Insurance industry launches charter

By Lekopanye Mooketsi
Correspondent | Monday September 19, 2011 00:00

 

The ICB - which represents most of the country's insurance houses, brokers, agents and other stakeholders, launched the charter at the end of a two-day conference held in Gaborone.

The Charter comes as the insurance industry and the Non-Banking Financial Institutions Regulatory Authority (NBFIRA) tighten professional standards in line with international best practice and in recognition of the critical responsibility borne by the sector.

Speaking at the Council's gala, Trade and Industry Minister, Dorcas Makgato-Malesu, expressed her gratitude for the values that the organisation has embraced, which she said are based on principles of ethical behaviour, high professional standards as well as consumer education and protection. 

The minister pledged that government would always encourage and support an industry that promotes and upholds high standards of integrity, business capability and good corporate governance.

'It is our expectation that the insurance industry will act in the best interests of the customer while subscribing to the desired standards of behaviour, good qualifications, competence, accountability and discipline,' said Makgato-Malesu. 

'Emphasising on professionalism will lead to better outcomes for the customer, improved standards of risk management and a more confident and trusted insurance profession.'

Makgato-Malesu noted the high number of complaints from members of the public regarding pensions and insurance, pointing out that most of these were from a lack of understanding of the industry. She added that in addition, some customers had unreasonable expectations while in other instances, the service providers were guilty of unprofessional conduct.

The minister also highlighted the information gap between retail financial services, consumers and financial institutions. Financial institutions have more expertise and resources available to them in designing, distributing and servicing financial products than consumers in making decisions about financial transactions, she observed.

'This imbalance means that the financial services' consumer is particularly vulnerable to unfair treatment. However government has put in place measures to curb and prevent exploitation of consumers in general,' she said.

'I am aware that the NBFIRA, amongst others, is there to address complaints from aggrieved consumers of financial products.'

Makgato-Malesu added that the ICB's commitment to consumer education and protection was also welcome, stressing that clear fairness outcomes were however the preferred goal.

'I appeal to ICB members to honour representations and assurances that could lead to legitimate customer expectations,' she said.

According to the minister, the recent global credit crunch starkly illustrated the grim consequences of shortcomings in the global financial architecture resulting from lack of value based principles and application of good corporate governance standards. 

'Therefore, it is important that as an organisation, you must continue to work towards restoring and maintaining public trust and confidence,' she said.

The two-day ICB conference gave an overview of the economy while also providing a platform for discussions on economic diversification and the insurance industry's vision for economic recovery.