How does PIA protect insurance policy-holders?

ONE of the functions of the Pensions and Insurance Authority is ensuring the protection of insurance policy-holders and pension scheme members.
This is achieved through prudential supervision of the regulated entities and to which the aspect of market conduct supervision is equally handled.
Today’s column will focus on how insurance policy-holders can be protected. This follows some questions the authority has received, on how this is done.
Supervision of regulated entities involves effective assessment of how the entities (insurance companies, brokers, etc) are managing the conduct of insurance business and to a large extent how these entities are attending to their customers (who are actual policy-holders or other beneficiaries under those policies). The authority also takes keen interest in its supervision to assess and approve the products that the insurance entities are developing and the processes in which these products are being presented to the public.
Licensing of insurers
Any person or company dealing in insurance business is required to apply for a licence from the authority before engaging in insurance business. The licensing is a rigorous process, which affords the authority to assess persons or companies wishing to engage in insurance business. Depending on this assessment, applicants are given or denied the licence.
Reviewing and approval of insurance products
Aside from issuing licences, the authority also reviews products that insurers launch on the market through a process known as ‘file and use’ approach. In general, the authority reviews products for compliance and considers, among other things, policy limits, coverage of specified risks, policy wording and absence of discriminatory exclusions. Before marketing any product, the insurer must demonstrate to the authority that a diligent review of the product in relation to its business model is up to speed: for instance, is it a sustainable product? Are the distribution methods suitable for the product?
Selling of insurance products
Insurance companies, brokers and agents must promote products and services in a manner that is clear, fair and not misleading. It is for this reason that the authority reviews the information provided in insurance policy wordings to ensure that the expected benefit is clearly spelt out and insurers do not hide or camouflage important statements or warnings. The information should also be easily understandable.
Customers should be appropriately informed before and at the point of sale. As such, insurance practitioners, whether in insurance companies, agents or broking business, are required to meet the minimum qualifications and experience as part of the licensing requirements set out by the authority.
Servicing of insurance policies
As part of ongoing supervision of insurers, the authority monitors the conduct of business with regard to policy servicing, in particular the provision of ongoing information to policy-holder, handling of policy-holder claims and complaints. Insurers are also expected to provide evidence of cover (which must include the full policy wording documents) immediately after inception of cover. This is critical in minimising complaints when claims arise. Information needs for policy-holders differ depending on the type of insurance product. While there may be specific generic information, policy-holders are encouraged to take an interest to understand all terms and conditions as set out in the policy wordings.
Insurance companies must have policies and processes in place to handle claims in a timely and fair manner. Claimants must be informed about the claims processing procedures including the time frames for claims payment. The authority reviews these procedures when conducting on-site inspections to ascertain whether they are followed when handling claims.
In discharging this function through the above processes, the authority is aware of the conduct of business requirements that may be set out by other financial sector regulators; namely the Bank of Zambia and the Securities and Exchange Commission. To effectively co-ordinate its efforts with these other financial sector regulators, the authority signed memorandums of understanding (MoUs) with these institutions. Insurance, being not only an important socio-economic safety net aimed at cushioning any future risks to the members of the public, is a business that may affect its consumers in various ways. The authority also signed an MoU with the Competition and Consumer Protection Commission, which has an overarching mandate on issues of competition and consumer protection.
Below are some steps you should take when making claims:
• Ensure that all documents for the contract of insurance are available.
• Ensure that all procedures for claims reporting claims are followed.
• When not satisfied, follow the insurers complaints handling procedures.
For more information, queries and concerns regarding pensions and insurance, contact the Pensions and Insurance Authority (PIA) on 0211-251008. Email:, you can also visit our website:

Facebook Feed