Insurance, not a business for charlatans- IPEC boss
By Wellington Zimbowa
UPSURGE of bogus claims by policy holders seeking to swindle insurance providers has necessitated a vigorous assessment exercise by the latter, to avert honouring fictitious claims, Insurance and Pension Commission (IPEC) Commissioner Grace Muradzikwa has revealed.
The regulator boss emphasised that the insurance business was hinged on seven cardinal points, including the principle of utmost good faith; hence, there was no room for unorthodox conduct.
Hence, went on Commissioner Muradzikwa at an online 2021 journalists mentorship programme, 20 percent of claims being made were fraudulent.
“Insurance is a business for ladies and gentlemen. Colleagues, allow me to underscore this, I am always reminding people that this is not a business for charlatans.
“The reason why I say it’s a business for ladies and gentlemen is because it is based on utmost good faith,” she stressed.
“When you walk into an insurance company and say you want to insure my house and in my house, I have a plasma TV, I have got this and so son.
“The insurance company takes your word for it, in the first instance. You know what, when insurance started, you didn’t have to bring pictures for assets and so on.
“But increasingly, we have realised that there are now a lot of charlatans. Now, you are finding that insurance now asking for pictures and now have inspectors to come and assess,” lamented Dr Muradzikwa.
Zimbabwe’s Big Brother Africa (BBA) Show representative, Wendall Parson in 2013 was discharged in the courts following allegations of false claim representation for compensation on a vehicle damaged by an accident, after the insurance company accused him of insuring a car when the accident had already occurred.
The steep rise in insurance fraud gave plans to open a dedicated insurance fraud investigation office, Zimbabwe Insurance Bureau as announced in 2018 by the Insurance Council of Zimbabwe.
But efforts to follow up on progress was fruitless as ICZ’s Manager, Marketing and Public Relations; Ringisayi Batisayi’s mobile went unanswered.
Overstating and undervaluing are some of the tactics used in the insurance fraud ploy, although the financial cost so far has not been availed.
Accordingly, peace of mind and financial security and risk transfer are the key objectives of insurance plans.
Insurance is a contract hinged on promissory and guaranteed through premium payment with the goal of pooling resources and transferring risk.
Dr Muradzikwa told the meeting that IPEC was created by a Statutory Act, after noting that self-regulation had failed, in a bid to protect consumers.