Namfisa Denies Shutting Down FIS

THE Namibia Financial Institutions Supervisory Authority has denied accusations that it is trying to shut down FIS Life Assurance Company, and said it is merely ensuring the insurance company complies with laws and regulations.

The regulator also denied trying to revoke FIS’ insurance licence, stating that there are no moves to shut down FIS. “We are only interested in ensuring compliance with the law in the interest of the policy holders and FIS”.

Namfisa spokesperson Isak Hamata said their mandate is to protect policy holders’ interests and to ensure a well-regulated industry.

“This is exactly what Namfisa did throughout all the regulatory interventions it took to date to address the continuous non-compliance by FIS,” he said.

The Namibian has, however, seen Namfisa’s letter to FIS, written last month, informing the company that it had 30 days from 14 May, to make its presentations and establish why the regulator should not strip it of its licence to operate as an insurance company.

The letter dated 14 May 2014, was titled: “Notice of the Registrar’s intention in terms of section 17(11) of the long-term insurance Act, No. 5 of 1998 to cancel FIS Life Assurance Company Ltd’s registration in respect of funeral insurance business”.

According to the letter, the regulator accuses FIS of providing disability cover as well as life insurance when it was not authorised to do so. The letter also states that Namfisa had during last December rejected FIS’s application to offer disability benefits and life insurance cover.

The letter further states that FIS was instructed to stop offering said benefits as of 6 December 2013. The insurance company was allegedly also instructed to inform its clients that it has stopped offering such benefits and products.

In response, FIS accused Namfisa of shifting the goalposts and giving conflicting instructions. FIS lawyer Richard Metcalfe wrote to Namfisa, stating that FIS is “respectfully in a state of utter confusion as to what Namfisa desires from our client.”

The confusion stems from the fact that, according to Metcalfe, Namfisa has all along been instructing FIS to pay out disability claims and that the regulator knew that FIS was offering disability cover to its clients.

He said his client has been paying out disability claims for 10 years, and that apart from instructing FIS to pay out disability cover, Namfisa was, in 2010, informed by FIS that the disability cover is treated as an “accelerated funeral benefit”.

This is a benefit, which allows a part of the benefits to be paid out when a member is declared disabled, with the rest of the policy paid out upon death.

Metcalfe further said when Namfisa gave instructions to stop offering disability and life cover, the company had received 141 disability claims from the Ministry of Defence and had 54 claims pending.

He said his client had requested for guidance on what to do with the remaining unpaid claims but the regulator never responded to that request.

The issue of FIS allegedly unlawfully offering its clients disability and life cover was one of the contentious issues between the company and Namfisa while it was under curatorship between November 2012 and December last year when the High Court lifted the curatorship.

The curator, however, applied for a licence for FIS to offer disability and life cover, in an attempt to appease the regulator. The regulator rejected the application in December last year.

Hamata also added that the High Court’s decision to lift the curatorship does not necessarily mean FIS was given a clean bill of health. He added the court lifted the curatorship because it was the court’s opinion that keeping the company under curatorship would serve no purpose.

Source : The Namibian