2014 annual report - Namibia Financial Institutions Supervisory

NAMFISA
2014
NAMIBIA FINANCIAL INSTITUTIONS SUPERVISORY AUTHORITY
ANNUAL REPORT
THE AUTHORITY’S
CORE FUNCTION
The Authority exists to supervise financial institutions
and financial services and to advise the Minister of
Finance on matters relating to financial institutions and
financial services in terms of the Namibia Financial
Institutions Supervisory Authority Act No. 3, 2001.
Core Function 1:
Supervision
To supervise the business of financial institutions
and financial services.
Core Function 2:
Advice
To advise the Minister on matters related to financial
institutions and financial services.
MISSION
NAMFISA’s mission is to effectively regulate and
supervise financial institutions and to give sound
advice to the Minister of Finance.
VISION
NAMFISA’s vision is to be a respected regulator
of the financial sector that fosters a stable and safe
financial system contributing to the economic
development of Namibia.
VALUES
We value integrity.
We are committed to teamwork.
We drive performance excellence.
We passionately serve.
Leadership Creed
for NAMFISA
We are committed to teamwork
• We create a conducive work environment.
• We have a shared urgency to achieve our vision.
• We support each other and are collectively
responsible for our actions.
We passionately serve
• We provide quality service.
• We deliver on our time commitment.
• We are courteous and professional in all our
dealings.
We value integrity
• We act with honesty, fairness and transparency.
• We treat all information confidentially.
• We are trustworthy, act independently and
consistently.
We drive performance excellence
• We commit to regulatory and supervisory
excellence.
• We commit to operational excellence.
• We commit to the highest standards of
performance.
NAMFISA Board
Mr Kenneth S. Matomola,
Mr Bonifatius K. Paulino,
Assistant Chief Executive
Officer: Supervision
Assistant Chief Executive
Officer: Support Functions
VACANT
Board Secretary
Ms Lovisa IndongoNamandje,
General Manager:
Supervisory Support
The Board
Members
FLTR: Mr Bonifatius Konjore - Member, Mr Simeon Amunkete - Member,
Ms Estelle Tjipuka - Chairperson, Mr Gersom Katjimune - Vice-Chairperson
Ms Malverene Theron - Member
Ms Brenda Esterhuyse,
General Manager:
Insurance Division
H. Alberto
Manager: Complaints
Mr Cletius Simasiku,
Manager: Risk and
Internal Audit
Vacant
Manager: Inspections &
Anti-Money Laundering
J. Uusiku
Manager: Long-term Insurance
Mr Petrus Kafidi,
General Manager:
Information and
Communication
Technology
VACANT
Manager Information
Communication Technology
VACANT
General Manager:
Finance & Administration
C. Von Wielligh
Manager: Finance
D. Pokolo
Manager: Short-term Insurance
NAMFISA Board & CEOs
T. Mashozhera
Manager:
Medical Aid Funds &
Friendly Societies
R. Louw
Manager: Pension Funds
Ms Rachelle Metzler,
Acting General Manager:
Investment Institutions
2
Mr Phillip N. Shiimi,
Chief Executive Officer
Mr Bonifatius K. Paulino,
Assistant Chief Executive
Officer: Support Functions
H. Chikoto
Manager:
Analysis & Prioritisation
E. Buys
Policy Advisor: Capital
Markets & Collective
Investment Schemes
Vacant
Policy Advisor: Pension
Funds, Medical Aid Funds &
Friendly Societies
M. Likukela
Policy Advisor:
Credit Agreements
I. Shebo
Policy Advisor: Insurance
VACANT
Project Manager
VACANT
Project Manager
VACANT
Project Manager
R. Metzler
Manager: Microlending &
Credit Agreements
Ms Erna Motinga,
General Manager:
Research, Policy
& Statistics
Assistant Chief Executive
Officer: Supervision
Mr Absalom Kapenda,
General Manager:
Strategic Projects
VACANT
Manager: Capital Markets
J. Naanda
Manager: Collective
Investment Schemes
Mr Kenneth S. Matomola,
J. Vermaak
Manager: Contracts
Mr Isack Hamata,
Manager: Corporate
Communications &
Consumer Education
VACANT
General Manager:
Human Resources
R. Jessen
Manager:
Human Resources
Mr Cornelius Verwey,
Head: Legal Services
C. Potgieter
Legal Advisor
VACANT
Legal Advisor
E. Ndauendapo
Legal Advisor
NAMFISA Management
Ms Maria NakaleGaomas,
General Manager:
Provident Institutions
3
4
Foreword by the Chairperson
07
Review by the CEO
11
Governance15
Composition of the Board
17
Attendance of Board Meetings
18
Attendance and activities of Board Committees
18
Board Training and Development 19
Management21
Offices and Divisions22
Strategy and Performance35
Strategy36
Performance for 2012/201337
Priorities for 2013/201442
Support Functions45
Consumer Education51
Regulatory Reform Update57
Supervisory Developments69
Industry Review83
Investment Institutions84
Provident Institutions90
Insurance100
Statistics105
Long-term Insurance106
Short-term Insurance108
Medical Aid Funds111
Retirement Funds114
Unit Trusts115
Investment Management116
Capital Markets117
Microlending118
Complaints119
Financial Statements for the
year ending 31 March 2014
121
Glossary of Terms155
Table of Contents
Table of Contents
TABLE OF
CONTENTS
5
Foreword by the
Chairperson
Foreword by the
Chairperson
6
FOREWORD
BY THE
CHAIRPERSON
7
The Authority regulated a
sector that is significant by any
measure and is comprised of a
number of different institutions
and intermediaries.
As at 31 December 2013, the
number of regulated entities
was as follows:
Type of Institution
Number of
Institutions
Long-term Insurance
Companies (Intermediaries)
17 (2 265)
Short-term Insurance
Companies (Intermediaries)
13 (572)
Medical Aid Funds-active
Pension Funds-active
9
113
Collective Investment Schemes
13
Investment Managers
33
Microlenders
281
Stock Exchanges
1
Stock Brokers (exclude sponsors
of SB)
4
Friendly Societies
2
Total
486 (2 837)
FOREWORD BY THE
CHAIRPERSON
8
Equally, I express sincere appreciation to my predecessor, Mr
Rick Barmenas Kukuri, who has ably led NAMFISA out of
murky waters. Although the vision is far from being attained,
I am happy that under his leadership NAMFISA has made
considerable progress in its reform efforts. The past four years
were equally challenging as they were rewarding.
Foreword by the
Chairperson
Foreword by the
Chairperson
I start this review of the previous year’s work by expressing
appreciation to the Minister of Finance, Honourable Saara
Kuugongwelwa-Amadhila for the trust and confidence she
has bestowed on me when she appointed me Chairperson of
the NAMFISA Board. NAMFISA is central to the economic
success of Namibia and as such I am humbled to have been
chosen among many equally deserving Namibians to lead this
institution and to make NAMFISA a respected regulator at
home and abroad.
Our strategic goal is to become a respected regulator that
fosters the soundness of financial institutions, ensure market
integrity, maintain financial stability and protect consumers as
well as maintain confidence in the financial system. In support
of that goal, we initiated several reform initiatives anchored by
a three-year rolling strategy.
As a Board, we are driving the reform process from a difficult
past to a future filled with promise and expectation. Our
resolve continues to create an environment of financial safety
and stability and to offer protection to the users of financial
products and services. My expectation is that, taken together,
all these should result in economic development and prosperity
for our people through deliberate financial inclusion initiatives.
My colleagues on the Board and I have reflected on what has
been done thus far in aid of the reform agenda and what we
could do differently and better in future.
Therefore, the Board has recommended the drafting of a threeyear rolling strategy with specific targets. One of the main
strategic objectives is the drafting of Regulations and Standards
to support the implementation of the FIM, NAMFISA and FSO
Bills, when they are promulgated by Parliament.
9
Our work in 2013 underscored the transcendent importance of
accelerating the completion of the process related to the FIM,
NAMFISA and FSO Bills, and accompanying subordinate
legislation. This is vital in giving the financial environment
a different, positive complexion that addresses the needs of
present day Namibia. In addition, these modern laws will also
give impetus to the implementation of the Namibia Financial
Sector Strategy (NFSS), the country’s long-term development
strategy for the Namibian financial sector.
I am proud that we have sensed the need for change and that
we have acted with flexibility and agility to meet the multiple
challenges of the financial landscape.
We expect the following year to continue to present similar
challenges thus the Board’s strategic focus is to be forever
vigilant to meet the demands of Namibia’s dynamic economic
environment. The Board aim to position the right people in the
right place at the right time, and remain relevant and valuable
to the Authority’s various stakeholders.
Looking to the future, my optimistic disposition is that
NAMFISA will succeed in making Namibia’s financial services
industry work for all stakeholders.
Once again, I would like to thank the Minister, my fellow Board
members as well as the CEO and his staff for the unwavering
support and the commitment to take NAMFISA to greater
heights. Together we shall have no reason not to succeed in
making the Authority a respected regulator, both locally and
internationally.
Estelle Tjipuka
Review by the CEO
Review by the CEO
10
REVIEW
BY THE CEO
11
As at 31 December 2013, the
assets of, and assets managed
by, financial institutions, size of
the capital markets and loans
disbursed by microlenders
relative to the gross domestic
product (GDP) of Namibia, were
as follows:
Financial
Institutions
31-Dec-13
Assets (N$
million)
% of GDP
Long-term
Insurance
36 424
10.5
Short-term
Insurance
3 461
1.0
Medical Aid Funds
1 002
0.3
105 267
30.3
37 267
10.7
Investment
Management
123 322
35.5
Microlending
2 616
0.8
18 729
19 077
15.6
15.9
347 165
289.2
Pension Funds
Collective
Investment
Schemes
Financial Markets:
-Local market
capitalisation
-Local debt Issued
Total
Note: The total assets in the financial sector regulated
by the Authority amounts to N$178 899 million
compared to the figure of N$347 165 million (in table
above) which includes significant overlap where,
for instance, investment managers manage assets of
Pensions Funds. The nominal Gross Domestic Product
was recorded at N$120 058 million.
