Members of the public recommended that the clause should also stipulate the terms that should accompany a policy that is issued on a credit basis.

4.20. Clause 89 on registration of death of children under fourteen years of age does not comply with the Constitution which defines a child as any boy or girl below the age of eighteen. Thus, the provision must be amended in line with the Constitution.

4.21. Clause 108 provides for days of grace, paid up policies and non-forfeiture provisions of funeral policies. The Committee noted that subsection 10(i) where a maximum maturity period for every funeral policy is set at twenty-five years is too long a period for one to be contributing premiums. It was recommended that the period of twenty-five years be amended to ten years.

4.22. Clause 126 provides for the Commission to prescribe minimum and maximum premiums. However, the Committee felt that regulation of premiums must be based on the sum assured and the Commission must develop a formula determining the premium.

4.23. Clause 129 provides for an annual report to be submitted within 6 months to the Minister by the Commission. The current act is silent about deadline. Thus, the Committee welcomed the new provision which seeks to synchronise and rationalise this process to be in line with best practice of producing and submitting reports within six months.

4.24. Clause 135 is a new provision on currency conversion. The provision seeks to ensure that policy holders are not prejudiced of their premiums by providing the steps to be followed in any eventuality by every insurer. This provision was welcomed by the Committee as it seeks to factor in all the economic risks such as inflation and currency instability that may arise in the country in line with the Commission of Inquiry recommendation.

4.25. Clause 140: provides for regulations by the Commission. However, the Committee highlighted that this provision must be amended to refer to the responsible Minister through the Commission and not the Commission to make regulations as provided for in the Bill. It was noted that the Minister administers an Act of Parliament and not the Commission. 

  • Committee Observations

5.1. That under Clause 2, the following subsection (b) and (c) be reviewed so that the Minister does not carry too much powers to gazette a statutory instrument or regulations exempting certain entities from the application of the Bill. The Committee noted with concern thatthis Clause may cause arbitrage in the sector.

5.2. That although the Insurance Bill is a welcome piece of legislation that sought to strengthen the insurance industry, the wording within the Bill needed to be given due diligence. The Committee was of the view that due to its technical nature, it was pertinent that Clause 3 of the Bill on Interpretation should clearly define key provisions such as “assets”, “insurer,” “premium” and provide proper wording to distinguish such among the insurance players. This was emphasised to be critical in eliminating vagueness and confusion that may arise in interpreting some of the provisions of the Bill.

5.3. That any reference to the term ‘approved’ in the Bill be removed and be replaced with ‘prescribed’ which is more authoritative and ideal.

5.4. That an additional clause be included under Clause 6 on insurers to be registered to call upon the Commission to complete the registration process within 21 to 30 days from the date of receipt of an application.

5.5. That the term “significant interest” in Clause 36 be clearly defined and provide specific information on when and how the commission would be defining and quantifying the interest.

5.6. That the idea of having IPEC to approve all opening of subsidiary branches outside the country in Clause 37 and 38 is a welcome development as it will seek to safeguard the best interest of the country.

5.7. That the fourteen (14) day requirement for the insurer to provide the insured with a clearly legible policy document in Clause 83 was too long. The Committee is of the view that that the process be reduced to seven (7) days so that service delivery will not be affected in the event of a claim within that period.

5.8. That while Clause 86 of the Bill recognises that some policies can be offered on credit, it is critical that the Bill stipulates the terms and conditions that should apply to a policy that is issued on a credit basis.

5.9. That they allow the Commission to prescribe minimum and maximum premiums in Clause 126 must be removed given that a premium must be self-regulatory rather than regulated. The Committee is of the view that market forces must be allowed to determine such premiums.

5.10. That Clause 140 be amended to allow the Minister to gazette regulations instead of the implementing entity, the Commission. 

5.11. That the conferment of investigative powers to the Commission in Part XII of the Bill is a welcome development. However, it is not so clear if the Commission can have arresting powers.

6.0. Committee Recommendations

6.1. That the Act must apply to every player in the sector and the proposal for an exemption be removed.

6.2. That interpretation of key terms used in the Bill such as “assets”, “insurer,” “premium,” “significant interest “insurance brokers,” “insurers”, et cetera  be clearly defined to avoid vagueness and misinterpretation of the law.

6.3. That the fourteen (14) day requirement for the insurer to provide the insured with a clearly legible policy document be reduced to seven (7) days to ensure efficient and effective service delivery in processing claims and policies.

6.4. The 7-day period of collection of premiums should apply to all people including insurance agents who collect premiums and not only to brokers.

6.5. That the Bill be clear as to whether the conferment of investigative powers to IPEC warrants it to have arresting powers.

6.6. That the provision which states that, ‘at least half of the applicant’s directors’ are either citizens or permanent residents of Zimbabwe in Clause 7, subsection (2) (iii) be amended to read ‘at least two thirds of the applicant’s directors.’

6.7. That the subheading for Clause 12 which reads as follows, “Registration of insurance brokers, et cetera.” be amended so that it is complete and straight forward.

6.8. That the Bill clearly stipulates the terms and conditions that should apply to a policy that is issued on a credit basis.

6.9. That Subsection 2 of Clause 36 be reviewed and remove the term ‘knowingly’ which may create confusion when interpreting the law. 

6.10. That under Clause 41, the period of seven working days be removed and allow IPEC to prescribe the period using regulations, which may be changed from time to time depending on the volatility of the market.

6.11. That a limit of 25% of total assets of a registered insurer can be maintained outside Zimbabwe in line with precedent set in the Pension and Provident Fund Bill.

6.12. That the period of fourteen (14) day requirement for the insurer to provide the insured with a clearly legible policy document be amended and reduced to seven (7) days so that service delivery will not be affected in the event of a claim within that period.

6.13. That the clause 86 stipulates clearly the terms that should accompany to a policy that is issued on a credit basis.

6.14. That Clause 89 on registration of death of children under fourteen years of age be aligned to the Constitution which defines a child as any boy or girl below the age of eighteen.

6.15. That subsection 10 (i) be reviewed from the maximum maturity period of twenty-five years and ten years.

6.16. That the Commission regulates premiums based on the sum assured while at the same time develop a formula to determine the minimum and maximum premiums.

6.17. That the responsible Minister be given the powers to make regulations to support the implementation of the main Act and not the Commission. 

7.0. Conclusion

7.1. The Bill is progressive as it seeks to strengthen the Insurance and Pensions industry in line with the international best practices. The bills seek to bring sanity to the Insurance and Pensions industry which for decades has crumbled under a weight full brunt of factors inter-alia legislative shortfalls and macro-economic challenges.

7.2. The Committee therefore implores that all raised observations, the input from the public and recommendations therein be given due attention. I thank you Madam Speaker Ma’am.

          HON. MUSHORIWA:  Thank you Madam Speaker for giving me this opportunity.  Madam Speaker, it is true that our insurance laws have not been reviewed for quite a long time.  Admittedly, the bringing in of the Bill before this august House is a noble thing.

          Madam Speaker, the only challenge that we face in terms of the coming up of laws in this country is that it takes a long period; debate on this Insurance Bill that is now before the august House started more than 15 years ago.  This Bill should have been presented to this august House in the Seventh Parliament.  Hence Madam Speaker, you will find that quite a number of issues that are contained within the Bill will need to be reviewed.

          Firstly Madam Speaker, as the Chairperson of the Budget and Finance Committee stated, the Bill gives the Minister of Finance and Economic Development too much powers and gives him the discretion to exempt certain institutions so that they are not covered by insurance.  Insurance business is a key contributor to the economic growth and we should never allow a situation where the Minister can have leeway to exempt certain institutions; that is dangerous and should not be allowed.  It is these issues that need to be corrected.  In other countries, economic growth, contributions by the insurance and pension sectors are so massive because they contribute towards savings and investments as a country.  We want to make sure that when we come up with this Act, it has to be such an important Act that can contribute to the growth of our economy. 

          Secondly Madam Speaker, we need a situation where our insurance laws move in tandem with what is happening globally and also take cognisance of the challenges that we have faced in this country from 2008 to date.  You are aware Madam Speaker, that insurance contributors lost their monies when there was a change-over from the Z$ to the USD and again when we did the 1:1.  Naturally, we want to make sure that we will not have a problem as we go forward in terms of having such problems.

          Then the other issue that I hope the Hon. Minister will cover is the problem in terms of definitions.  For instance, how do you define significant interest?  I have noted that in the IPEC amendments that had been submitted by the Hon. Minister; I hope there is need to also make sure that we come up with proper definitions on significant interest.  We also define what is an asset and all the other relevant definitions so that at least they do not leave any room to anyone.  I am just hoping that the Hon. Minister will do exactly that.

