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Namfisa slaps industry with N$1,5 million penalties

THE Namibia Financial Institutions Supervisory Authority (Namfisa) has levied N$1,5 million worth of penalties to the non-banking financial sector for the 2021 financial year.

These penalties were levied on late submission of actuarial valuation reports and industry returns amongst other things.

They are included in the income earned by the regulator for the year – which stood at N$223 million. The regulator mainly earns its income from levies charged on industry players, which has brought in N$210 million

The million-dollar penalty figure is a big jump from the N$382 000 levied during the 2020 financial year and comes at the time when the industry is rocked by non-compliance issues.

Namfisa regulates pension funds, medical aid schemes, the stock exchange, unit trust entities, as well as long- and short-term insurance players.

According to the 2021 annual report, the industry still has unruly players breaching good corporate governance and actively engaging with directors with known conflicts of interest.

In some cases, Namfisa said it has uncovered that there are pension funds whose liabilities had exceeded assets, implying that some pension funds could not pay out members on time.

Other concerning cases included entities that are found to be operating at profitability ratios below acceptable norms, holding of excess cash, and running portfolio investments, not in line with regulations.

Namfisa said over the financial year, the regulator received over 1 050 complaints, across all the industries, with common complaints being consumers told to sign blank or incomplete documents, as well as not being informed well on the specific financial benefit or product offered.

In many cases, the regulator said there was an information asymmetry between consumers and financial service providers, and service providers delayed assessing and finalising claims. The non-banking financial sector is also said to be rocked by poor customer service.

At the end of 2020, Namfisa was overseeing an industry worth over N$341 billion, spread over 10 414 different financial institutions and intermediaries.

For the financial year ending March 2021, the regulator posted a surplus of N$6 million. Expenses stood at some N$218 million with salaries and wages being the lead expense at N$162 million.

The regulator’s assets stood at N$319,9 million, mainly edging up due to a N$55 million ease recognition.

The fund and board this year reappointed the current chief executive office Kenneth Matomola, who is set to be in office until 2026.

At the annual report launch, Matomola said the industry’s balance sheet maintained a financially stable position and continued to grow its assets despite challenging economic conditions.

He added that the agency also stood by its mandate in ensuring that consumers of financial products were protected, and by the regulator’s intervention, about N$2 million was paid back into consumers’ pockets, at no cost to them.

Furthermore, the chief executive said in the pursuit of ensuring a smooth transition from a compliance-based to a risk-based integrated legislative framework, the Namfisa and financial institutions markets bill were signed off by the president earlier this year and now await publication in the Government Gazette.

Matomola emphasised that the two pieces of legislation aim to strengthen Namfisa’s enforcement powers, issue standards, and consolidate and harmonise the laws regulating financial institutions, financial intermediaries, and financial markets in Namibia.

“Once the Financial Institutions Markets Act is published in the Government Gazette, the authority will commence with formal consultations with the industry on the subordinate legislation, i.e. regulations and standards,” he said.

The regulator’s annual report is available on its website for further review.

Email: bottomline@namibian.com.na

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