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Zimnat would like to clear the air and give accurate information with respect to Diaspora Funeral Cash Plan (DFCP) policies. The background to this are the recent media reports surrounding changes to the above existing policies.

The relationship between Zimnat and Destiny Financial Services T/A as DFCP
Since January 2012, Destiny Financial Services has been an appointed agent of Zimnat Life Assurance for the DFCP product with the primary mandate to promote, market and extend the sale of funeral cover plans to Zimbabweans in the diaspora through online channels for a commission. To this end and in line with insurance laws, Zimnat operated and continues to operate as the underwriter. An underwriter is a registered life office whose primary responsibilities are to assume the insured risk against payment of the applicable premium, issue policy documents, maintain the policy and settle claims from policy holders in line with the terms and conditions of the product. The relationship between the client and the underwriter begins the moment a policy application has been accepted and a policy document has been issued, subject to payment of premiums.

The Nature of the DFCP Product
DFCP is a long-term funeral cover where one pays premiums for twenty years (20) and is covered for the rest of their lives after the premium paying period. An important point is that premiums must be paid consistently to maintain cover. A lapse will occur where a policy holder fails to pay premiums for a consecutive period of three (3) months. If a policy lapses, unfortunately, all benefits under the policy are lost.

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The insurance industry in a highly regulated industry. The DFCP product is registered, as is required by law, with the Insurance and Pension Commission (IPEC) of Zimbabwe and the exchange control division of the Reserve Bank of Zimbabwe (RBZ). IPEC, the insurance regulator in Zimbabwe, and RBZ, have approved the issuing of policies in foreign currency for Zimbabweans living in the diaspora. These policies shall be maintained and paid out in foreign currency.

The migration of policies to another insurer
The DFCP policy is a contract between the policy holder and the underwriter. Both the policy holder and underwriter have to agree to a migration of the policy to another underwriter or to any material change of the products or its terms and conditions. A third party, such as a marketing agent like Destiny Financial Services, has no power to migrate a policy to another underwriter or otherwise change the product or its terms. Zimnat has not moved or authorised the movement of policies or contract to any new provider or underwriter.

Security of funds against currency and country risk
Due to the prevailing macro-economic environment in Zimbabwe and upon the request of Zimnat, RBZ has granted authority to ring fence funds related to DFCP for investment offshore. This guarantees the ability of Zimnat as the underwriter to settle claims in the currency contracted.
Further to this it is important to underscore the security of policy holder funds with Zimnat for the following reasons:

• Zimnat is a leading financial services brand in Zimbabwe
• Zimnat is in partnership with Sanlam, which is the largest non-banking financial services company on the African continent
• Zimnat has a Global Credit rating of A-
• Zimnat works with the best local and global reinsurers available
• Zimnat employs and has access to the best actuaries in the world

Zimnat responses to some specific allegations made through the media

1. “The currency volatility in Zimbabwe is very bad for long term investments like DFCP…… adoption of RTGS as the official currency wiping off people’s USD savings, investments and policies.”

Our Response

o IPEC and the Reserve Bank of Zimbabwe (RBZ) have given authority to ring fence funds related to DFCP for investment offshore with a view to guarantee the ability of Zimnat as the underwriter to settle claims in the currency and to the value contracted.
o The Government of Zimbabwe has been unequivocally supportive of diaspora related products. Circular 13 of 2019 from IPEC dealing with the authority to offer selected insurance policies in foreign currency, coming after the gazetting of Statutory Instrument (S.I) 142 Of 2019, gives provisions to this effect.
o As a policy, Zimnat engages internationally reputed Re-Insurers to carry any risk that Zimnat cannot carry, including but not limited to currency related risk. In simple terms, Zimnat has in place sufficient protections to guarantee the settlement of all DFCP claims in foreign currency.

2. “Policy holders lost money on Gadziriro (“USD” Funeral cover)”

Our Response

o Gadziriro (“USD” Funeral cover) is a local product. As promulgated by Circular 13 of 2019 from IPEC dealing with the authority to offer selected insurance policies in foreign currency, coming after the gazetting of Statutory Instrument (S.I) 142 of 2019, existing foreign currency- denominated products (like Gadziriro) shall run to their natural expiry. Claims will be settled in the contracted currency.

3. “Zimnat Life operates 100% in Zimbabwe and invest in bond notes/ RTGS”

Our Response
o Zimnat is part of the Sanlam group, which is the largest non-banking financial services company on the continent, with a footprint across 33 countries and has over 90 operating businesses in Africa and Asia. Our investment portfolio is likewise diversified into different investment locations, investment types and investment currencies.

4. “Zimnat Is Refusing to be dropped as an Underwriter”

Our Response

o It is not possible to drop an underwriter from an insurance policy or contract. The alleged dropping of Zimnat as an underwriter by Destiny Finance is a non-event.
o Zimnat cannot stop a non-exclusive agent like Destiny Finance from engaging an underwriter of their choice, particularly to sell new business. However, Zimnat as a responsible financial services provider with a fiduciary responsibility to policy holders, has an obligation to all existing clients to give them sound financial advice. Zimnat also has an obligation to support existing policy holders in their decision making with regards to their policy.

o In this instance, our existing policy holders stand to potentially lose in the event of lapsing their policy. It is not possible for Destiny Finance to transfer the Zimnat Life policy to another insurer. It is therefore incumbent upon the policy holder to satisfy themselves as to the terms and conditions of any prospective new policy on offer. Zimnat is available to provide clarity, support and any other services that might be required by its clients.

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