REVIEW BY THE
CHIEF EXECUTIVE OFFICER
Our three-year rolling strategy ensures that we focus holistically
across all key areas of the Authority’s mandate. During the past
four years, and indeed during the financial year under review,
we have achieved much in our quest to transform the Namibia
Financial Institutions Supervisory Authority (NAMFISA) and
have delivered commendably to our stakeholders.
12
This expectation from stakeholders provides the impetus and the
motivation for us to continue growing the Authority in terms of
reach and quality of service. In so doing, we are marching towards
attaining our strategic targets and making NAMFISA a respected
regulator that fosters confidence in the financial industry and
offers protection for consumers.
During the reporting period, NAMFISA has continued
strengthening its regulatory and supervisory approaches, using
of technology and human resources, based on a thorough selfassessment of current policies and practices. The Authority has
engaged in a deliberate process to enhance its ability to fulfill its
mandate of supervising the business of financial institutions and
financial services totaling across approximately 3500 entities and
individuals conducting financial services, businesses in Namibia,
and to advise the Minister of Finance on matters related to financial
institutions and financial service.
Ongoing supervision of regulated entities was strengthened
through the issuance of directives to correct anomalies in the
market, and by continuing the gradual transition from rule-based to
risk-based supervision. Through all these, the Authority continued
its zero tolerance for non-compliance as supported by relentless
implementation of our supervisory ladder of intervention.
During the year under review further saw the continuation of
work continued in the area of developing subordinate legislation to
support NAMFISA and Financial Institutions and Markets (FIM)
Bills upon promulgation. We anticipate good progress with the
drafting and advancement of these pieces of subordinate legislation.
Our dialogue with regulated entities continued under the remit
of fostering understanding, cooperation and promoting the
common purpose of financial stability. Several industry forums
were conducted by the various divisions and in the same vein, high
level stakeholder engagements were held between the principals of
these entities and I. I must mention that we at the Authority are very
pleased with the very positive feedback received through surveys
and congratulatory messages by regulated entities on our activities.
The roll out of our Electronic Regulatory System (ERS) continues
to be work in progress. The benefits of this technology are already
showing through greater efficiency in our regulatory and supervisory
processes. In the same vein, NAMFISA introduced a Service Level
Commitment (SLC) in respect of the financial services industries
that fall within the regulatory ambit of NAMFISA.
The purpose of this is to firmly commit to service excellence and
efficient turn-around times in our engagements with the regulated
entities. Enhancements to the NAMFISA website have also made
it easier for the regulated entities and the public to access the
information about the Authority.
NAMFISA is achieving excellence and international
recognition on the quality of reporting of its
activities and the industries it regulates and
supervises. Below is the PMR award for best
annual report for 2013 received from the PMR
Africa awards.
We strive to develop a strong culture which is based on conducting
ourselves with integrity; being responsive and respectful;
taking pride in our achievements; being open and friendly and
encouraging diversity; building relationships based on trust; and
fostering great teams. Ultimately NAMFISA, and by extension
the stakeholders we serve, must be equipped with a highly skilled
and innovative workforce. In pursuit of that goal, NAMFISA has
continued to expose its staff to a range of training interventions
and growth opportunities.
I am indebted to, and very proud of, this team of dedicated,
energetic and committed individuals who have worked with
renewed commitment to support me and ensure that we achieve
our strategic objectives.
As we face the future, I expect the workload to increase in volume
and complexity, particularly in the face of the enactment of the
FIM, NAMFISA and Financial Services Ombudsman (FSO) Bills.
Considerable work has gone into finalising the process of having these
Bills promulgated. Our expectation is that these Bills will become law
in the current financial year. A mammoth task rests on our shoulders
to ensure not only the implementation of the Bills but also to inform
and educate the stakeholders on their contents. This will be a key
focus area in terms of our consumer education engagements.
Finally, I must thank the Honourable Minister of Finance, Mrs
Saara Kuugongelwa-Amadhila, her very committed and able team
at the Ministry of Finance and the NAMFISA Board for their
unwavering commitment and support towards the attainment
of the Authority’s Vision. I must also sincerely thank regulated
industries and individuals for understanding and co-operating
with the Authority, despite the tough stance that the Authority had
to take on numerous occasions. This is a clear indication that the
majority of regulated entities support our humble efforts to instill
confidence in our market and ensure protection of consumers of
financial markets.
I look forward to our collective efforts continuing to make a lasting
contribution to the orderly functioning of our markets, financial
services consumer protection, financial stability and economic
well-being of our country.
PMR Award
Review by the CEO
NAMFISA is in an evolving phase and evolution is about growth
and expansion in order to be well positioned to deliver on its
mandate. NAMFISA has the responsibility to ensure that it has
the necessary arsenal in place to respond to the current and future
demands for growth and development. That includes adequate
financial and competent human capital, systems, processes and
other means required to carry out its duties that commensurate
with all stakeholders’ expectations. Our stakeholders measure our
progress in many ways and we must constantly ensure that we meet
their expectations consistently and sustainably. We are measured
on the effective and efficient supervision of financial institutions,
financial prudence, employee engagement, impact of our work on
consumers and society and stakeholder satisfaction.
13
Dear Mr Shiimi,
I am very impressed by NAMFISA’s achievements under your leadership
since you took over as CEO and congratulations for winning the PMR
award. In fact, if you look at the requirements for the type of regulators
we need to have by 2030 (Vision 2030), NAMFISA is closer to achieving
the targets ahead of time. Although there are many facets to being a
successful leader, the key attribute which must be cultivated at all times
is trust, and I have no doubt that under your leadership, the missing link
(trust) between NAMFISA and the industry has been restored. I must also
commend your management and staff for the just-in-time quick response
to our queries and professional manner in which they have been attending
to our applications, data requests and queries.
Keep up the good work my boss and continue to build trust with the
industry and also trust in God and you will lead us far.
Regards,
Phillip N Shiimi
Chief Executive Officer
Martin Mwinga,
Chief Executive Officer, First Capital Treasury Solutions (Pty) Ltd
14
This section outlines the corporate governance
activities for the year under review and how the
Board executed its fiduciary duties in pursuit of the
Authority’s mandate and objectives.
The Board upheld good corporate governance
principles as required by the NAMFISA Act of 2001
and best governance practices.
The Authority is governed by a Board, appointed
by the Minister of Finance in terms of the NAMFISA
Act, 2001. The Act confers on the Board overall
responsibility for: the management, control of the
Authority’s affairs, the exercise of powers conferred
and the performance of duties imposed on the
Authority by the NAMFISA Act 2001 or any other law.
Governance
Governance
GOVERNANCE
15
Eagle’s Viewpoint
16
The Board is responsible for strategic direction and control of
the Authority by ensuring that decision and actions taken are
based on values underpinning good governance. The Board
reviewed the Authority’s strategic objectives and a three-year
rolling strategic plan was approved. The plant set out the annual
strategic initiatives that management are expected to deliver on
for the next financial year.
The Board held six meetings and major resolutions during
the year under review were as follows:
The Board has five non-executive members and the Chief
Executive Officer of the Authority attends the Board meetings
but as an ex-officio with no voting rights. The Board exercises
its oversight through three principal committees. The term of
the previous Board members ended on 31 October 2013 and a
new Board was appointed on 03 November 2013 for the next
three years.
The Board members from 01 April 2013 to 31 October were
constituted as follows:
The Board members from 03 November 2013 to 31 March
2014 were constituted as follows:
Mr Rick Kukuri - Chairman | Term expired
Mr Titus Ipumbu - Vice-Chairman | Term expired
Ms Estelle Tjipuka - Member | Re-appointed
Mr Heinrich Nashenda - Member | Term expired
Ms Malverene Theron - Member | Re-appointed
Ms Estelle Tjipuka - Chairperson
Mr Gersom Katjimune - Vice-Chairperson
Ms Malverene Theron - Member
Mr Bonifatius Konjore - Member
Mr Simeon Amunkete - Member
• reviewed institutional performance and structure;
• reviewed NAMFISA/CEO performance for the previous year
and further reviewed and approved the CEO performance
contract for 2013/2014 at the beginning of the year;
• provided input and approved the NAMFISA and FIM Bill
implementation plan;
• approved the land acquisition for NAMFISA’s own building; and
• approved Audited Annual Financial Statements within the three
months as per the requirements of the NAMFISA Act, 2001;
• reviewed organisational structure and staffing levels.
Governance
Governance
The Authority recognises that good corporate governance is
the cornerstone for the regulator to regulate and supervise by
fostering consumer protection and financial stability within the
financial sector. The Authority believes that maintaining good
governance practices will enhance its reputation and enable it
to carry out its mandate as conferred by the NAMFISA Act.
Composition of the Board
17
The Board
Members
FLTR: Mr Bonifatius Konjore - Member, Mr Simeon Amunkete - Member,
Ms Estelle Tjipuka - Chairperson, Mr Gersom Katjimune - Vice-Chairperson
Ms Malverene Theron - Member
Attendance of Board Meetings
Appointment and Remuneration Committee
Legal and Compliance Committee
The Board held six meetings during the year, two meetings were
special Board meetings, and were attended by Board members
as indicated below:
During the year, the Appointment and Remuneration
Committee was comprised of Mr T. Ipumbu, (Chairperson)
and Ms E. Tjipuka (Member), Special Advisor and after
subsequent changes to the Board new members were S.
Amunkete (Chairperson) and M. Theron (Member) as well as
members of management.