          Madam Speaker, we feel and this is very crucial, that mandate be given to IPEC to determine percentages of assets that insurance companies should keep outside Zimbabwe through this Bill.  I think we cannot leave that discretion to the IPEC Board.  The law should be very strict since contributions are being made here in Zimbabwe.  Why should we have the IPEC Board saying we will allow this entity to invest 40% outside the country; this one we will allow 20% and this one 10%?  We need to make sure that in this particular Bill, when we come to the Committee Stage, we stipulate that so much maximum percentage should be invested outside so that at least they hedge against some other macro-economic challenges that may exist in the country. To then allow an open cheque Madam Speaker, may not be the best thing that we want to do as a country.

          Then the other issue that is crucial; you know Madam Speaker, we now have quite a number of funeral companies and the dilemma that we face is, a person contributes his or her money towards a funeral policy company.  First year, you have done well; second up to 10 years contributing then on the 24th year whilst you have been contributing monthly and annually, you then fail to contribute on the 24th year and die on the 25th year; all your contributions are nullified – it cannot be allowed Madam Speaker.  We need to have a situation that there is protection of policy holders.  Unfortunately, this Bill does not do justice to the protection of contributors.

          The other crucial aspect Madam Speaker is also on the representation.  We believe that all the board insurance companies, starting from the IPEC Board right down to all the other sub-boards, there should be a deliberate policy, just as we do when you look at the Pension Trust Board; you will notice that on the trustees, there is always a proviso that at least half should be coming from the workers or those who are contributing and the other half coming from the employer.  We cannot have a situation where the contributors are not represented on the IPEC Board or the other sub-boards.  I think that would be wrong and will not help because one of the problems that we saw from the Justice Smith Commission Report, it is this issue of having people who represent on the IPEC Board and various boards being far from what really happens within the industry. 

          Then the other issue that I think is also crucial that we have noted in this Bill is that there are quite a number of areas in this Bill where it then says that the Minister and IPEC shall make regulations.  Indeed, regulations ought to be made by IPEC but I think in this Bill there is too much, there is excessive and it gives a lot of leeway to the Minister and the IPEC. In a way, it undercuts Parliament as the lawmaker. I think we need to make sure that when we do this, we really look into it.

The other issue which I believe is also problematic Madam Chair, which I think the hon. Minister will need to properly answer is the requirements of three shareholders and the limiting to the extent of shareholding. I think we need to be clear. Our insurance companies, if we are going to limit to a minimum of three shareholders, something needs to be clarified because for instance, we have got insurance companies that have been in existence for some time. We passed this Bill to simply say you need to know that you have got the minimum shareholding structure. What happens to those companies? Do those companies have to now sell their shares? What it happens that within this country there are no shareholders who are willing to invest in their business, what happens? I think we need to make sure that there is a sunset clause that is put in this Bill to make sure that if indeed there is need for us to move towards the three shareholders criteria, at least we need to make sure that we take cognisance of the current and the existing insurance companies that are currently operating in the country.

The other issue which I think is also important Madam Speaker, which I believe requires a lot of thinking is the question of the prescribed asset threshold. I think, in this case, just like I was saying from the beginning, we take note of the importance of insurance business. In a normal country, our savings, if you have got proper and fully functional insurance companies, you would know that at least we are covered. Unfortunately, I know the challenge that we faced is that most of the investments that were done by insurance companies and pension houses buying Treasury Bills and other money market wiped off due to inflation and other economic challenges that we were facing. However, I believe Madam Speaker, that there is need in my view to make sure that we sort this issue in a proper manner that can allow us to move forward.

Madam Speaker, I want to say this before I sit down. If you look at the insurance Bill, it is big in terms of size but I think that the Hon. Minister, given what the Hon. Chair of the Portfolio Committee has said and the number of things that we think have been overtaken by events, we need to make sure that we come up with real amendments during the committee stage because the Insurance Bill as it stands now, does not do justice to what needs to be done under a proper insurance Act. I also believe that part of the reason why some of us will cry is that we want to make sure that we have a proper regulatory pace. It is primarily to make sure that this country moves forward, that we have got regulators that we can depend on. We should never leave anything to few individuals or one Minister for that matter to make a decision. We need to make sure that everything is put in black and white. This is the reason why Madam Speaker, whilst we welcome this Bill, we believe that more needs to be done and we will certainly be submitting our amendments to this Bill when we come to the Committee Stage. I thank you.

HON. BITI: Thank you very much Madam Speaker for giving me the opportunity of debating on this important Bill, the Insurance Bill. I wish that these three Bills, one of them is an Act, the Insurance Bill that we are discussing today, the Pension and Provident Fund now an Act and the IPEC Bill that we just parked in Committee Stage. I wish that we have had an opportunity of synchronised debate by the National Assembly because there is interconnectivity between the three Bills.

Madam Speaker Ma’am, we have a crisis in the insurance and pension sector. That crisis in the insurance and pension sector came as a result of the loss of values, particularly in 2008, particularly the conversion of insurance assets that was done by the insurance houses unilaterally in March of 2009. The loss that pensioners have suffered, insured persons have suffered upon the conversion from the multicurrency regime to the Zimbabwean dollar, the de-dollarised status quo that was effected by SI 33 of 2019 on the 28th of February, 2019. 

We have a crisis of the loss of values. We have the crisis of an insurance industry that is undisciplined that is extractive, that is greedy. We know this as a statement of fact Madam Speaker, because of the findings of the Justice Smith Commission of Inquiry Report that was published in March 2017. That Commission of inquiry report is an indictment against the insurance industry. It accused and found against the insurance industry, particularly two houses, the Old Mutual and the First Mutual, rampant excessive aggrandisement, consumerism and conspicuous consumption. They live in Borrowdale in houses where engineering has said you cannot build a house but they will excavate. They drive Lamborghinis and other fancy cars parked at Sam Levy’s Village at the expense of insured individuals.

Thousands and thousands of insured workers have been pauperised by the insatiable greedy of insurance actors in the insurance sector. The question that then arises Madam Speaker, is that, does this Bill that we are considering address and deal with the mischief that is there in Zimbabwe? Does an insured person who lost his value or her value as a result of the shenanigans, the omissions and the commissions of these players have her question answered?

I submit Madam Speaker that her question is not answered. The mischief of the collapse of the insurance industry has not been answered in this particular sector. Hon. Nduna is here. He will tell you that there are over two million vehicles in Zimbabwe and of those, each one of them is obliged by operational flaw to pay compulsory third party insurance. Millions and millions of dollars of third party insurance are collected but the economy has nothing to show for it except expensive houses in Borrowdale, in Ward 18, represented by Hon. Rusty Markham. It is not good enough. So we need radical comprehensive transformative reform of our insurance sector. I want to propose the following: firstly, let us create structures of good governance inside the insurance sector. The current position of the law is that anyone cannot just own an insurance company but you are dealing with resources. It is not easy to own a bank. It should not be easy to own an insurance house.

So we must put a prudential governance criterion on both those who own these insurance companies and those who run them. If there are qualifications for lawyers and doctors, there must also be qualifications for the insurance professionals. Not every John Chibadura can just wake up and say I am now going to be the Chief Executive of ZIMNAT Assurance or Insurance; there must be qualifications. There must be a professional body that looks after the professionals that will run this sector because you cannot run an insurance from Borrowdale Brooke Golf Club or from Royal Harare Golf Club wamborova kadoti doti, warova bhora regold pa hole number nine wonobata mari dzevanhu. That should not be allowed. Governance issues must be dealt with. This Bill does not deal with that.

Secondly, the strong role of the regulator - the Justice Smith Commission of Enquiry Report found that 19% of the loss was due to a weak regulatory framework. I do not see a marriage, connection or intercourse between the IPEC Bill we parked a few minutes ago and this Bill. The insurance sector must give regular reports to the regulator. We do as lawyers. We give regular reports on the state of your trust account. You do not get a practicing certificate, unless you have met certain criteria approved by the Law Society of Zimbabwe. Insurance houses must meet the same criteria and must be given an annual licence if they meet those issues and the regulator must give them. We must hold them to high standards.

Third is the conduct of insurance. Insurance companies have been allowed to create wealth which should not have passed to the owners of policies. They have been allowed to form and hedge against inflation through the formation of property companies. The biggest player in this economy on the property market is the Old Mutual but there is a demarcation or durawall between pension assets and the holdings assets. First Mutual has got a holdings company which is very rich but the assurance company itself, First Mutual Assurance is a very poor company but the holding company was built by the sweat and labour of the pensioners or insured persons.

