09 Apr 2015

Members of Parliament have welcomed the Insurance Industry Bill.

When debating the bill, the Leader of the Opposition and Gaborone Bonnington North MP, Mr Duma Boko, said the penalties proposed were punitive adding a fine of “not less than P100 000” was open for abuse and let alone open for corruption as any amount could be announced.

He asked the Minister of Finance and Development Planning, who presented the bill, if they did any calculations before arriving at the amount saying it was more like driving the insurance companies out of business.

Gaborone Bonnington South MP, Mr Ndaba Gaolathe, said the policy should protect policy holders. He said a number of Batswana were not financially literate and coupled with the complex insurance industry, a number of them felt cheated when they were about to receive their benefits.

Mr Gaolathe said there should be a mechanism, a window to provide assistance to locals about insurance products. He further said the insurance industry was complex requiring tremendous expertise.

This therefore means the micro prudential framework could assist professionals and also assist investors as they would know what they sign up for, he said . The legislator was also concerned that many of the insurance companies are owned by foreigners, with little participation by citizens.

He said companies should be forced to reserve at least 10 per cent of their shares to local investors adding citizen ownership enhances profitability and sustainability. For her part, Mahalapye East MP Ms Botlhogile Tshireletso said people sign up for insurance but at the end of the day discover they have a raw deal as they get less than what they expected.

She called for protection of policy owners saying at times some lose a lot especially when they terminate their policies before they mature due to financial constraints. Shoshong MP Mr Dikgang Makgalemele also called for protection of policy owners and was also concerned that many companies are owned by foreigners.

Responding to the comments, Minister Matambo said already, Non-Banking Financial Institutions Regulatory Authority (NBFIRA) has embarked on public education as they have been on national radios.

NBFIRA, the minister said, can take an insurance company to task where it is proved policy holders have been swindled. He further said it was up to the courts to decide on the amount of the fine.

Meanwhile Minister Matambo said the government was to establish the Financial Services Ombudsman where people aggrieved by financial institutions could launch their complaints.
The Bill has moved to Committee Stage where some amendments in the clauses are expected from both the minister and the MPs. ENDS