Legal and Compliance Committee (LCC) consisted of Ms
M. Theron (Chairperson) and Mr T. Ipumbu (Member), and
after Board changes, the Chairperson remained and the new
committee member, Mr G. Katjimune came on Board and
members of management.
DATE
R. Kukuri
T. Ipumbu
E. Tjipuka
H. Nashenda
M. Rittmann
19 April 2013
Attended
28 June 2013
Not attended
09 August 2013
20 September 2013
DATE
E. Tjipuka
G. Katjimune
M. Theron
B. Konjore
S. Amunkete
12 February 2014
20 March 2014
The committee considered salary increases, performance
incentives and the Job Grading for new General Manager
positions and made recommendations to the Board as required.
The committee also recommended approval of the adjustments
to the organisational structure that the Board approved during
the year.
The committee held three meetings during the year:
DATE
Attendance and activities of Board
Committees
• reviewed, considered and recommended the Authority’s
budget for 2014/2015 and annual financial statements for
approval by the Board;
• approved the annual internal audit plan for 2013/2014 and
received risk management reports, audit reviews and ad hoc
investigations from internal audit for their consideration;
• reviewed progress reports on the implementation of the
Electronic Regulatory System (ERS) Data Upload Project and
debt collection process for the long outstanding levies, and
• considered a new proposal for the land acquisition of the
NAMFISA Property.
Governance
DATE
DATE
DATE
The committee held five meetings during the year of which two
were special meetings to deliberate on the above matters:
DATE
E. Tjipuka
H. Nashenda
21 June 2013
01 August 2013
Not attended
After new Board members were appointed:
28 January 2014
06 March 2014
13 March 2014
Attended
Not attended
Attended
Not attended
M. Theron
G. Katjimune
The
committee
held two meetings
during 2013/2014:
S. Amunkete
Attended
Not attended
M. Theron
Board Training and Development
As part of the Authority’s continuous education, training and
development for Board members on matters relevant to the
Authority, suitable training needs shall be organised in the next
financial year to adress skill gaps.
During the year, the Board members only attended Board
induction training where NAMFISA’s activities were presented
to the new Board. The new Board members were also formally
introduced to the Minister of Finance.
Attended
DATE
07 March 2014
T. Ipumbu
05 March 2014
After new Board members were appointed:
12 December 2013
M. Theron
25 July 2013
Not attended
Audit and Risk Committee
The committee dealt with the following matters during the year:
Special Advisor
Attended
• Audit and Risk Committee;
• Appointment and Remuneration Committee; and
• Legal and Compliance Committee.
• The committee considered the legal matters against NAMFISA,
• NAMFISA and Financial Institutions and Markets (FIM) Bill
Implementation Plan; and
• The committee also discussed the progress in the various
cases the Authority is engaged in litigating.
• Financial Services Ombudsman (FSO) Bill
G. Katjimune
B Konjore
Governance
18
E. Tjipuka
02 & 06
August
2013
The Board carried out its responsibilities and exercised its duties
and powers through the following principal committees:
During the year, the Audit & Risk Committee consisted of Ms
E. Tjipuka, (Chairperson) and Mr H. Nashenda (Member),
and subsequently new Audit & Risk Committee consisted
of G. Katjimune (Chairperson) and B. Konjore (Member)
and members of management, external auditors and internal
auditors.
T. Ipumbu
The committee reviewed the following matters during the
meetings set out below:
19
Management
The Authority is managed on a day-to-day basis
by the Chief Executive Officer who is the Registrar
in terms of the various laws that the Authority
administers. The Executive Management consists
of the Chief Executive Officer, two Assistant Chief
Executive Officers, General Managers and the Head
of Legal Services.
Management
20
MANAGEMENT
21
OFFICES AND DIVISIONS
In addition, the following Committees were
established to assist the office of the CEO
specialised technical functions:
Office of the Chief Executive Officer
The Chief Executive Officer (CEO) together with two Assistant
Chief Executive Officers (ACEO) guides the strategic and
policy direction within the Authority and presides over
organisation’s regulatory and supervisory operations. This
leadership is provided to accomplish the regulatory and
supervisory objectives conferred on the Authority by the
statutes administered by it.
In performing its role, the Authority does the following:
• advice to the Minister of Finance and the Board,
• ensures that regulatory and supervisory decisions are
unassailable and taken timely
• establishes institutional capacity to enable the Authority to
carry out its functions effectively and efficiently.
of Finance and State Owned Enterprises Government Council
(SOEGC) risks are within the organisation are managed well;
relevant legislation is complied with; relevant technology and
processes are in place; Authority staff is approximately skilled;
stakeholder relationships are effectively managed; relevant and
up-to-date policies are in place; and the Authority employs
best governance practices. In short, the CEO’s responsibilities
are to ensure the Authority carries out its functions.
Executive Committee (EXCO):
The CEO is supported by two (2) Assistant CEOs, Board
Secretary, Internal Audit and Risk, Board Secretary, Corporate
Communications & Consumer Education and three Executive
Assistants.
Licensing and Litigation Committee (LLC):
This Committee is chaired by the CEO and consists of selected
General Managers and Head of Legal Services. The Committee
considers applications for the approval or registration of
financial institutions and intermediaries. It also considers
litigation by, or against, the Authority and recommends
appropriate action.
Risk Management Committee (RMS):
Procurement Committee (PC):
This Committee is chaired by the General Manager of Finance
& Administration or his/her delegate and it is composed of,
Legal Officer, One (1) Manager as designated by the CEO,
Accountant, Manager: Corporate Communications, a person
that may be co-opted by the chairperson based on his/her
special knowledge or expertise. Such a person may only sit for
a specific tender or meeting of the committee.
The Committee was established to offer support to the strategic
procurement function of the Authority. The primary purpose
of the Committee is to review and evaluate all submissions by
the departments for the procurement of goods and services
that are in excess of N$30,000, and to recommend the most
appropriate service provider based on price, quality, service,
stock availability and references.
Office of the CEO
This committee is chaired by the CEO and consists of the General
Managers, Internal Audit & Risk Manager, Board Secretary and
Corporate Communications Manager. The Committee assists
the CEO in identifying and managing risks within the Authority.
The Committee is chaired by the ACEO: Support Functions
and consists of the General Manager: ICT, ICT Manager, one
representative from each of the NAMFISA divisions and any
other person who may be co-opted by the Executive Committee
or the CEO. The Committee is responsible for assisting the Office
of the CEO with the following: Endorse the implementation
of IT services related projects; endorse the identification of
information security risks; promote information security
practices in business units and advice whether security initiatives
meet the business objectives.
CEOs
The CEO is responsible for implementing the strategy set by the
Board and, amongst others, ensures that: proper accounting
records are kept and audited; financial statements and a report
on the activities of the Authority are submitted to the Minister
This Committee is chaired by the CEO and consists of the
ACEOs and General Managers and Head of Legal Services.
The two managers for Internal Audit & Risk and Corporate
Communications & Consumer Education Departments
attend by invitation. EXCO’s three arms (Operations, Strategy,
Supervision) implement the Authority’s strategy, monitors
organisational activities and manages risks.
The IT Steering Committee (ITSC):
22
23
Chief Executive Officers
FLTR: Mr. Kenneth S. Matomola, Assistant Chief Executive Officer: Supervision,
Mr. Phillip N. Shiimi, Chief Executive Officer,
Mr. Bonifatius K. Paulino, Assistant Chief Executive Officer: Support Functions
Office of the CEO
FLTR: Marvelous Ngarizemo, Laura Moncho, Cletius Simasiku, Salome Auchas, Bonifatius Paulino, Mr. Phillip Shiimi, Uaatjo Kaurimuje, Roelien Klazen, Kenneth Matomola, Isack Hamata, Josephine Hamunyela
Human Resources Division
The Finance and Administration Division provides the required
support to the organisation to ensure that the Authority achieves
its strategic objectives. The division reports to the ACEO Support
Functions. The Finance and Administration Division manages
the finances of the Authority and ensures the proper accounting
of its funds. It also provides general administrative services to
the Authority. One of the key responsibilities of the Division
is to ensure that annual financial statements are compiled and
audited in line with international best standards and practices.
The Division employs twenty staff in varying capacities.
The Human Resources Division is charged with ensuring that
the Authority is able to attract and retain competent staff. The
Division is also responsible for the human resource policies
of the Authority. The Division also co-ordinates the training of
employees in accordance with the training plans. Performance
management is another important function. The Authority
uses the balanced scorecard methodology to agree and measure
performance and achievements of strategic goals. The Division has
six staff members all headed by the Human Resources manager.
Finance and Administration
Finance and Administration Division
Human Resources
24
25
Finance and Administration Division
FLTR: Charlotte von Wielligh (Finance Manager), Ronelda Davids, Cetric Kozonguizi, Adelheid Nekundi, Susan van Rooi, Benjamin Ashikoto, Jeremia Nakathingo,
Lahja Hipondoka, Ivan Kaura, Johanta Vermaak (Contracts Manager),
David Uuyuni, Maleni Shikongo
Human Resources Division
FLTR: Maudy Damon, Faith Damases, Hilja Katshuna,
Rosa-Karien Jessen (HR Manager), Nicolette McLeod
Information Technology Division
Supervisory Support Division
The Information Technology Division is responsible for
acquiring, deploying, administering and maintaining appropriate
information systems, as well as to manage the ICT infrastructure.
The Department has five IT specialists and one business analyst.
It is headed by the General Manager (ICT).
The supervisory Support Division comprises two departments,
namely Consumer Complaints and Inspections and Anti-Money
Laundering (AML). The Division reports to the ACEO supervision.
The functions of the Divisions are to receive and resolve
complaints lodged by consumers, and to conduct specialised
inspections and investigations into the conduct of financial
institutions, as well as to ensure that registered financial
institutions comply with AML legislation.