All assets made and created by pension insurance contributions must fall into the pot and the insurance person must benefit. This must have retrospective application. I represent a man called Rasmoss Pasipanodya who is coughing. He was a miner at ZIMPLATS and he developed a disease called pneumoconiosis, which is a disease of the lungs which comes if you go underground and you are affected. Old Mutual paid him RTGS$22 000 yet he was making contributions in USD from ZIMPLATS. Now, the Old Mutual says we cannot pay you, we are poor. That is why I have said and submit that there must be retrospective application of this law that says do not separate assets.

The same applies to the point Hon. Mushoriwa has made. If you look at the financials of Old Mutual, it has invested across sub-Saharan Africa. It makes more money in Zimbabwe in per capita terms other than any other country because we have been a dollarised economy. The real reason why it makes more money from Zimbabwe is because Zimbabwe is also a country where they make the least contributions to their insured people. That does not work. The poor Zimbabwean worker who is squeezed by inflation, ndiye ari kumorwa naana Old Mutual, naana First Mutual Life. PachiShona toti kura uone mwanangu, uri kungosvetwa chete. They say you cannot draw water from a stone but in Zimbabwe, the insurance industry is drawing water from rocks and we cannot allow that. That is why in this Bill, this is an opportunity of making sure that there is insurance justice in Zimbabwe, starting with Hon. Nduna’s favourite subject ‘compulsory third party road motor insurance to normal insurance to life insurance’-  so governance, regulation, asset management.

We must also put in this Act thresholds. We have done it in other Acts. I think it is the ZINARA Act where we said the expenses cannot be more than 2,5% of the income. For insurance companies, their overheads must meet a certain minimum threshold, say not more 3% because if we do not do that, they will buy mansions and go on holiday to Dubai at the expense, the blood and sweat of the poor working person who is struggling to buy a small pension for himself and his family. Let us have a threshold that your overheads do not exceed a certain threshold: governance and governance.

I now come to other issues. The Act gives too much excessive power to the Minister. If there is anyone who needs to be given excessive power, it is the regulator IPEC not the Minister. So the Minister should never be allowed as he is allowed to determine what companies and insurances, and what exemptions. Let us not give discretion. Law must be certain. The doctrine of legality demands that law must be certain, credible and legitimate. When you allow the Minister to play Russian roulette with what is an insurance company and what is not, it is no longer law. It is now arbitrage or extractive and that is why our country has not developed because I am going to corrupt the Minister and say I do not want after I have met him at the airport ndichingoti zvese zvakarongeka. Let us not give the Minister discretion; if we have to give anyone power, it should be the regulator because the regulator, through the Act which we just parked, we are trying to give the regulator teeth. We need to make a direct connection between this Act and the Pensions and Providence Fund. We do not do that and we will propose amendments.

There is a third thing which concerns me. The Act in Sections 80, 81 and 82, it says and speaks about married persons but the Act does not define what a marriage is. You have got a problem now because the normal definition of a marriage is a general law marriage which is now section 5.1 of the Marriages Act which used to be Chapter 5.11 marriage which used to be Chapter 37 marriage. So what it means now is that wives/women or partners in unregistered customary law unions are not recognised.  I am not making a case for the civil partnerships in Section 41.  I do not want to see those ones.  I am talking of those traditionally married and lobola paid for them but they did not wed.  This Act is deliberately quiet on that but it creates chaos.  Let us define what we mean by marriage.  Section 5:11, a customary law union but excluding your fancy civil partnership which I do not even want to see.  If we do not do that we have a problem.  That section is very shaky.  We need to protect women, widows and Madam Speaker, you know how widows suffer when the husband dies.  You know how our community is very patriarchal and why those women become third class or fourth class citizens.  What we have seen in movies like Neria is not a joke at all but is happening daily.  So, this Act must protect women and the institution of marriage, including the unregistered customary law union. 

          Then I come to the issue of currency.  The draft Bill says that a policy shall be in the currency of Zimbabwe.  It also says that the insurance company and the insured can agree on a currency.  We live in a currency that is very volatile.  In the last 20 years alone, we have used US dollars, Bearer cheques and now the RTGs dollar and so forth.  So, in a climate of currency volatility, it is very important that we preserve value by saying that the insurance policy must be honoured in the currency that it was being paid and that provision 2 must apply retrospectively.  What has happened is that insurance companies have made billions out of our currency fluctuations. Each time we move away from the US dollars, they have made millions and they will pay you RTGS dollars yet they were receiving contributions in US dollars.  We are tired of Old Mutual and First Mutual.  We must hold them to account and this is the space to hold them to account.  We must carefully craft that provision so that value is given and placed in currency. 

          The next issue I want to speak about is; in every other profession, if you commit an omission and a commission, the individual is held personally liable.  If you commit a commission and omission and you are an accountant, you are disbarred.; if you are a doctor, you are disbarred, if you are a lawyer you are disbarred.  But there are only two professions that get away with it.  If a banker commits a commission and omission, he can end up being a Minister.  The same thing applies to insurance companies.  We need to hold these professionals to account.  So, I propose that we impose personal liability because you are handling millions of people’s money.  If as a lawyer, I mishandle trust funds, I will be in the newspapers and disbarred.  The same applies to a doctor.  If he gives you prednisolone thinking it is a cough mixture, he will be disbarred.  So we need to revisit personal liability.

          THE HON DEPUTY SPEAKER:  Your time is up Hon. Biti.

          HON. NDUNA:  I move that he be allowed another five minutes.

          HON. MARKHAM:  I second Madam Speaker.

          HON. BITI:  Madam Speaker, another area of insurance banditry is their investments.  We must restrict the investments that they are allowed to make by law to quality none volatile activities.  You cannot take insurance money to go betting on the Zimbabwe Stock Exchange on share counters that you know will not yield any returns.  You cannot do that Madam Speaker and the point I am submitting is that the insurance sector has got a free hand in what they are allowed to invest as part of hedging their fund.  We must use this opportunity to ensure we regulate where they can put their money so that it is protected.  Part of the thing we need to do, which is why I said we need to marry this debate and the debate of the other Bills; we must also empower IPEC to make them disclose investments that they have made. 

There must also be thresholds; they are obliged to buy Government paper through prescribed asset ratios.  That is alright but we must put a threshold of the funds that they can put on the Zimbabwe Stock Exchange for instance.  I would submit that if they are to invest offshore, we must also put thresholds.  However, locally we need to be very careful and ensure that whatever they invest abroad is fungible to the extent that it can be remitted back to Zimbabwe.  The country of investment should be one we have some agreements on repatriation or extradition because if they can go to jurisdictions or havens which we cannot touch, they will be protected by their law.  So we need to make sure we put thresholds.

          In conclusion, I would like to submit that the Bill has come and it is premature but I think we should be given the opportunity of proposing major amendments at Committee Stage.  The Bill as it stands right now is very naked.  We must use the opportunity of the Committee stage to try and patch it up.  I thank you very much.

          HON. NDUNA:  Good afternoon Madam Speaker Ma’am.  Before I start my debate, I need to talk about the people that man this institution called the insurance sector.  There should be no collusion, corruption and nepotism.  We should replace that with coordination, co-operation and networking.  I say this because those that are regulators in the insurance sector should not be the players as well.  We should not have those that have the cake and eat it, otherwise we have a referee who is also a team player.  We would not have an effective and efficient football match if we had a referee who is also a player.  These are the fundamentals and objectives that I want to start with – to say those people that man these institutions should be people that have enough credibility, reputation that is undisputed and second to none.  There should not be any conflict of interest. 

          When I was Chairperson of the Committee on the Portfolio Committee on Transport, I could not bring in and interrogate institutions where I had pecuniary interest Madam Speaker Ma’am.  I also implore that these people that man these institutions should not have any pecuniary interest.  The current scenario in the Insurance Council of Zimbabwe, IPEC and in various insurance institutions leaves a lot to be desired.  You will find that it seems like Zimbabwe does not have enough qualified people out of the 15 million population - we are recycling dead wood in the insurance sector.  This one is Chairperson of IPEC, Chairperson of Post Insurance and is Chairperson of this other insurance and so forth.  We are not going anywhere if we continue to chase our tail in that regard.  It is the credibility of the people that are manning these offices and these institutions should be impeccable.  There should not be any collusion, corruption and nepotism.  We need to search amongst the 15 million population and find  people of credible reputation that need to chair these institutions.

          Madam Speaker Ma’am…

          THE TEMPORARY SPEAKER (HON. MUTOMBA): It is now Mr. Speaker Sir.

