HARARE – MDC vice president and former finance minister Tendai Biti is suing First Mutual Holdings Limited demanding his retirement package amounting to $15 million.
The insurance company had said it would only pay him what was agreed upon attaining his retirement age of 60.
Biti said in 1993, while he was a partner in the law firm called Honey and Blanckenberg, his pension contributions were with his consent converted by First Mutual into an annuity policy.
“The annuitisation phase commenced with a payment of ZW$15,648.04 and the written projection given by defendant (First Mutual) was that upon attaining the retirement age of 60, plaintiff would be paid a capital value of ZW$4,133,593 and an annual pension of ZW$782,066.47 giving a total assured sum of $15 million,” said Biti in summons he filed with the High Court.
The Harare East lawmaker said in breach of the agreement between the parties and taking advantage of the changes in currency that occurred in 2009, First Mutual Holdings unilaterally claimed that as at March 2009, the value of Biti’s policy was US$196 and US$327 as at December 31, 2015.
“In terms of the purchasing power parity theory which constitutes an integral tacit term of the insurance relationship between the parties, plaintiff (Biti) is entitled to a payment which preserves and reflects the total value by which he was insured,” reads the summons.
Biti said First Mutual Holdings has refused to uphold heir agreement prompting him to approach the court.
First Mutual is yet to respond.
If Biti succeeds, the case could open floodgates of claims against insurance firms.