The objective of the Inspections and AML Department is to
conduct specialised inspections/investigations into the affairs
of financial institutions at specific request. In addition, the
Department works closely with the Financial Intelligence Centre
(FIC) at the Bank of Namibia to ensure that registered financial
institutions comply with the Financial Intelligence Act, 2007,
and that the Authority fulfils its functions as a supervisory body.
The total staff complement of the Division is 12, headed by the
General Manager (Supervisory Support).
Information Technology
Consumer complaints received by the Authority are analysed
by the Complaints Department. In resolving the complaints,
the Department consults with or interviews the complainants,
supervisory divisions and the legal division. The objective is to
resolve all complaints satisfactorily and expediently.
Supervisory Support
26
27
Mr Petrus Kafidi,
General Manager: Information and
Communication Technology
Information Technology Division
FLTR: Jacobina Newaka, Pascal Haingura, Julia Nambili, Petrus Kafidi,
Venessa Tjizumaue, Kapurua Tjipura
Ms Lovisa Indongo-Namandje,
General Manager: Supervisory Support
Supervisory Support Division
FLTR: Hilka Alberto, Shirley Doeses, Simeon Shaanika, Marina K. Ishidhimbwa,
Zanne Prins, Lucia Paulinus, Lovisa Indongo-Namandje, Nolan Swarts,
Corrie Olivier, Njeri Mwangi, Ndahafa Nikodemus, Imba Petrus, Gillian Pickering
Legal Services
Provident Institutions
While the division itself cannot initiate legal proceedings in a
court of law, it gives briefings and support to legal practitioners
to initiate and sustain proceedings. These proceedings involve,
amongst others, curatorship of financial institutions and civil
action against the Authority. The Authority is also involved in
proceedings before the Appeal Board.
The Division is headed by the Head (Legal Services), assisted
by three (3) legal advisors and two (2) secretaries. While
the two legal advisors are responsible for giving advice on
regulatory, supervisory and litigation matters, the head has
overall responsibility for the division.
The Division is charged with the supervision and regulation
of pension funds, friendly societies and medical aid funds and
reports to the ACEO Supervision.
The Provident Institutions Division consist of the Pension
Funds, Medical Aid Funds and Friendly Societies departments.
The Departments are charged with ensuring that registered
financial institutions are able to meet their obligations to their
members. This is achieved through off-site surveillance, industry
review and on-site inspections to assess whether financial
institutions comply with the relevant statutes (Pension Funds
Act of 1956, Friendly Societies Act of 1956 and Medical Aid
Funds Act of 1995) and are managed prudently. The Division
has 15 staff members headed by the General Manager and two
departmental managers for Pensions Department, and the
other for Medical Aid Funds and Friendly Society Department.
Legal Services
The Authority’s Legal Division is responsible for: providing
advice to the Board, the CEO’s Office and the Supervision
Divisions on all financial laws administered by the Authority or
any other law; ensuring that the Authority defends or opposes
litigious actions against the Authority; and to initiate litigation
where necessary in a court of law or proceedings; enabling the
Authority to better regulate financial services or enforce its
powers in supervising financial institutions. The Department
reports to the ACEO Support Functions.
Provident Institutions
28
29
Mr Cornelius Verwey,
Head: Legal Services
Ms Maria Nakale-Gaomas,
General Manager: Provident Institutions
Legal Services
FLTR: Elaine Claasen, Cornelius Verwey, Hitjiua Tjiho, Shireen Strauss,
Charlene Potgieter, Tamani Ndauendapo (Front)
Provident Institutions Division
FLTR: Silas Naobeb, Martha Mavulu, Aune Emvula, Saltiel Shino, Hendrik Nkole,
Ryan Louw, Eben Basson, Maria Nakale-Gaomas, L’oreal Tjiueza,
Teopolina Ndakolonkoshi, Christopher Swart, Selma Mapira,
Christiaan Beukes, Tafadzwa Mashozhera
Insurance Division
Investment Institutions Division
The Division is charged with the supervision and regulation
of long-term and short-term insurers, reinsurers, brokers and
agents. The Division reports to the ACEO: Supervision.
The Division’s focus is the regulation and supervision of
the stock exchange, stockbrokers, investment managers,
management companies, trustees of unit trust (or collective
investment) schemes, microlenders and other providers of
credit within the ambit of the Usury Act, 1968. The Division’s
functions is to protect the users of financial services and to
ensure confidence in the financial and credit markets by:
protecting investors and credit receivers, ensuring fair, efficient
and transparent markets; and reducing systemic risk.
The Division consists of the Short-term and Long-term Insurance
Departments. The aim of the Division is to protect insurance
policyholders. This is achieved through off-site surveillance,
industry review and on-site inspections to assess whether financial
institutions comply with the relevant statutes (Short-term
Insurance Act of 1998, Long-term Insurance Act of 1998) and is
managed prudently. The Division is currently staffed by 16 people
including a General Manager and two (2) departmental managers;
one (1) for Long-term and the other for Short-term Insurance.
The Division consists of the Capital Markets Department, Collective
Investments Department and Microlending Department.
The Capital Markets Department is responsible for the
regulation and supervision of the Namibia Stock Exchange and
stockbrokers, investment managers, management companies
and trustees of unit trust schemes. The Department carries
out the responsibilities in the context of several laws: the Stock
Exchanges Control Act, 1985; the Unit Trusts Control Act,
1981; the Financial Institutions (Investments of Funds) Act,
1984; and the Inspection of Financial Institutions Act, 1984.
The Microlending Department is responsible for the regulation
and supervision of microlenders and other providers of
credit (for example, hire purchase outlets). The Department’s
responsibilities are carried out in terms of the Usury Act, 1968
and the Inspection of Financial Institutions act, 1984.
Insurance
The Division has a total staff complement of 18 staff including
two (2) managers.
Investment Institutions
30
31
Ms Brenda Esterhuyse,
General Manager: Insurance Division
Ms Rachelle Metzler,
Acting General Manager:
Investment Institutions
Insurance Division
FLTR: Ananias Shaanika, Donovan Pokolo, Anna Amutenya-Uugwanga,
Giselheid Strauss, Cynthia Katjivirue, Paulina Ndokosho, Suoma Kapadhi,
Frieda Ipinge, Christel Roos, Brenda Esterhuyse, Michelle Bamm, Samuel Zeraua, John Uusiku, Ben Muhaindjumba, Leevi Itembu
Investment Institutions Division
FLTR FLTR (Back row): Ewaldine Gertze, Siyabonga Madonsela, Johannes Naanda, Gabriel Indombo, Jacqueline Kamukuenjandje, John Siseho, Alfred van Rooi,
Rachelle Metzler
(Front row, Full body image): Valentine Nghipandua, Sandra Tsuses, Kennedy
Johannes, Lucrecia Lombardt, Precious Lubinda, Beata Shaanika, Marion Kaita
Research, Policy and Statistics Division
The Division reports to the ACEO Supervision and has the
policy framework and statistics as its main focus of attention.
The Division is staffed with six (6) people consisting of the
General Manager, three (3) Policy Advisors, one (1) Manager
and Secretary.
The Projects Office is headed by the General Manager and
assisted by three (3) Project Managers (to be recruited) and
is established with the view to re-align and consolidate these
ad hoc activities whilst ensuring focus within the different
functions. This re-alignment will enable NAMFISA to continue
providing excellent regulatory services to the financial services
industry whilst the reform processes are ongoing.
The Office is expected to function as:
• Prioritisation center for urgent ad hoc projects;
• Linkage between the different divisions within the
organization and outside service providers;
• Determining the needs of the various divisions and
evaluating these needs;
• Sourcing for the adequate service providers to provide the
solutions to the needs; and
• Evaluating the implementation and effectiveness of the
solutions provided.
Research, Policy
and Statistics
The policy framework focuses on policy development
and documentation and ensuring that the regulatory and
supervisory framework conforms to international best practise,
principles and standards. Periodically, the division provides
statistical and informational reports.
Strategic Projects Office
Strategic Projects
32
33
Mr Absalom Kapenda,
General Manager:
Strategic Projects
Ms Erna Motinga,
General Manager: Research,
Policy & Statistics
Research, Policy & Statistics Division
FLTR: Hugh Chikoto, Lealani Van Wyk, Mally Likukela, Erna Motinga,
Edmund Buys, Irene Shebo
Strategic Projects Office
Absalom Kapenda
Quote from
Namibian SUN article
on NAMFISA
“The high number of complaints against financial services
providers is a matter of concern to the authority. A large
number of Namibians are fragile in terms of financial literacy
and income levels. This illustrates why financial regulatory
and supervisory reform is urgent in Namibia, especially the
promulgation of the NAMFISA and Financial Institutions and
Markets (FIM) Bills,” the regulator said.
With regard to the two Bills, the institution said both are
expected to be promulgated in 2014, after two years of drafting
and consultation.
“The drafting of and subsequent protracted stakeholder
consultations on the Bills have occupied much of the authority’s
time over the past two years.
This was to ensure that all the stakeholders understand and
appreciate the intent and purpose as well as implications of the
new law,” NAMFISA said.
“Once promulgated, the new laws will provide NAMFISA
with stronger and comprehensive enforcement powers against
institutions that are found to be in contravention of these laws.”
Strategy and
Performance
Strategy and
Performance
34
STRATEGY AND
PERFORMANCE
35
CONGRATULATORY
MESSAGE
“I hope this finds you well and looking forward to a very
productive year ahead. I really have to compliment you
and your team for the manner NAMFISA is revolving.
We are seeing a new and active NAMFISA. For once
you are fully engaged with the industry with regular
consultations and your turn-around times are excellent.
Please keep up the good work!!
It is really a pleasure to work with the regulator.”