          HON. NDUNA:  Sorry Mr. Speaker Sir. Good afternoon Mr. Speaker Sir.

          THE TEMPORARY SPEAKER:  Good afternoon to you Hon. Nduna.

          HON. NDUNA:  I want to touch on the issue of payments in the right currency that has value which currency could have been remitted by the insured.  That should certainly take route in this amendment that we are talking about in particular in IPEC regulations Mr. Speaker Sir.  There is need definitely to regulate that sector in that way.  Let us derive value especially for the person who is insured. 

          In Chegutu West Constituency, I have got Mr. Green – he calls me every other five minutes.  He does not know whether I am in Parliament or not but I understand his anguish, predicament, problems, trials and tribulations.  It is because he has not gotten any value out of the remittances or payments that he was making to Old Mutual or NSSA.  He has derived not even a pittance because there has not been any output or payments of insurance after he retired or terminated Old Mutual Insurance in the right value.  It is my prayer when it comes to Mr. Green’s insurance and pensions and all other old people in my Constituency; my heart is on the right side.  I really share their predicament and there are numerous of them that are pensioners.  I pray that they be paid in a value that is commensurate with what value they are expecting or value they paid their insurance premiums. 

          I now turn to automobile insurance.  These people are playing black-jack with people’s monies – those people that are insured on the vehicles that they own; it should not be insurance for premiums in terms of payment of registration of vehicles.  It should not be insurance for anything else but for the benefit of those in the automobiles.  These people, for a very long time, have been moving around unchecked.  As long as you pay third party insurance, it is for the benefit of the insurance company and directors in that insurance company and not for the benefit of the automobile and those that are involved in Road Traffic Accidents (RTA) and for those who are crisscrossing the width and breadth of our roads. 

          We are having five deaths per day due to RTAs.  We are having 43 people injured due to RTA, meaning that there is an accident every 30 minutes and people are maimed every 30 minutes if you do the calculation well.  We are injured and killed on the roads because of the number of automobiles, nature of our roads and natural attrition but to hedge on such occurrences, there is this issue called passenger and third party insurance; I know for a very fact that the Hon. Minister recently or in the 2023 Budget, proposed to take 20% from unclaimed monies that are there in the insurance sector so that he can put it in the Central Revenue Fund or in the unallocated reserves but it is prudent and informed by the fact that there has not been any claims advanced to third party insurance companies because those people are archaic, moribund, rudimental and antiquated.  They are a medieval in their way of operation for a very reason so that they can pocket the monies of the unsuspecting innocent motorist on the road. 

          The current insurance sector and modus operandi is made for the good of the insurance players.  It is made for the good of the directors and that should come to a screeching halt.  I ask that there be compensation in retrospect.  This was mentioned by Hon. Biti.  It is possible if there has not been any insurance or remittances to those that have been injured due to RTA in retrospect; all that money should be given to Government.  It should not be posted by the insurance sector as profit because I have spoken about the way they are dealing with modern day issues as though they are BBC -  they are born before computers.  They are not computerised not because of ignorance but it is for a very reason so that they play naive, arrogant and stupid because they want to play Russian roulette with people’s monies.  Everyday there is a bus accident, Government has to come in and pay for those people that are otherwise insured.

 I have spoken about third party insurance for the small  vehicles - now I come to passenger insurance; there is a seat assuming 75 seater buses, 15 dollars per seat, the bus operator pays about 4000 to 5000 USD as passenger insurance to the insurance sector but come the day of the accident, they are nowhere to be seen; it is the bus operator that has to bring up some mealie meal and some benevolent funds to the family of the bereaved whereas due to that USD15 per seat, there is monies owed to the family of the bereaved, USD 4000 to help in the burial processes and such like to use that as a platform, at least as a safe landing or as a starting point for the family of the dearly departed who was sometime a breadwinner who was a passenger in the public transport.  However, because of that USD15 insurance per seat in that public vehicle, you will find that the insurance players go down under immediately after the bus accident.  They do not even come to say we are the ones that insure Inter Africa.

          Recently, Gen. Maketo passed on who was a best commander of JZM in Chegutu; may his soul rest in peace but it was because of the bus that he was involved in an accident with, with his small vehicle.  There was insurance for both vehicles but nobody has come up to actually say we are going to alleviate the plight of the innocent unsuspecting twins that are still learning at Jameson High School in terms of schools fees.  Of note, he was a big man in the Air force, so everything was taken care of during his burial, including Guard of Honour and there is also a board that has been put in place so that at least the Air Force can take care of the bereaved family.   All that should be done by the insurance sector because the bus was insured, his vehicle was insured but nobody from the insurance sector has come up. 

          Mr. Speaker Sir, I say this with a heavy heart because the insurance sector currently is manned by mafias worse than a cartel of thieves and I would not want to amend this regulation or this Act; I would want him to shred it and start afresh by having people who are prudent and with a reputation in business other than this large number of thieves.

          Mr. Speaker, I have spoken about passenger insurance, now I want to go to air traffic insurance.  According to the international civil aviation organisation, there are about 5 000 airlines globally that are insured.  If we definitely cannot take care of the 1 000 500 vehicles, small little automobile, what more if we have to put on our shoulders the issue of airline insurance, STARR Insurance, these are globally acclaimed aviation insurers and AIG, these are globally acclaimed aviation insurers that insure more than 5 000 airlines globally and of that there is about 1 126, those are the commercial airlines that are insured by these conglomerate of insurers.

          So before we even grow to aviation insurance, we need to be reputable with the small little insurance issues.  The reason why we do not have AIG and we are insuring as Zimbabwe and our aviation sector using international players, it is because we cannot be reputable with the small little duties that we have been given in the insurance sector.  Insurance sector should be the same globally and locally.  The whole reason why we have not been able to insure the aviation sector is because we cannot insure the small little things that we have.

          Mr. Speaker Sir, there are five issues that I want to touch on that speak to and about the issue of the insurance sector that should inform the pricing in the insurance sector, the operation in the insurance sector; there are actually just five issues, if you allow me, the issue that regulates the pricing in the insurance sector is the market unprofitability.  In Zimbabwe, it is the other way round; it is the market profitability that regulates the insurance sector.  The insurer profits in 2020 alone, I speak like this on the global insurance because I talk about the aviation insurance that were not sufficient to make up for cumulative losses of the preceding seven years.  The continued high volume of losses leaves insurer profit vulnerable should there be a catastrophe invades. 

          The second one is the market claims that are supposed to be moving and pushing up the prices.  For the past four years, currently now I think the kombis are supposed to pay about USD70 for the insurance per term and the small little vehicles is about USD40 per term, which is about USD120 per annum.  What informs such issues - in Zimbabwe, currently with a set up of non-regulation of the insurance sector, it is the grid of the players as opposed to the market claims because there are no claims currently.

          The third issue that moves the pricing in the insurance sector should be the market instability.  There is no-one who has seen whether there is stability or there is instability of the market in the insurance sector in Zimbabwe because the current regulation or the current regulator who is IPEC is sleeping on duty.  It is either he is conflicted due to pecuniary interest or we have a square plug in a round hole. 

In my thinking Mr. Speaker Sir, we have Old Mutual and other pension houses; previously we were debating NSSA.  It is my thinking that the Reserve Bank of Zimbabwe (RBZ) should continue to have annual reports from the insurance players – not only IPEC but the insurance players. It is provided for in the RBZ Act that they need to have annual reports from these insurance players.  It should be embedded in that Act that RBZ continues to have annual reports.

Mr. Speaker Sir, the fourth issue that influences the pricing is the insurance capacity.  There is need to see that these insurance houses are both regulated and their capacity is impeccable, flawless and regulated like a bank.  They should not go into the insurance sector to go and make money using the premiums of the insured.

The last and the fifth is the lead and support market pricing – that should inform the pricing in the insurance sector.  I want to thank you for giving me this opportunity Mr. Speaker Sir, to try and match our insurance sector to the global insurers like Alliance Global Corporate and Specialty, that is, AGCS.  We cannot go and become such big time insurance players who are globally acclaimed if we continue to have thieves in large numbers who are riddling our current insurance sector.  There is need to actually sweep out the whole room and put in the right people in the right places.  The current people are square plugs in round holes; we have the wrong people in the right places.

I thank you for giving me this opportunity Mr. Speaker Sir, for vociferously, effectively and efficiently speak about the insurance sector like Mr. Green would have wanted me to come and talk about his insurance; like Mr. Lameck Nyamarango would have wanted me to come; the war collaborator, Madam Sarah Chikukwa would have wanted me to come and talk about her insurance including Tawanda Chitashu, he is a former Army General.  He would have wanted me to come and talk about his insurance.  Thank you.

