Zim dollar conversion rate mulled

THE Government has commissioned a study to determine a fair value that insurance firms should pay to clients to compensate for the money they contributed during the Zimbabwe dollar era.

Finance Minister Tendai Biti said during a question and answer session in the House of Assembly on Wednesday the study will establish the rate to be used by the insurers.

He said the Government was also mulling a legal instrument compelling the insurance firms to comply with the results of the study.

Gokwe MP Cde Dorothy Mangami (Zanu-PF) had asked Minister Biti on the policy regarding the conversion rate of the Zimbabwe dollar on pension schemes for insurance companies that they undertook during the use of the local currency.

Minister Biti said during the hyperinflation era, short-term and life insurance policies had lost value.

Most insurance firms, particularly Old Mutual and Zimre, he said, hedged themselves against hyperinflation through the purchase of assets and massive investment in capital markets.

The companies invested a lot on the Zimbabwe Stock Exchange.

"So, when we had hyperinflation, there was a collapse but these insurance companies did not offer adequate compensation to the falling value," said Mr Biti.

"What we have done as Government is to commission a study through Apec, the insurance regulator. They have appointed actuaries to determine the values of those policies in the post-dollarised environment.

"The report will recommend the conversion rates. The report will also look at the assets of these insurance companies in order to see which ones we are going to monetise to compensate insurance funds."

Responding to another question, Minister Biti said he was still considering recommendations made by the Zimbabwe

Revenue Authority on the appointment  of a substantive Commissioner General.

Bulawayo South MP Mr Eddie Cross (MDC-T) had asked him when he will appoint a substantive boss at Zimra.

"It's a complicated matter," said Minister Biti.

"The board made recommendations and as minister I am still considering the recommendations, but it is also a matter that our principals are dealing with."

Mr Biti said the appointment of the Zimra boss was a sensitive issue.

Responding to yet another question, Minister Biti said Zimra had powers to auction cars or any goods after importers fail to comply with importation regulations.

Nyanga South MP Mr Willard Chimbetete (MDC-T) had asked why Zimra auctioned cars of Zimbabweans who failed to pay duty.

Minister Biti said it was a requirement in terms of Section 39 of the Customs and Excise Act for every importer to make entry of goods at the time of importation or in the case of goods to be removed to some licensed premises or bonded warehouses within 10 days of importation.

"Failure to make entry of the goods may cause the goods to be conveyed to a State warehouse," he said.

The goods will be kept in the State warehouse for 60 days to allow the importer to regularise papers failure of which they will be sold through a public auction.

Minister Biti said the Reserve Bank of Zimbabwe can no longer be involved in quasi-fiscal activities and as a result it no longer owns Carslone Pvt Ltd, a mining firm in Kwekwe.

He said creditors of the company were free to make claims using the Companies Act.

Minister Biti was responding to a question from Kwekwe MP, Mr Blessing Chebundo (MDC-T), who wanted to know how the central bank will help workers at Carslone who were left unpaid when the firm  folded.