Edison Katjipuka,
07 February 2014
(FNB Unit Trusts)
STRATEGY
PERFORMANCE FOR
2012/2013
About four years ago, the Board adopted a five year strategy that
set the Authority into a transformation of both the institution
and the laws it administers. This strategy contains four key areas
of strategic intent which give rise to eight strategic objectives as
shown in the table below:
Objective
A sound regulatory and supervisory framework that
promotes a safe, stable, and trusted financial sector in
Namibia.
• To develop an efficient and effective regulatory and
supervisory framework.
• To build productive relationships with key stakeholders and
earn their trust and respect.
Well-informed and financially literate consumers of
financial products and services in Namibia.
• To contribute to the development of well-informed
consumers of financial products in Namibia, capable of
making sound financial decisions.
A well-managed, efficient and effective regulator of
financial institutions in Namibia.
• To prudently manage financial resources.
• To ensure operational efficiency of all business processes.
• To shape the NAMFISA organisational culture over time to
best execute the strategy and to develop a high engagement
working environment including capacity building.
• To develop appropriate IT systems.
A reliable source of data, research, and policy advice on
financial institutions in Namibia.
• To produce accurate statistics, conduct leading research
and provide quality policy advice on regulated entities and
financial services.
• To prudently manage financial resources.
• To build productive relationships with key stakeholders and
earn their trust and respect.
• To produce accurate statistics, conduct leading research
and provide quality policy advice on regulated entities and
financial services.
• To contribute to the development of well-informed
consumers of financial products in Namibia, capable of
making sound financial decisions.
• To develop an efficient and effective regulatory and
supervisory framework.
• To ensure operational efficiency of all business processes.
• To shape the NAMFISA organisational culture over time to
best execute the strategy and to develop a high engagement
working environment including capacity building.
• To develop appropriate IT Systems.
Within these key priority areas the Authority focused on the
following strategic initiatives.
36
Strategy and
Performance
Strategy and
Performance
Key Result Area
The Board set priority areas for the 2013/14 year towards the
end of the financial year 2012/2013. The priorities are set to
steer the Authority towards achieving its strategic goals and
objectives despite constraints in resources: i.e. sustainable
availability of skilled human capital, funds and time. Priority
areas were as follows:
37
The Authority’s 5 year Strategy was influenced by the
following factors:
In pursuit of the strategic intent, the Authority’s regulatory
and supervisory approach will strive to:
• The importance of improving the Authority’s reputation by
strengthening its regulatory and supervisory effectiveness.
• The limited institutional capacity (Skills, culture, processes
and systems) within the Authority.
• Inappropriate and ineffective regulatory framework.
• The limited literacy and activism among the consumers of
financial services and products.
• Common Monetary Area regulatory and supervisory
environment and the necessity of collaboration with other
regulators in financial sectors.
• Global financial regulatory and supervisory best practices.
• Employ risk-based supervision.
• Promote market soundness and integrity.
• Enhance consumer awareness and protection.
To achieve the strategic intent the Authority has broken down
the eight objectives into pre-agreed annual deliverables which
form the basis for performance agreement contracts for the
Authority’s leadership cascaded down to junior management
and staff.
Prudently manage financial resources
The Authority’s total Income for the year ended 31 March 2014
was N$116.8 million and expenditure was N$94.2 million
generating a net surplus income of N$24.3 million.
Budget Commentary
Due care was taken to ensure that the overall budget variance
is within the target of 5% variance. The variance for income is
much higher than the target but has positively enhanced the
resource base of the Authority.
Income for the period ending 31 March 2014 is 13% higher
than the initial budget, whilst Expenditure for the period
ending 31 March 2014 is 8% lower than the initial budget.
The total assets of the Authority increased to N$247.7 million as at
31 March 2014 compared to N$217.1 million as at 31 March 2013.
NAMFISA capitalises all it’s assets with a life expectancy greater
than a year and with a value greater than N$1 000. The authority
has invested about N$2.3 million in equipment and intangible
assets which represent cost of acquiring computer equipment
(computers, iPads and printers) for new staff and management
and for replacing old laptops, old personal computers and
printers in accordance with the IT plan for the year.
Non-current Financial Assets, which represent investments in
Unit Trusts increased to N$88.8 million as at 31 March 2014,
compared to N$77.3 million as at 31 March 2013. The purpose
of investing in Unit Trusts is to retain these funds for the
foreseeable future extending over more than 1 year to enhance
capacity and build up reserves for the acquisition of property
for future developments.
The Authority, as in previous years, developed a stakeholder
engagement plan which was implemented throughout the year
under review. The Chief Executive Officer attended industry
forums, meetings, conferences and training workshops
participating in presentations, feedback sessions and other
high level roles. These meetings were positively received by
the Industry as shown in the survey results on perception of
conduct and on content as collated for most events by the
Corporate Communications Department of NAMFISA.
Nationally, the Authority participated in various initiatives,
including the Financial Literacy Initiative, Financial Stability
Committee, as well as structures set up to support the
implementation of the Financial Sector Strategy, the blueprint
for financial sector development in Namibia.
The Authority continues to participate in regional and
international organisations such as the:
Reasons for the positive variance on expenditure are the
significant cost savings measures under Advertising & Stakeholders
Engagements, Consumer Education and Industry meetings &
Consultation, without compromising on business objectives.
Current Financial Assets, which represent investments in Fixed
Deposits, increased to N$82.8 million as at 31 March 2014
compared to N$61.3 million as at 31 March 2013. Funds in
fixed-term deposits yield competitive, positive returns over the
period under review which increased the investment income.
The budget is closely monitored, through the compilation of a
set of Monthly Management Reports which are distributed to
Management for their information, perusal and action, which
ultimately ensures compliance and transparency.
• Committee of Insurance, Securities and Non-banking
Financial Authorities (CISNA);
• International Association of Insurance Supervisors (IAIS);
• International Association of Pension Supervisors (IOPS); and
• Eastern and Southern Africa Anti-Money Laundering Group
(ESSAAMLG).
The substantial budgetary savings, prudent management
of resources and the higher levels of income, enabled the
Authority to invest funds to maximise returns.
Produce data, research and policy advice
38
Graph - Total Income by source is as follows:
Graph - Total expenditure by category is split as follows:
Revenue 87 %
Investment Income 11 %
Other 2 %
Consumer Education Costs 2 %
Depreciation and Amortisation Expenses 2 %
Finance Charges 1 %
Inspection and Enforcement Costs 1 %
Legal Costs 1 %
Office Rental Expenses 9 %
Professional and Consulting Fees 3 %
Staff Costs 67 %
Other 15 %
The Authority collated and published data received from
regulated entities for the Statistical Bulletin, Annual Report,
Financial Stability Reports and other reports on activities of
NAMFISA. The Quarterly Statistical Bulletin has continued
to be appreciated by the industries while the 2013 Annual
report received the Africa award from PMR Africa as the best
annual report in Namibia. The Financial Stability Reports are
produced jointly with the Bank of Namibia (BON).
The Authority’s policy advisory work was spread across the
following areas:
• NAMFISA and FIM bills;
• FSO Bill;
• Consumer Protection Position Paper;
• Standards and regulations for the FIM bill; and
• Other ad hoc work as requested by Minister or other
stakeholders.
More information pertaining to the progress on all policy
advisory work is covered in the chapter called “Regulatory
Reform Update”.
CONGRATULATORY
MESSAGE
“Please join me in extending our heartfelt gratitude
to our CISNA Colleagues in Namibia for successfully
hosting the 31st CISNA meeting. A special thank you
to Mr Phillip Shiimi, Mr Isack Hamata, Mr Adrianus
Vugs and the organising team for their hard work,
support, co-operation and kind assistance in ensuring
a successful meeting. Your generosity and friendliness
will remain with us, and we will always remember
your warm reception and all the beauty your country
had to offer; where the ocean meets the desert! We
sincerely forgive you for the weather conditions, we
know you would have also intervened if you could!”
Annah Manganyi
11 October 2013
On CISNA Meeting in Swakopmund
Strategy and
Performance
Strategy and
Performance
Factors contributing to the higher income can be attributed to
higher levy base levels, penalty fee income due to a more focused
campaign to drive compliance and concerted efforts to enhance
interest earnings to maximise returns, through swift action and
taking advantage of competitive interest rates.
Asset commentary
Build productive relationships with key
stakeholders
39
Educate and bring awareness to the
consumers of financial services and products
The Authority continued to draw its focus from the Consumer
Education Strategy for the period 2013 to 2016. This strategy
was created so as to have well-informed and financially literate
consumers of financial products and services in Namibia.
The Authority has been running a consumer financial
education programme that sought to educate, inform and create
awareness among users of financial services and products to
enable them to make informed decisions.
The key focus areas of NAMFISA’s consumer education
interventions were to: introduce and promote NAMFISA,
discuss the role of NAMFISA; explain the different types of
financial services and products, educate and bring awareness
on consumer financial rights and responsibilities.
In terms of activities during the year under review, the following
was done to increase awareness and financial literacy amongst
users and potential users:
40
The NAMFISA and Financial Institutions and Markets Bills
The drafting of the NAMFISA and Financial Institutions and
Markets (FIM) Bills started a few years ago and have undergone
several rounds of consultation with stakeholders, including
regulated entities and the Cabinet Committee on Legislation.
The Bills are now with the legal drafters in the Ministry of Justice
for finalisation and are anticipated to enter the promulgation
process during the current fiscal year (1st session of 2015).
The drafting of the Bills and subsequent protracted stakeholder
consultations have occupied much of the Authority’s time over
the past two years. This was to ensure that all the stakeholders
understand and appreciate the intent and purpose as well as
implications of the new legislation. Once promulgated, the
new law will provide NAMFISA with stronger regulatory and
supervisory powers. The promulgation of the FIM Bill will play
a major role in the deepening and development of financial
markets. The flexibility that industries will have, will lead to
greater innovation in offering competitive financial products
and services to the benefit of both consumers and the financial
institutions and intermediaries involved.