          *HON. RAIDZA:  Thank you Mr. Speaker Sir, for giving me this opportunity to debate on this important motion.  I want to thank the Second Republic for the vision to take note that what was happening in the insurance sector is not just; things should be sorted out and as Government, to make sure that the country has laws that inspire confidence in investors and also to fulfill the vision that was tasked to the Smith Commission after noting what was happening in the insurance sector.  There were a lot of issues that were recommended by the Commission and these are issues that are going to be sorted out by the laws that we are looking at in this august House.

          The first thing is that when we look at our economy, we will discover that there are regulatory laws that guide industry.  The current law is not strong enough, so this Bill comes at an opportune time because it gives insurance companies the framework that will guide them so that investors or people who invest their money in insurance companies get value for money.  Mr. Speaker Sir, when a person invests in insurance, they anticipate to benefit from it.  In the past, we noted that there are so many unscrupulous activities that were happening and being done by these companies.  They would lure people to invest in their policies and when they approach people, they do so in a flowery language in order to convince clients.  This Bill comes at a quite a opportune time because President Mnangagwa has a Vision 2030 that seeks to bring a middle class economy; and if the insurance sector continues to behave as before, that can work against the vision.

          Mr. Speaker Sir, some of the things that were being done by insurers that should be corrected is that they would bring policy documents written in faint ink and fine print.  In fine print, that is the small letters; there were a lot of hidden interpretations.  For instance, when you have an accident, you go and claim but cannot be covered because there are some issues that you would have missed.  The new law should stipulate that the document be clear and be explained to both parties so that they would be knowledgeable when they commit to the agreement.  In the past, insurers took advantage of clients, which ended up with insurers absconding on their responsibilities; people would not benefit from their investments in insurance.

          The other thing that I like about the Bill is currency conversion which should be in tandem with what is happening in the economy.  No one should lose their money because if you invest your money in USD, then some things happen and people were losing; policy holders were losing.  So Old Mutual, First Mutual and other insurance companies were in business.  It is not clear whether they were also affected and how they were affected.  So the money that they were building and growing their companies with is policy holder money. 

You would find that often times they would give excuses that Government changed currencies and what have you.  All these explanations were being given so that they abscond from their responsibilities.  So, according to the new Bill, the company and the investor are going to benefit equally and no-one is going to be left behind.  This is a good vision for those who lost their money after investing and also for those who are in business.  Insurance companies have been taking advantage of people whilst they were succeeding but now we are moving in the same direction.

The other thing that I want to applaud Government for with the Bill is that there is need for regulation of assets that are insured outside the country.  You would find that insurance companies take USD premiums outside the country and such external investments do not benefit the people of Zimbabwe.  They do not benefit the nation but they are growing foreign economies where these monies are kept yet people struggle to raise such premiums.  Then after paying such premiums, instead of the money benefiting the Zimbabwean economy, it would be benefiting insurers who were externalising these funds.  They would report that things are moving in their companies, however things would not be moving in the Zimbabwean economy.  They do not explain that we took this money to South Africa, London and other nations, so they continue succeeding.

I want to say that this is progressive.  We want the economy and the nation to benefit from insurers because insurance companies Mr. Speaker Sir, when you look at the money that they are collecting, if the money was to be used to improve the economy of our country, it will help a lot in the development of our country. For the past years, many insurance companies were not investing in the country.

They highlighted that it is risky to invest in the country or they will not be able to get profits they expect.  They invested in other countries while they take it from us Zimbabweans. It is only because it is risky to them to invest in the country but it is not risky to collect money from the locals. These are some of the issues which we want to thank Government for.  May this Bill be passed and begin to be used in the country. The operations of insurance companies must benefit the Zimbabweans since they are the ones who are paying the premiums. If the investments are done in Zimbabwe, it encourages people to take policies not what is happening right now that people are undecided when it comes to join insurances. They feel that if they pay premiums, it is like tying your money on a crocodile leg, meaning that you will not be able to recover your money. 

Mr Speaker, this Bill came at the right time so that the insurance sector is brought to order; they must operate like what others are doing in this economy so that we develop our country. We also want to encourage those in the insurance sector to work following the law. They must not fear the law because there is no country which can operate without a law. They must operate within the laws of this country like what everyone is doing. If we leave the sector operating without laws, we will be putting all Zimbabweans at risk. There investment will not be secure. Thank you.

HON. R. R. NYATHI: Mr. Speaker Sir, I also want to add my voice on this Bill in about a minute or two but giving an experience of what has happened before. I had invested my money with several insurance companies and hoping that when I get to the age of 50, I will not bother...

THE TEMPORARY SPEAKER (HON. MUTOMBA): Hon. Member, may you approach the Chair?

Hon. Nyathi approached the Chair.

HON. R. R. NYATHI: Thank you Mr. Speaker Sir. I just want to add my voice on discussion of the Bill that we are discussing about. I was just going to give an experience of what happened when we went through an inflationary period where I was particularly also a member who had invested through several insurances but what then happened is that after the situation, the insurance gurus when they realised that there was going to be a serious inflation – I had invested for more than 20 years. They did a forecast to see that with the inflation that is coming, the pay backs would be too little. It would be too much if we wait to give people their money back. An example of Old Mutual, they gave us some certificates to say, your insurance is now worth $20 thousand and yet when I had invested, I was expecting when I get to the age of 50, 60, I was going to be given 20 thousand which was worth USD20 thousand. The $20 thousand that I was given at that particular time was something equivalent to about $20. Given the passage of time, the $20 thousand was equivalent to USD1. So I think the debate that Hon. Members were giving is vital that the Government must also look into it so that one is able to reap the equivalent of the money that he has invested now for the future. That is one of the things that I think the Hon. Minister, in the consideration of this Bill, is also going to consider that when people invest money or give monies to organisations that money still remains public funds and Government must be concerned and must be serious about it to make sure that our people, especially the poor are not taken advantage of. I thank you Mr. Speaker Sir for giving me an opportunity just to give an example of what has happened in our country during our time. Thank you.

THE DEPUTY MINISTER OF FINANCE AND ECONOMIC DEVELOPMENT (HON. CHIDUWA): Thank you Mr. Speaker and Hon. Members for the contributions. These are critical contributions that are going to assist us in coming up with an effective Bill. I think from the onset, we have said, this Bill should bring sanity to the insurance industry with the aim to protect the policy holders. What is also coming out which is very fundamental is the need to ensure that we bring the Bill at par with international and regional best practices. We are also taking cognisance of the value that this Bill can bring to the development of this country in line with our aspirations as a country.

          Now turning to the submissions by Hon. Mushoriwa, the first submission he mentioned was the issue of definitions. I think it was an issue of significant interest. We have said this is an issue that we can look at. We are still to subject our Bill to the Committee Stage and these are the issues that we are going to relook and see if all the definitions that we have are all embracing. The issue of too much power that is vested in the Minister; I think there is no too much power given but again  this is an issue that we are going to deal with at the Committee Stage. This has also been brought out by Hon. Biti where he said there is need for us to sync all our Bills and the Pensions and Providence Act that we have already passed.

          There is the issue of currency conversions and we are saying currency conversions are also dealt with in detail under Clause 135. If you can check that one and read it together with what we covered under the Pensions and Providence Fund Act, this again is covered. The issue of board members conflict of interests; we are saying we are not going to have any conflict of interest - as you will notice, members with conflict of interest are going to be disqualified. This again is covered.

          On the issue of funds that are invested outside the country; again, this is done under Clause 49 and on that one, there is a certain allowable percentage of what is allowed to be invested outside the country. We have allowed this as part of allowing the insurance companies to diversify their portfolios.

          Then the submissions by Hon. Biti on the issue of pensions, I think it was on loss of value. We have said the issue of loss of value is dealt with again in the Pensions and Providence Fund Act which was recently enacted. Hon. Members, I am sure you remember that we discussed this issue extensively. So this is covered under the Pensions and Providence Fund Act.

          On the qualifications for those who are in the insurance sector, this is a very valid point and we are saying the fitness and probity test requirement is again in the Bill. Even in terms of the Anti-Money Laundering and Financing of Terrorism Act requirements, any criminals will not be allowed in the sector.

          On the separation of assets where we are saying owners are allowed to own pension assets and own assets, there is provision that deals with the separation of assets in the Bill and this is a requirement that IPEC is implementing. On the revaluation of assets and liabilities,  we have guidelines that have been developed by IPEC.

