Pensions and Insurance Regulatory Framework review cheers PIA’s Tresford Chiyavula

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Pensions and Insurance Regulatory Framework review cheers PIA’s Tresford Chiyavula 

By Derrick Sinjela and Ashton Kelly Bunda

PENSIONS and Insurance Authority (PIA) Acting Registrar
of the Pensions and Insurance Authority,
Tresford Chiyavula conceded that it has not been easy to have frequent physical interactions with the media due to the Covid-19 pandemic.

And responding to a Zambian environment of high income inequality, high unemployment and high poverty, Acting Registrar Insurance Namakau Ntini said the revised guidelines are a recognition that there is need to increase the uptake of insurance in Zambia.

Meanwhile, PIA Acting Deputy Registrar Pensions Goodson Kapaso said the increase of investment in private equity from 5 to 15 percent of its fund size entails that an insurance company can invest into a private entity that is not listed on the Lusaka Stock Exchange.

Mr. Chiyavula is grateful for media support rendered consistently by media reporting on pensions and insurance matters.

In a PIA Media Briefing on Wednesday 26th May 2021, Chiyavula look forward to continue working with the media in disseminating information relating to the pensions and insurance industries.

Chiyavula alluded to developments in the pensions and insurance regulatory framework, namely; the Pension Scheme (Investment Guidelines) Regulations, S.I. No. 50 of 2021, the Insurance (Fidelity Fund) Regulations, S.I. No. 38 of 2021
The Insurance Act No. 27 of 1997 (as amended by Act No.26 of 2005), under Sections 109, 111 and 113, and the 2021 Insurance Act

On the Pension Scheme (Investment Guidelines) Regulations, S.I. No. 50 of 2021, Chiyavula
backed revision of the Pensions Scheme Investment Guidelines (S.I 141 of 2011) through the issuance of The Pension Scheme (Investment Guidelines) Regulations, S.I. No. 50 of 2021 by former Finance Minister, Dr. Bwalya Kanyanta Ng’andu on Wednesday 12th May 2021.

“Pension Funds play a pivotal role in a country’s development and in contributing to economic growth through providing financing to productive investment activities,” admonished Chiyavula, citing removal of minimum limits on collective investments schemes and corporate bonds.
Chiyavula
appreciated that ‘Private Equity’ rose from 5% to 15%, with property rising from 30% to 40%, plus indirect investments in property such as collective investment schemes and equity.

“Pension Schemes are not allowed to invest in derivatives, hedge funds or any other speculative investments except for risk management purposes only,” noted Chiyavula.

Accordingly, Chiyavula says the Insurance (Fidelity Fund) Regulations, S.I. No. 38 of 2021
The Insurance Act No. 27 of 1997 (as amended by Act No.26 of 2005), under Sections 109, 111 and 113 confers powers on the Minister, by Statutory Instrument, to establish an Insurance Fidelity Fund and to prescribe regulations with respect to the administration, management and application of the Fidelity Fund for the purpose of indemnifying or otherwise protecting policy holders and other persons interested in the policies prejudiced by the inability of an insurer carrying on business in Zambia, to meet its liabilities.

Chiyavula is delighted that on Thursday 6th May 2021, former Finance Minister Dr. Bwalya issued the Insurance (Fidelity Fund) Regulations, Statutory Instrument
No. 38 of 2021 (“the Regulations”).

Ms. Ntini noted that the uptake of insurance has been low with an increase from 2-point 8 percent in 2015 to 5 percent in 2020, which she said is still low.

Mr. Kapaso said the introduction of Supranational bonds to enhance more diversification for the pensions schemes is progress as these are bonds issued by entities owned by more than one country such as the World Bank.