NAMFISA is in the process of finalising the drafting of the
Financial Services Ombudsman (FSO). This Bill will change
the way the financial services industry has been operating
in the country. It will be a separate piece of legislation from
those administered by the Authority and will be headed by
the Financial Services Ombudsman. The Financial Services
Ombudsman is a statutory officer who deals independently with
complaints from consumers about their individual dealings
with all financial service providers. The FSO bill is currently
undergoing its final round of reviewing with the Ministry of
Finance. This review is at an advanced stage and once this
process is finalised, the legal drafting of the FSO Bill will be reinstituted. This process will be followed by consultations with
the stakeholders.
Regulations and Standards under the FIM Bill
The process of drafting and reviewing of subordinate legislation
to support the FIM Bill continued throughout the year under
review. NAMFISA is in the process of acquiring additional
human resources to meet the set targets. This will entail
contracting of consultants to aid in the drafting of layman’s
draft standards. This process is quite meticulous and will
require concerted effort and focus to succeed.
In terms of industry consultations, the envisaged plan is that
the industry be consulted in a formal and informal manner.
The informal consultations will be done by way of sharing the
legal drafts of the subordinate legislation with the industry for
provision of written comments in 30 days after receipt. The
formal consultations will also take place over 30 days once the
regulations and standards are gazetted. This process of drafting
the regulations and standards is championed by the Research,
Policy and Statistics Division within NAMFISA
Regulations 15, 28 and 29
Regulations 15 and 28 are aimed at curbing excessive capital
outflows and to encourage greater local investments by longterm insurers and pension funds. Regulation 15 was amended
to allow insurance companies to invest assests backing policy
holders’ liabilities at prescribed levels for various assest classes.
Regulation 28 was amended to allow pension funds to invest a
minimum of 1.75% and a maximum of 3.5% of their total assets
in unlisted investments. The “Unlisted Investments” is a new
asset class that was introduced by amendments to Regulations
28 since exposure to asset class was not regulated, although
some pension funds had indirect exposure to these alternative
assets. Investment in property companies is however not
recognised as unlisted investments and neither are other assets
which are listed in an annexure (see gazette) to Regulation 28.
This list of assets includes, but is not limited to, government,
corporate and state-owned, local authority and regional council
bonds. Regulation 28 further reduces the amount of dual-listed
stocks that qualifies as domestic assets. The percentage of a
fund’s total assets acquired in a company incorporated outside
Namibia that qualifies as domestic assets (dual-listed) will be
reduced from 30% starting from the 1st of January 2014 to 10%
starting 1st of January 2018. Pension funds are given 12 months,
starting 1st of January 2014, to comply with the provisions of
Regulation 28. Regulation 29 deals with statutory pension fund
investments in unlisted equities (1.75% of total assets under
management). An Investment Manager who wishes to deal
in unlisted investments should be registered and approved
by NAMFISA as an Unlisted Investment Manager (UIM). A
Special Purpose Vehicle (SPV) must also be registered as it is
through the SPV that funding will be channeled to the UIM.
Ensure operational efficiency
of all business processes
The Authority embarked on a path to achieve operational
efficiency to enhance service delivery. In particular, the
Authority continued to refine and use the following:
• Inspection plans, off-site analysis and standardised
inspection reports;
• The Enforcement Ladder which uses the risk rating approach
and methodology; and
• Standard turnaround times for all activities performed by the
Authority i.e. rule amendments, registration of applications
and handling of industry and consumer enquiries.
Develop a performance-oriented culture
The Authority’s leadership creed gives direction to its successful
approach by the Board, Executive Officers and Management.
The Leadership Creed was developed in 2011/12 to clearly
state the values that leadership of the Authority commits to in
carrying out its functions.
The activities aimed at enhancing a performance-oriented
culture include: monthly feedback sessions to drive strategy
and inculcate our values: review and approval of human
resources policies by the Executive; in-house technical training
sessions; and the development and implementation of job
profiles for all positions.
The Authority has also instituted a Strategy Challenge to
engender staff ownership in the 3-year rolling strategy. The
main purpose is to ensure that all staff do not merely execute
the strategy but also need to own and live it. The first year’s
strategy challenge presentations have been very successfully
as divisions exhibited enthusiasm, creativity and heightened
awareness of the overall direction that NAMFISA has taken.
COMPLIMENTARY
MESSAGE
“Dear Phillip,
I trust that you are doing well. Thank you for inviting
me to be a judge at your performance review exercise.
I promised to give you additional feedback at a later
stage, and herewith I would like to honor that promise.
I was very impressed with what you have achieved in
such a short time. I think it is high time that you tell
the NAMFISA story, what happened at NAMFISA.
Since you took leadership it has been remarkable and
achievements have been phenomenal. I think it is worth
celebrating and the story is worth to be told.
I like the event because it forced your staff to think
outside the proverbial box, and really all of them did
very well. I think it stimulated creative thinking and
promoted confidence, two essential elements for a High
Performance Organisation or HPO.
The ability to interact with your staff and to energise
them is something that cannot be overemphasised, I
think you did well on that score.”
Kind regards,
Dr John Steytler,
05 June 2014
(Statistician General)
Develop appropriate IT systems
To achieve our goal of a well-managed, efficient and effective
regulator, the Authority drafted IT strategy and implementation
plan in the year 2011/12 which is reviewed annually. A welldesigned IT infrastructure is not only important for operational
efficiency, but also for regulatory effectiveness.
Strategy and
Performance
Strategy and
Performance
Develop an efficient and effective regulatory
and supervisory framework.
Financial Services Ombudsman
41
PRIORITIES FOR
2014/2015
Strategic Themes
Financially literate leading to improved financial
decision making.
Consumers:
Foster • Protection
• Promotion of awareness
Financial stability with sound principles.
Reliable source data and information for research and
policy advice.
Financial institutions and Intermediaries:
Foster • Stability
• Fairness, efficiency and orderliness
• Reduction of financial crime
Sound regulatory and supervisory framework:
- Prudential standards
- Market conduct
Regulate and supervise
• Financial institutions & intermediaries, moneylenders &
credit providers.
Foster –
• Financial soundness
• Highest standards of conduct of business
Effective Operations
42
Objective
Strategy and
Performance
Strategy and
Performance
The Board annually reviews the priorities of the Authority
and has set the following four priority areas for the 2014/15
financial year. In line with this prioritisation, the strategic
intent has been cascaded into strategic themes and objectives
in the table below:
Table: Strategic Themes and Objectives on Priority Areas for 2014/2015
• Operational efficiency across the Authority
• Effective risk management
43
Support Functions
This section of the Annual Report provides
some of the highlights of the organisation’s
Human Resources, Legal and Information
Technology functions and activities during the
period under review.
Support Functions
44
SUPPORT
FUNCTIONS
45
NAMFISA funds
financial markets skills
development
WINDHOEK – The Namibia Financial Institutions
Supervisory Authority (NAMFISA) has awarded
bursaries to eight students for the 2014 academic year.
The regulator says the skills required to fulfill its mandate
are very specialised and not readily available in Namibia,
hence the need to have a structured approach to filling
the identified skills gap. The NAMFISA bursary scheme’s
focus areas are in the fields of actuarial science, financial
markets, finance and accounting, auditing and law,
insurance and investment studies. Since its introduction
in 2010, 12 students have benefited from the bursary
scheme and cost NAMFISA a total amount of nearly
N$2.7 million covering expenses such as tuition,
accommodation, meals, traveling, books, medical aid,
study permits and stipends.
“As a regulatory authority we have a responsibility to
ensure the safety and soundness of the financial industry
and it therefore behooves us to have the necessary capacity
to deliver on those expectations. The bursary scheme is
but one of the strategies we have at NAMFISA to develop
skills, which benefit the authority and the country at large.
By absorbing the graduates who benefit from our bursary
scheme, we are underlining the importance of nurturing
and guiding young talent as they take their first steps in
the job market,” said NAMFISA Chief Executive Officer,
Phillip Shiimi. NAMFISA bursary scheme beneficiaries
are pursuing studies both in Namibia and in South Africa.
Since the inception of the scheme in 2010, NAMFISA has
already started to reap the benefits as from 2013 when
four of the nine graduates took up full-time employment
with the regulator.
The other five are on attachment to financial institutions
in order gain industry skills and upon completion of their
attachments they will be expected to join NAMFISA’s
supervisory divisions.
Human Resources
Employment practices
Staff complement
NAMFISA strives to be an employer of choice and, as such,
complies with a variety of applicable employment legislation.
To promote employee engagement and boost staff morale, the
organisation holds regular staff meetings, which are conducted
by the Chief Executive Officer.
The staff complement, including contract staff, stood at 107 on
31 March 2014, which was 31.8% up from 73 during the previous
financial year. The number of workforce (including contract
staff) as at 31 March 2014 and 1 April 2013 are shown below:
Four of the students who completed their studies on NAMFISA
bursaries were offered full time employment by the Authority
during the year under review. They are included in the
information for the overall staff complement of the Authority.
1 April 2013
31 March 2014
46
27
Females
Males
63
44
Employment equity
Significant terminations
NAMFISA is non-discriminatory and remains committed to
the Employment Equity Code of Good Practice. To ensure
that this commitment is sustained and to monitor progress
thereof, the Human Resources (HR) Department provides
management and the Board with quarterly updates on the
progress made towards the implementation of the approved
NAMFISA Employment Equity Plan.
• Lily Brandt (Assistant CEO) went into early retirement with
effect from 30 June 2013.
• Akua Avafia (GM: Operations) resigned with effect from 30
September 2013.
• Adrianus Vugs (GM: RPS) resigned with effect from 30
January 2014.