          There is the issue of the definition of a married person which again Hon. Biti brought out and we are saying there is need to redefine what a married person is. There is need to synchronise that with what is in the Marriage Act to avoid suffering. I think we are going back to what Hon. Biti submitted that as we go to the Committee Stage, we need to synchronise what is already in the existing Act and what we are also pushing as Hon. Members. The currency of Zimbabwe and the currency that is agreed upon; currency conversion provision deals with it as it recognises the change of currency to avoid losses and this,  again is an issue that I have alluded to. The procedures are already set out in the Bill and further expanded in the regulation.

          Then the disqualification of directors; we are saying any director with a criminal record and those with known liabilities shall not qualify to hold posts.

          On the regulations by IPEC and Ministers without Parliament involvement, Hon. Members I think you all know that it is the prerogative of the Minister to come up with the regulation. Those regulations will be approved by Parliament. So we need to take into account on this one that we have a symbiotic role where the Minister and Parliament both have a role to play.

          On the issue of policy holders’ interest, the prime objective of the Bill is to protect policy holders’ interest and disclosures are set in the Bill, for example the publishing of financial statements in the newspapers. I think on this one, it is also clear that the policy holders’ interests are also taken care of.

          Hon. Nduna on regulators and players and that they should be people with credibility; on this one we are saying the credibility of the directors also lies with the qualifications that they have and the shareholders are also spelt out clearly in the Bill to avoid conflict of interest or cross directorship. It is an issue that was brought out when we were debating again the Pensions and Providence Fund. We are now having cases of cross directorship and this again is addressed.

          On the loss of value of insurance pension, I am sure you have heard it that this is already covered. Your area of interest which is the road traffic accidents and third party insurance, we had responded to this issue I think at the time we were debating the budget. We said the Ministry made a proposal to take 20% of unclaimed money to save such suffering and currently, the modalities are underway to put in place the National Road Accident Fund and I am sure this is going to address the issues that you raised.

          The issue on pricing framework which you raised, IPEC has developed a product which has got pricing guidelines and that is approved before it is issued in the market. For insurance companies when they have a product, it has to go through IPEC and the pricing guidelines have already been set.

          Going to submissions by Hon. Raidza on criminal activities; On this one, we have got provisions that are dealing with fraud and misrepresentations, which are criminal offences and are provided for in the Bill. 

          You also mentioned the issue of the safeguard mechanisms.  We want to thank you Hon. Raidza for applauding what is already contained in the Bill, which is going to achieve the separation of assets and also the issue of benefits that the economy is going to get from investments that are coming from the insurance companies.

On the issue of annual reports, I would want to submit that the sector is required to submit annual reports to IPEC as contained in the Bill.  He also brought out the issue of evidence of the claims ratio being low in the sector as supported by the loss ratios that are reported annually.  Our response to this is, if there is need for us to look at this, I think that can be done at the Committee stage. 

These are the responses that I have in line with the submissions that have been put forward by the Hon. Members.  We are going to give you an opportunity to propose amendments at the Committee stage.  I therefore propose that the Bill be read a second time.

Motion put and agreed to.

Bill read a second time.

Committee stage:  Wednesday, 1st March, 2023.



HON. R. R NYATHI:  Mr. Speaker Sir, I move that Orders of the Day, Numbers 1 to 17 be stood over until Order of the Day, Number 18 has been disposed of.

HON. TEKESHE:     I second.

Motion put and agreed to.

THE TEMPORARY SPEAKER (HON. MUTOMBA):  Hon. Chinyanganya has written authority from Hon. Dube to stand in for him. MOTION



HON. CHINYANGANYA:  I move the motion standing in Hon. Dube’s name that this House takes note of the Report of the Public Accounts Committee on the Analysis of the Auditor-General’s Report of the Harare City Council.

HON. NDUNA:  I second.



The Public Accounts Committee draws its mandate from Section 299 of the Constitution, which compels Parliament to “monitor and oversee expenditure by the State and all Commissions and institutions and agencies of Government at every level, including statutory bodies, Government-controlled entities, provincial and metropolitan councils and local authorities”

The Public Accounts Committee performs its functions to ensure that Parliament’s role provided for in Section 119 of the Constitution are “upheld and that the State and all institutions and agencies of Government at every level act constitutionally and in the national interest”


The Committee sought to establish the extent to which Harare City Council had addressed audit observations made in the 2020 Auditor-General’s Report by implementing recommendations made by the Auditor-General.  In addition, the Committee sought to establish why Harare City Council is operating without a proper accounting system.


The Committee members invited Harare City Council to a series of oral evidence sessions.  Quill Associates, previous providers of the City’s (Business Intelligence Quotient) BIQ system were also invited to give their evidence before the Committee on why their contract with Harare City Council was terminated prematurely.  This resulted in the City Council operating without a functioning accounting system.


Although Harare City Council had a sound ERP (Enterprise Resource Planning) system in BIQ, Harare City Council had not been doing bank reconciliations since 2015 leading to huge unreconciled amounts.  Not all transactions have been going through the Harare City Council system. To make the situation worse, a fall-out between Harare City Council and Quill Associates led to later prematurely switching off the former and Harare City was left with no sound accounting system.  This led to a lot of anomalies within the council’s operations, most of which were unearthed by the Auditor-General in her 2020 report.


Accounting for Subsidiaries

The Committee noted that International Public Sector Accounting Standard (IPSAS) 6- Consolidated and separate financial statements require the consolidation of all controlled entities.  It was also noted that City of Harare’s wholly owned subsidiaries namely; Rufaro Marketing (Pvt) Ltd, City Parking (Pvt) Ltd and Sunshine Holdings were not consolidated or accounted for.  Access to the identified entities was not granted and the investments in aggregate may be significant and material.  It was also unclear whether all the interests in Sunshine Holdings were known.

City of Harare officials submitted that the set-up was such that subsidiaries were treated as entities outside the City Council.  Harare City Council also had problems accessing information from the subsidiaries which it wholly owns.  The subsidiaries had not been providing audited accounts to Harare City Council since their inception.

Reconciliation of Cash and Cash Equivalents

It was noted that the council’s cashbooks were not furnished for audit.  Cash receipts and payments journals linked to the bank accounts were also not availed.  Reconciliation of bank accounts, ecocash accounts were not updated and proper checking and authorization of the same was not being done.  Some of the bank accounts were not in the accounting system.

The Harare City officials submitted that bank reconciliations could not be done since the BIQ platform could only accommodate 64 cashbooks, some of which were furnished.  It was further submitted that the accounting system was abruptly terminated before all the cashbooks could be extracted.

          Maintenance of Proper Books of Accounts

          In terms of Section 286 of the Urban Councils Act [Chapter: 29:15] and Section 49 of the Public Finance Management Act [Chapter 22:19], council is required to keep proper books of accounts as may be necessary to record matters relating to financial matters of the council. In terms of the International Public Sector Accounting Standard 1; Presentation of Financial Statement, council should fairly present financial information and must faithfully represents its affairs.

          According to council, trade and other payables to the tune of USD$105 542 322 were unverifiable. In addition, trade and other payables totaling USD$83 712 713 had debit balances and should have been reclassified. This suggests that council might have prepaid or overpaid suppliers and has to recover the same.

          Furthermore, in terms of IPSAS 12-Inventories, developed land for resale and treated water should be treated as inventory respectively. The inventory records for the land and water were nonexistent. There was neither presentation nor disclosure to this effect. No land bank records are kept by council which forms the basis for internal control with regard to land sales.

          Harare City Council officials submitted that the relevant responsible department was in the process of creating an up to date land bank register. This process was expected to be completed by 31 December 2022. There was urgency for a well maintained trade and other payables.  Council was in dire need of new Enterprise Resource Planning System which is targeted to eliminate the variances.

          BIQ System

          The Council’s Enterprise Resource Planning system was withdrawn by the service provider and management alleged that the inadequate information furnished in respect of 2018 financial year was recovered from a back up facility. The information could not be validated with the defunct BIQ system and neither could completeness be ascertained. In addition, large volumes of council information were lifted from a supposed back up facility and made resident on unprotected excel formats. This was contrary to Section 45 of the Public Finance and Management Act [Chapter 22:19] which requires, among other things, that employees of public entities ensure that the system of financial management and internal controls is established and implemented.

          BIQ is a system that is meant to provide a solution to all financial accounting, procurement and all other facets of council operations as regards to accounting for transaction that are in the system.

          Harare City Council officials submitted that there was a misunderstanding between the service provider which is Quill Associates and City of Harare that resulted in the switching off of the service on 21st March 2019. The origin of the dispute was the hiking of the licence fees from US$25 000 to US$75 000 and Council was disputing the hike.

          Mr. Van Heerden, the Managing Director of Quill Associates and providers of BIQ system submitted that they engaged Harare City in 2006. What the Harare City Council procured from BIQ was a partial system. Not all the modules were available in the system and over the years, other modules developed.

          He further told the Committee that in September 2018, Quill discussed with the Harare City Information Communications Technology Manager and his staff on all the new major modules that at that stage were available but the city did not have a licence or an agreement with Quill to start using those new modules. Harare City represented by the ICT Manager, indicated to Quill that they would want every new module and every new development in BIQ made available to council. The ICT Manager agreed to have all these new modules and new development but at an increased annual licence fee of US$75 000. The new modules were installed and staff were trained to use the new modules from October 2018 to the end of the year. However, the two parties agreed that from 1 January 2019, licence fees were going to be pegged at US$75 000. An invoice was issued through the Reserve Bank of Zimbabwe in December 2018.

          Upon meeting the Town Clerk on non-payment of the licence fees in March 2019, Quill was asked to uninstall the modules despite council having already started using the modules. They insisted they would only pay US$35 000 per year and not the US$75 000 agreed in the contract. According to the contract, Quill had the right to switch the City off if they could not pay the US$75 000. Therefore, the City Council was switched off. This was not an abrupt termination of the system. The city officials were warned of the dire consequences before being switched off. There were many communications between the parties but the former was not really serious in considering going back to BIQ.

          Harare City officials informed the Committee that SAGE was roped in to replace BIQ. It was submitted that SAGE was contracted at an annual fee of US$300 000 as compared to BIQ’s US$75 000. It was further submitted that SAGE was not functioning and did not have the capacity to handle the huge operations of the city. As a matter of fact, the city was grounded in all aspects.

          Mayor of Harare Mr. Jacob Mafume submitted that there was no need for council relations with Quill to have been terminated or allowed to get to this point because the city council was now in a worse off situation than when it had BIQ.

          He informed the Committee that this has caused problems to policy makers because they relied on that system to monitor the council secretariat and executive. He added that it was part of a very critical monitoring tool to know what the executives and accounting officers were doing. Without an operating system, Harare City Council was flying in the dark. He pointed out that such a situation was letting down the rate payers.

          He further submitted that there was need to come up with a clear solution on the current non-functioning accounting system. He further pointed out that there was need for a way forward to check what could be potentially missing as a result of abrupt switching off of BIQ and also to avoid any hemorrhaging of funds that could continue should the council continue operating without a viable system.

          Mr. Mhukarume, the Finance Director at Harare City indicated that it was an agreed position that the SAGE system that replaced BIQ is not functional and it is a nightmare operating in an environment in this day and age without a proper system.

          He submitted that Harare City was struggling in receipting as it receipts manually. As a result, all receipts were not accurately accounted for. The billing was not being done accurately because SAGE did not have the capacity. In a nutshell, Harare City did not have an accounting system and as just operating on an auto pilot. The procurement was also affected as there was no system being used. At the end of the day, Harare City Council financial reporting was not transparent and that signals failure. Mr. Mhukarume further submitted that the environment currently was a nightmare because the only module which was working was the billing which was operating at 50%.

          Mr. Van Heerden, the Director for Quill Associates informed the Committee that the payroll was adopted on BIQ, however the executive, payroll was not put into the system. This was a red flag signaling something sinister. The executive payroll was substantial. Annual financial statement cannot be produced without the executive payroll being in the system. He further told the Committee that he raised this issue with the Town Clerk but no response was given.

          He further told the Committee that the other critical issue in this whole set up was bank reconciliations. The council at that stage was using 26 different bank accounts for various reasons but the bank reconciliations were never done in the system. The difference between the bank balances were huge and was increasing out of proportion.

          The asset register was never brought into the system properly. None of the capital investment and the infrastructure was ever provided or included in the general ledgers. Yet again an annual financial statement was useless without them.

          The issue of water stock was another red flag. The water stock in Harare City was kept in a separate directive. It was not part of the main stock yet Harare City’s main business was providing water.

          This therefore emphasised to the Committee that considering these items, it means Harare City’s general ledger was impractical. He submitted that the US$189 255 035 mentioned in the Auditor-General’s Report was just a tip of the ice berg given that cash, assets, water stock and executive salaries were not being accounted for.


          Harare City Council officials informed the Committee that the council was now in a tendering process to acquire a new accounting system.  It was further submitted that the Tender Committee led by Mr. Madzokere, the ICT manager, was involved in attending international meetings with some of the bidders.  These meetings’ expenses were being paid for by the bidder.  However, the Committee was informed that it was not part of council policy to receive payment for travel and accommodation from bidders. 

          When Procurement Regulation Authority of Zimbabwe, CEO Mr. Ruswa was engaged by the Committee and he told the Committee that Section 84 (2) of Public Procurement and Disposal of the Public Assets Act, articulates that a contractor shall at its own expense place at the procuring entity’s disposal any premises, facilities for inspection referred to in subsection 1.  The contractor and the procuring entity shall each bear the expenses of the attendance of their respective representatives at inspection referred in the subsection 1.  He informed the Committee that procuring entity bears all inspection expenses.

          Committee observations

          There is no proper accounting system at Harare City and this is causing further financial loss.

          All of Harare City’s problems were centered on the absence of a sound Enterprise Resource Planning system.  In the absence of a proper accounting system, these irregularities will still continue. 

          At the moment, the prejudice of the amounts involved or the amounts lost could not be quantified. A proper investigative audit would help to numerate the amount lost.

          The amount Harare City could have been prejudiced is only a tip of the iceberg and because of the absence of ERP, the amount lost is more than what meets the eye.

          Harare City Council acted suspiciously by engaging incapacitated and expensive SAGE for US$300 000 and leaving BIQ for US$75 000, which was effective and cheaper. 

          Harare City Council is currently incapacitated to effectively receipt and bill residents.

          Harare City Council did not take the matter of abruptly being switched off by Quill Associates to court because they had no case as they were at fault.

          The tender process is hugely compromised when bidders were asked to pay for air tickets and hotel accommodation by Harare City Council.

  Committee Recommendations

-Harare City Council should by 31 January, 2023 engage Quill and reinstall BIQ so that the bank reconciliations could be done and also that US$189 255 035 unverified funds could be substantiated by the Auditor General. 

- Harare City Council should by 31 January, 2023, get a proper accounting system that has capacity to serve the city’s huge figures and curb continued mismanagement of public funds.

-ZACC should by 28 February, 2023, probe Harare City Tender Committee on why they were getting the expenses of their international meetings paid by bidders against Section 84 (2) of Procurement Regulations Act. 

- Harare City Council should from 1 January 2023 and going forward, exercise its powers to audit and access financial statements of all its subsidiaries. The council should consolidate all entities under its control to comply with International Public Sector Accounting Standards.

- ZACC should by 31 January 2023, probe why Harare City led by IT manager Mr. Madzokere cancelled an effective and cheap BIQ system costing US 75 000 and engaged an incapacitated and non-functioning SAGE which was costing US$300 000.


          The Committee expressed dismay on how and why a big council such as Harare City is being run without a functioning Enterprise Resource Planning System.  In this respect, the Committee urgently expects city officials to hastily re-engage Quill Associates for BIQ system to recover funds unaccounted for, restore sanity, transparency and efficiency to avoid continued financial hemorrhage in the city’s operations. 

          HON. NDUNA:  Thank you Hon. Speaker Sir and I want to thank Hon. Chinyanganya for finally tabling this report for the sub-Committee on Public Accounts on Local Government.   Hon. Speaker Sir, the issue as I second this report, it speaks to the pith, the core, and heart of the appointment and the usability of the Auditor General.   Section 309 of the Constitution talks about the functions of the Auditor-General.  Section 310 of the Constitution speaks to and about the appointment of the Auditor-General, it says in sub-section 1, the Auditor-General is appointed by the President with the approval of Parliament.  The Auditor General is an ex-officio Member of Parliament in that her functions are the ones that are the gate-keeping functions of the national pace. 

          Public Accounts Committee and indeed the sub-Committee on Local Government Public Accounts is the gate keeper or is a post audit committee that stops the hemorrhage and the illicit outflows from local authorities.  We are faced here with the credibility of sanctifying and making sure there is sanity in the functions of the Auditor General so that the Auditor General, her functions can be upheld, can be respected and can also see the light of day in terms of their credibility.  For a very long time, we have come and debated time without number about the issues contained in the Auditor-General’s report but again for a very long time, time without number, those issues have been neglected and negated.  Those issues have not been taken on board by the local authorities, State owned enterprises and the ministries that are spoken about in that Auditor-General’s report.  Here is an opportunity Hon. Speaker Sir, to salvage that situation to make sure we bring credibility back to the appointing authority, who is His Excellency the President who has appointed the Auditor-General to supersede and to actually look and interrogate in the manner the Executive and in the manner the local authorities are actually using their funds, whether they are using those funds with probity and with accountability for the good order and governance of the people of Zimbabwe.  Here is an opportunity to salvage that reputation. Here is an opportunity to make sure that we have this metropolitan city governed in the manner that it is supposed to be governed, with probity and a high reputation Mr. Speaker Sir.