Equity Status as at 31 March 2014
Employment Equity
Distribution
Staff turnover
From 1 April 2013 to 31 March 2014, staff turnover was 7.5%.
nr
%
Disadvantaged Male 38 | 35 %
Advantaged Male 2 | 2 %
Non-Namibian Male 3 | 3 %
Disabled Male
1 | 1%
Disadvantaged Female 55 | 52 %
Advantaged Female
7 | 6%
Non-Namibian Female
1 | 1%
Bursaries
NAMFISA awarded bursaries to eight deserving students from
a total of 216 applications received. The current bursary holders
are studying towards the following qualifications:
Bursary Holders
No. of Bursary
Holders
Course
Institution
46
Total
107
Recruitment and selection
From 1 April 2013 to 31 March 2014, the HR Department filled a
total of 42 vacancies across all bands, as indicated in the table below:
Filling of vacancies per band
Organisational Band
Narrative
Band B Administrative Staff
Band C Professional Staff
Band D Management &
Senior Specialists
Band E Executive
Total No. of Appointments
1
26
15
0
Staff promotions
A total of 5 staff members, all from the designated groups, were
promoted to senior positions, as reflected in the table below:
Promotions during the
period under review
No. of Promotions
Females
3
Males
2
1
1
2
1
1
Support Functions
Support Functions
73
Masters in Mathematical Science
University of Stellenbosch
BSc Honours in Financial Mathematics
University of Stellenbosch
Masters in Commercial Law
University of Cape Town
BComm Honours in Economics
University of Cape Town
Bachelor of Commerce (Accounting)
University of Cape Town
BComm Honours majoring in Financial
Analysis & Portfolio Management
University of Cape Town
Bachelor of Accounting (Honours)
University of Namibia
1
1
Training and Development
Authority staff in various divisions got exposure through
attending training exercises, forums and conferences at
international level. Organized intellectual exchange visits
between the Authority’s staff and staff from other regulators
was also a regular feature of interactive activities during
the year. Selected employees from departments attended a
familiarization and training session at the Financial Services
Board (FSB) in Pretoria, South Africa during the month of
September 2013. Staff and managemant also attended regional
conferences and seminars e.g CISNA and ESAAMLG. The
departmental staff in almost all divisions continued to do
online modular studies on the Financial Stability Institute
(FSI) Connect and the success rate is good. Managers also
attended training courses and workshops geared to further
enhance knowledge on supervisory developments at all levels
and improve efficiency in management.
47
Information & Communication
Technology Division
ICT business alignment
In order for the ICT function to effectively support the
business the function was reviewed and was elevated from
being an operational department to a strategic Division to aid
NAMFISA to achieve it’s strategy objectives. This development
led to the appointment of a Business Systems Specialist who
is tasked to ensure that the business benefit from the various
ICT systems and services. The IT strategy was also reviewed to
align with the business strategy.
48
The historical data upload for 2007 – 2011 was completed with
high involvement of the supervisory departments. The ERS
enhancement project is expected to be completed during year
2015 though progress recorded during the first half of 2014
can be placed at 70% completion of full project. The network
infrastructure was expanded to accommodate the additional
offices at the Alexander Forbes Building. The Perimeter
Security infrastructure (Firewall, VPN) was upgraded at head
office but was also expanded to both the Alexander Forbes
Building Office blocks and to the Disaster Recovery (DR) Site.
Additional modules on the Finance Accounts and the HR
systems were acquired and deployed. Control on the printing
facilities was instituted and the NAMFISA printing bill reduced
significantly.
ICT future strategy
The chief tenets of the IT Strategy are to:
• To specify how ICT will contribute to NAMFISA achieving
its strategic objectives;
• Identify technology remedial initiatives for the next two to
three years;
• To provide for a framework for prioritising ICT initiatives;
• To set clear targets for the period of the ICT strategy (2-3
years).
The ICT Strategy for the next 2 to 3 years is under review
and will be tabled at the various committee meetings for
endorsement and approval early 2014/15.
The Authority’s legal team experienced one of the busiest years
in handling and facilitating legal proceedings in situations
where NAMFISA was called to clarify or defend and/or
support law redress and justice. The following are some of legal
cases in which NAMFISA played a significant role during the
year under review.
Former Members of the Rössing Pension
Fund (applicants) vs NAMFISA and three
(3) Others
The applicants launched a review application during October
2012 to review and set aside the “decision of Registrar approving
the registration of rule 19.4.2 which confers on the employer the
final right to decide in which manner the Rössing Pension Fund’s
surplus assets are to be distributed, when in law such assets are
the property of Rössing Pension Fund”.
They further sought a declaratory order to the effect that the
particular rule of the Pension Fund is unlawful and does not
comply with the provisions of the Pension Funds Act.
NAMFISA and the other respondents opposed the review
application on various grounds during April 2013 after which
date no further steps were taken by the Applicants to bring the
case to finality.
The Applicants withdrew their application against NAMFISA
on 31 March 2014.
NAMFISA vs FIS Life Assurance Company
Ltd (respondent)
An application was launched against the respondent, a
registered long-term insurer for funeral insurance business
only, to place it under provisional curatorship due to various
non-compliance and other issues. On 7 November 2012 the
order placing the respondent under provisional curatorship
was granted.
The curatorship continued until 9 December 2013 when the
rule nisi was discharged, bringing the curatorship to an end.
Alwyn Petrus van Straten N.O. & 88 Others
(plaintiffs) vs NAMFISA & two (2) Others
The plaintiffs instituted action against NAMFISA during
March 2012 in which they claimed payment of a substantial
amount for damages suffered as a result of NAMFISA’s alleged
breach of its statutory duty of care.
NAMFISA excepted to the plaintiffs’ Particulars of Claim and
the exception was upheld on 31 January 2014. The Plaintiffs
appealed against the judgment upholding the exception but the
appeal has since lapsed.
The Authority’s legal team was also involved
in policy and law making and the following
developments mark some of the activities.
Subordinate Legislation
The Long-term Insurance Regulations and the Regulations for
Pension Funds were amended on 31 December 2013 with effect
from 1 January 2014. More detail is covered in the section on
Regulatory Reform and updates.
Intended Legislation
NAMFISA is involved in drafting and advising on new
legislation or amendments of old legislation in respect of
financial institutions and services. The intended legislation
changes cover work on: Namibia Financial Institutions
Supervisory Authority Bill, the Financial Institutions and
Markets Bill, the Financial Services Ombudsman Bill, an
amendment to the Pension Funds Act and new legislation with
regard to moneylenders and consumer protection.
Support Functions
Support Functions
ICT achievements
Legal Services Division
49
Consumer Education
Consumer Education
50
CONSUMER
EDUCATION
51
Microlenders pay
back N$1.9m
Local microlenders were ordered to pay back N$1.9 million in
total to customers who were overcharged in the past five years,
the Namibia Financial Institutions Supervisory Authority
(NAMFISA) confirms in its latest annual report. Reporting
on its enforcement activities throughout the year, NAMFISA
says those found to have overcharged consumers were mainly
guilty in the fields of overcharging interest, although others
were found to have illegally retained bank cards and personal
identification numbers (PINs).
Microlending business, the regulator says in its report for 2013,
rose by 6.9% on the yearly, to N$1.6 billion at the end of 2012.
“Term lenders disbursed 68% (N$1.1 billion) of all new loans,
while payday lenders disbursed 32% (N$507 million) of new
loans for the year 2012,” the company says in a media statement
summarising the annual results.
High number of complaints.
The total number of loans approved in the micro-lending industry
fell to 613 307 from 656 061 in 2011, representing a 7% drop.
Microlenders, NAMFISA said, served a total of 209 402
customers as at 31 December 2012, of which 97 167, or 46.4%
were civil servants.
“The average loan from a term lender amounted to N$11 074,
while that taken from a payday lender averaged N$983 per
loan,” the NAMFISA statement reads.
To protect consumers, governments and regulators, together
with financial institutions, have sought to educate consumers
in order for them to make informed decisions.
The Namibia Financial Sector Strategy states that consumer
protection and financial literacy is important to the economy. It
highlights the concern that low consumer knowledge regarding
rights, financial products and services, deficient protection
mechanisms and poor personal financial management can lead
to adverse impacts on the national economy and its citizens.
It is therefore important that the necessary infrastructure
is put in place to protect consumers from unfair practices.
Education and awareness are essential to ensure that the level
of information and guidance is enhanced.
52
In response to that call and on the Authority’s own accord,
NAMFISA recognises that consumer education is one of the
catalysts to financial inclusion and financial well-being of
all the citizens of Namibia, and thus, the reason why we will
continue to provide educational information on a consistent
basis through various mediums of communication to the users
and potential users of financial services and products as one of
our Strategic Imperatives.
The Authority has been running a consumer financial
education programme that sought to educate, inform and create
awareness among users of financial services and products to
enable them to make informed decisions.
The key focus areas of NAMFISA’s consumer education
interventions were to: introduce and promote NAMFISA, the
role of NAMFISA; different types of financial services and
products, and consumer financial rights and responsibilities.
In terms of past activities, the following was done to
increase awareness and financial literacy amongst users and
potential users:
• Conducted road shows where we performed street theatre
plays at schools and market places;
• Attended numerous trade fairs and shows throughout the
country disseminating educational information;
• Placed newspaper advertorials;
• Aired television and radio (live and pre-recorded) interviews;
• Placed supermarket trolley adverts at various supermarkets
across the country;
• Placed billboards at strategic highways across the country;
• Distributed our quarterly consumer education bulletin; and
• Youth and workplace programmes.
This section details the consumer financial education activities
that were undertaken during the financial year under review.
■■ Consumer Education Quarterly Bulletin: A total of
60,000 copies of the NAMFISA Consumer Education
Bulletin were produced and distributed during the year,
using various distribution partners including universities,
colleges, trade unions, regional councils and some
regulated institutions.
■■ Mobile phone SMS campaign: NAMFISA piloted SMS
literacy content by sending financial educational messages
to a total of 40,000 consumers over a six-month period.