Here is an opportunity for Parliament to salvage the opportunity where they had been shooting themselves in the foot.  For a very long time Parliament has not been taking the Auditor-General’s Report seriously because it has not been making sure there is follow up in the implementation and observation of the observations of the Auditor-General as enshrined in the Auditor-General’s report.  Here is an opportunity Mr. Speaker Sir, to speak to the heart of the issues of what is termed the delinquent behaviour that has been pointed to by the Auditor-General.  Mr. Speaker Sir, those were my introductions to seconding this motion.

Mr. Speaker Sir, the expenses of making sure that the Harare City Council is running software which is called an accounting software, the current one or the previous one which is SAGE was three times the amount or more than threefold the amount which they termed an ERP that was designed and that was being run by BIQ of South Africa and it can only be one reason why they terminated that accounting officer for selfish reasons so that they can pilfer whatever it is that is coming into the coffers of Harare City Council to get what they can and can what they get as individuals.

As individuals, the Harare City Council officials have gone on a rampage to terminate the ERP or the accounting software that was run by BIQ according to the Auditor-General in 2019 Mr. Speaker Si, as observed by the Auditor-General, where they have lost more than US$200 million and it is said during oral evidence that this is a tip of the iceberg and this was done for selfish interest so that they can get what they can and can what they get.

The current situation obtaining at the Harare City Council as we speak is that there is clamouring, there is competition to bring in swipe machines of individuals, executives at Harare City Council and Rowen Martin Building so that they can swipe into their own individual accounts the monies and rates for the rate payers of the innocent unsuspecting citizens of Harare Metropolitan City.  This is currently what is obtaining Mr. Speaker Sir and this is what has come out as you interrogated Harare City Council as to why they were operating without an accounting system.

Mr. Speaker Sir, it would be my fervent hope and clarion call that after we debate this report, the termination of the operation of the Harare City Council should definitely come to a screeching halt.  There should be termination in terms of their operation because the monies are not going to the intended destination where the citizens are paying their rates.  Mr. Speaker Sir, as I have alluded to, there is competition to bring swipe machines of individuals to Harare City Council in order that they can cream that money and fatten their pockets.  This is the reason why they have not had a working accounting system.  This is the reason why they terminated ERP and BIQ in settling for a company that is offering the services at three to four fold the amount that they were actually paying to BIQ for the ERP system.

Mr. Speaker Sir, it is with a heavy heart that I stand here and I am hoping I can appeal to your conscience because the institution of Parliament, the credibility is founded on how it is going to act on this report.  Harare City Council, by any stroke of imagination, is so big and has a plethora of revenue streams and if left unchecked, we are going to create a terrorist organisation through Harare City Council because that money is not going for service delivery; it is going to a cartel of operatives whose name is not known.  It is going to fund maybe the issue of drug lords and terrorists.  It is not going for provision of clean, potable water.  It is not going to reduce typhoid and cholera.  It is not going to revamp, rehabilitate, and reconstruct the roads. It is not going to pay the workers of Harare City Council.  It is not going to give good service delivery to the citizens of Harare City Council.  It is going to individual pockets and bank accounts and it is my hope that you hear this clarion call that after this debate, you can actually go to the Minister using this debate that has ensued here and ask the Hon. Minister of Local Government and Public Works to stop approval of the 2023 Harare City Council budget because the budget means allocation of resources, the budget means allocation of devolution funds, but we are putting that money into a bottomless pit whose accountability cannot be assured, whose accountability cannot definitely have safety nets instead of an accounting package.

Mr. Speaker Sir, the ERP we are talking about is tried and tested.  It was the submissions of Harare City Council’s His Worship the Mayor and the Town Clerk that ERP is installed in Bulawayo.  The same ERP is functional at ZINWA.  What would be the reason for terminating such an impeccable, robust, resilient, effective and efficient accounting system, save for selfish reasons?  We have square plugs in round holes that do not want accounting for the salary packages for the executives, that do not want accounting for water and revenue expenses and monies paid for water delivery system.

We have a situation where there is now a cartel that has been formulated.  Mr. Speaker Sir, PRAZ came to this House and actually mentioned that Harare City Council was busy flouting procurement procedures and what a better time to actually stop this terrorist organisation – I dare call it.  Harare City Council is now a tourist organisation where they are channelling the monies we have no knowledge of.  They are flying without a radar and the knowledge of where they are putting rate payers’ monies. 

The issue that Harare City Council is run by an opposition party does not come into play.  This issue is at middle management; the executive is not voted into office but recruited into the organisation.  We have the wrong people in the right places – people who are determined to make sure that they fatten their pockets using rate payers’ money at the expense of service delivery and the monies that are paid by innocent and unsuspecting citizens who are not getting the service for what they have been paying for. 

Your sub-Committee has actually gone further because we now have Commissioner Mlobane sitting in the sub-Committee on Local Government Public Accounts.  We have caused the arrest of operatives at Masvingo City Council and Chegutu Municipality for those that have been selling stands unilaterally without going through the right procedures.  We have caused the arrest of all those people and we have gone further for Harare City Council to make a report at ZACC and it is under RRB003367 to report these executives because we believe this is not an Act of ignorance.  We believe that this is a deliberate act of criminality. 

The Criminal Law, Codification and Reform Act from Section 134 up to 176 speaks to the issues that are embedded in the Auditor-General’s Report in terms of criminal abuse of office and pilferage of these council resources.  We have gone to ZACC and reported this matter and it is my thinking that Parliament parallel process which is rather administrative and a bit on the slothful side can actually have a parallel process of the criminal prosecution when ZACC finally takes this for statutory interpretation to the courts of law.

We have also not only stood by to wait for the report to see the light of day.  We have gone further to engage PRAZ.  It is my feeling and my thinking that with all that we have done, even bring the Auditor-General before this Committee to give oral evidence under oath; it should have been prudent for PRAZ and Harare City Council to force reconstruction of the BIQ system and the ERP so that we have a reason and way to follow up where the US$200 million went to.  It disappeared in two parts – US$83 million and US$125 million.  By any stroke of imagination, this is not a pittance, this is a lot of money. 

We are serious as Parliament to bring Harare City Council and indeed all other local authorities to book so that we can use Harare City Council as an example as to how not to conduct business in council affairs without an operating accounting system.  We should be making an example of this metropolitan city and council.  If Harare City Council gets away with this issue, without being chastised or brought to book before the courts of law, without being criminalised, we might as well close shop at Parliament.  We are here in Harare for your own information; we could be drinking raw sewerage - the reason being that Harare City Council is on auto pilot.  They have no accounting system or any way to account for monies received or way of disbursing any money from any service delivery because of executives who are bent on lining their pockets. 

The budget I have alluded to; the Hon Minister of Local Government should be implored not to approve the budget for Harare City Council until we force reconstruction of this ERP system, accounting software, so that we can get to know how much it is that has been lost beyond the US$200 million that is here. It is my belief that PRAZ, ZACC, Harare City Council and Parliament should force reconstruction.  There should not be socias en el crimen or socius criminus – partners in crime in making sure that the issues of the Auditor General have been upheld.

Section 309 and 310 should be respected.  Section 310 is the appointing authority and Section 116 of the Constitution says who is Parliament – Parliament consists of His Excellency the President and the Legislature.  So let us not undermine our own authority by letting Harare City Council go scot free.  By tonight, all executives at Harare City Council should be incarcerated because of this report and we should throw away the keys.  We should put lions inside that dungeon or prison so that come remand date, they should all have dissipated or have disappeared because they would have been gnawed by the lions.  These people belong behind bars. 

I want to applaud the Auditor-General for bringing out such inconsistencies and it is now upon us as Parliament to give a lending hand and support to the Auditor-General so that there is no repeat of all these delinquent behaviours in the future.  I thank you for giving me the opportunity to support this report.

HON. R. R. NYATHI: I move that the debate do now adjourn.

HON. TEKESHE:  I second.

Motion put and agreed to.

Debate to resume: Wednesday, 1st March, 2023.

On the motion of HON. R.R. NYATHI, seconded by HON. TEKESHE, the House adjourned at Five Minutes to Six o’clock p.m.


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