The purpose was to create debate on responsible financial
behaviour and to encourage behavioural change when
dealing with financial services providers.
Topics covered range from pension schemes, medical aid
funds, insurances (long-term and short-term), budgeting,
savings, investments and debt management, (on a rotational
basis) to mention a few. The highlight on the topics is related to
product definition and awareness, rights and responsibilities,
and responsible personal financial behaviour.
■■ Engagement with University students: NAMFISA has
entered into a strategic partnership with the University of
Namibia to inform and educate first year and final year
students about financial challenges that they may face in
a college environment characterised by peer pressure and
personal freedom.
Content of the Consumer Education Bulletin is guided
by the Quarterly Focus areas which are collated by
NAMFISA’s Consumer Complaints Department.
■■ The Financial Literacy Initiative (FLI): The FLI
celebrated its first anniversary in March 2014. The FLI
is a national platform for various stakeholders involved
in the development of financial literacy in Namibia.
NAMFISA, together with partners such as the Bank of
Namibia, Ministries of Finance, Education, Justice, Trade
and Industry, civil society organisations (CSOs) such as
the Namibia Consumer Trust (NCT) and numerous other
non-governmental organisations (NGOs) are all founding
members. The FLI conducts roadshows, places newspaper
advertorials and airs financial-related interviews on radio
and television. As a platform partner, NAMFISA also
participates in the crafting of FLI’s strategy and assists
with the crafting and dissemination of financial literacy
messages.
■■ Radio clips: A series of 30-second radio clips were
produced and aired on selected local radio stations,
containing key messages anchored on savings, budgeting,
borrowing and financial contracts.
■■ TV and radio interviews: NAMFISA has a dedicated
slot on the Namibia Broadcasting Corporation’s morning
magazine programme, Good Morning Namibia, to discuss
topical issues that tackle the broad spectrum of financial
literacy. NAMFISA representatives were also provided with
an opportunity to be interviewed by various radio and TV
stations, (public and commercial media agents) on financial
literacy and consumer protection issues.
NAMFISA will heighten its participation in FLI to reach
many citizens as far as possible with consumer financial
education messages, activities and campaigns.
Consumer Education
Consumer Education
Regulation of financial services and products is dominated by a
focus on restrictions on financial services and products, regulating
business practices, as well as disclosure to consumers. As these
financial services and products become more complex and
change frequently due to innovation and technology, consumers
are often left alone with the burden of the understanding of the
various services and products sold to them.
Activities conducted during the
reporting period:
53
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15
In its current form, the N$105 million claim of liquidator
Alwyn van Straten and 87 former clients of Prowealth Asset
Managers against NAMFISA and auditing firm SGA is not
sufficiently clear to enable the defendants to give a proper plea
in response to the summons served on them, Judge Maphios
Cheda found in a judgement delivered in the Windhoek High
Court on Friday last week.
The claim, which was lodged with the High Court in March
2012, should contain more particulars as “it is not clear whether
the cause of action is grounded on a contract, delict or statutory
obligations”, Judge Cheda said in his judgement.
“In my opinion, left as it is, there is confusion as to what
defendant is alleged to have done or not done. If it is an act
or omission, it should be clear on the particulars, it certainly
cannot be left to conjecture,” he said.
Judge Cheda also found that the Registrar of Stock Exchanges,
which is one of the positions held by the Chief Executive Officer
of NAMFISA, should have been cited as one of the defendants
in the case, since the functions carried out by the registrar are
not the same as those of NAMFISA itself.
Judge Cheda went on to remark that although the plaintiffs’
claim “is pregnant with legal difficulties”, it cannot be left to lie
still and lifeless. The amount involved in the case is colossal, and
it is therefore in the interest of all parties involved and the public
at large that the matter should be properly dealt with, he said.
Judge Cheda upheld the exceptions that NAMFISA and SGA
raised against the claim filed against them, and ordered the
plaintiffs to pay the defendants’ legal costs in respect of the
exception that was raised and argued. The judge ordered the
plaintiffs to amend their particulars of claim within 15 days
after the giving of the court’s order.
Van Straten, in his capacity as liquidator of Prowealth Asset
Managers, and the 87 investors who were clients of Prowealth
Asset Managers are suing NAMFISA and SGA for a total of just
over N$105.2 million.
They are claiming that this is the amount that Prowealth Asset
Managers owes the investors and that the company is unable to
pay to them because of large-scale theft and fraud that the late
founder of the Prowealth group, Riaan Potgieter, committed
before he took his own life in December 2008.
The investors and Van Straten are claiming that NAMFISA and
SGA were negligent in the performance of their duties with
regard to the regulatory oversight and auditing of companies
in the Prowealth group, and that this enabled Potgieter to steal
huge amounts of money from investors who were clients of
Prowealth Asset Managers.
SGA is also being accused of negligence for failing to discover
and disclose the conduct of Potgieter and the company. The
auditors further helped Potgieter to disguise money that he
misappropriated by reflecting it as loans in the company’s
financial statements, and by recommending a scheme in terms
of which the purported loans were to be converted into share
capital, it is alleged in the claim in its current format.
As a result of the auditors’ negligence, Potgieter was able to
misappropriate more than N$105.25 million belonging to the
company, Van Straten and the investors are claiming.
Media Article
Games
Complaints
&
Fun s
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Gam
THE liquidator of the collapsed Prowealth group of companies
and investors who lost tens of millions of dollars invested with a
key company in the group have been given 15 days to rework a
massive legal claim that they lodged against the group’s auditors
and the Namibia Financial Institutions Supervisory Authority
two years ago.
55
The legislative gaps that were found in the current
regulatory and supervisory framework has led to the
following developments and planning during the year
under review:
FIM Bill and NAMFISA Bill (bills, subordinate legislation,
development, transition and implementation).
Regulatory Reform Update
Regulatory Reform Update
56
REGULATORY
REFORM
UPDATE
57
Development of the FIM and NAMFISA Bills
Transition from old to new
The FIM Bill and NAMFISA Bill (the Bills) have been submitted
to the Ministry of Justice for legal drafting:
Transition from old laws to NAMFISA and FIM Act. The
process of transition require preparation concurrent to the
development of the laws covered above and the activities
covered below:
NAMFISA gives:
■■ support to the Ministry of Finance/Minister of Finance in
the parliamentary process, i.e. if the Bills are submitted to a
committee and further questions are raised etc.; and
■■ support to the legal drafters when they go through the Bills
– this is likely to be considerable work as the meaning of
the provisions in the Bills should not be lost. This requires
back-checking, review and alignment;
58
■■ Continued drafting and review of the Regulations and
Standards by the Authority is going on;
■■ Development is by regulated industry groupings (i.e. by
Chapter in the FIM Bill);
■■ After process of converting the standards and regulations
into final legal drafts, the Regulations and Standards will
have to be consulted upon with industry. The industries
may consider to formulate discussion groups to enable
consolidated input into the Regulations and Standards;
■■ The Standards (already through the legal drafters and
reviewed by the Authority) can then be formally Gazetted
for “formal” industry input;
■■ Industry will then review the Standards once more,
Authority considers comments and produces final
standards and these can then be formally Gazetted as law;
■■ Concurrently, the Minister of Finance Gazettes the
Regulations; and
■■ The legal framework is now officially in place and by notice
in the Gazette, the Minister can “activate” the NAMFISA
and the FIM Act in its entirety.
ºº Processes can be streamlined and economies of scale can
be harnessed;
ºº Ensure that specialisation can take place;
ºº Ensure that all regulated financial institutions experience
the Authority in a similar manner; and
ºº Ensure that skills are aligned to function.
Regulatory and Supervisory costs are likely to increase under the
new legislation and this will have to be assessed from the point
of view of the new organisational structure, quantum of human
resources, IT requirement, Financial Services Ombudsman, etc.
This process needs to take place prior to the promulgation of a
new “levy gazette” to ensure that funding is in place.
Implementation
The implementation of the new legislation may require changes
to the organisational structure and approach to supervision.
The choice of implementation may be dictated by the choice of
organisational redesign as there are effectively three choices:
ºº Keep the current set up of the organisational, i.e.
supervisory units are structured by industry;
ºº Change organisational structure to one that is structured
around functions, i.e. applications, market conduct,
prudential supervision, inspections, etc.; or
ºº A hybrid version of the two preceding structures.
Regulatory Reform Update
Regulatory Reform Update
• Subordinate legislation – Regulations and standards. The
full set of Regulations and standards will have to be produced
to fully support the Bills. However, there are some standards
that are not critical to the implementation of the Bills once
fully promulgated, thus current production is focused on the
80 critical standards and regulations and various stages of
drafting and review:
■■ The legislation requires the development of new forms
(applications, approvals, certificates, etc.), returns
(financial, risk management reports, etc.) and other
standardised/consistent documentation to support the
implementation of the new laws;
■■ The new legislation also requires the development
of new processes and procedures to support efficient
implementation;
■■ In line with the risk-based supervisory plan, management
reporting needs to be developed to assist with consistent
implementation of the legislation and the employment of
risk-based supervision;
■■ IT systems need to be developed to support the new
documentation (forms, returns, and other documentation)
as well as the new processes, risk-based supervision, etc.;
■■ Based on the newly developed processes and risk-based
supervision, there may be need to review the organisational
structure to ensure that:
59
60
The Authority commenced with the development of the riskbased supervisory (RBS) framework a few years ago. In the
previous year, research on RBS best practice was conducted
and concept note completed. Further development of the
risk-based supervisory framework is based on the FIM bill,
Regulations and Standards. In developing the subordinate
legislation the Authority is making sure that:
■■ There is alignment and relevance of policy matters for the
specific financial institutions;
■■ There is consistency in application of policy issues across
different financial institutions; and
■■ That legislation will be effective for use as a regulatory and
supervisory tool in prioritisation mechanism(s).
During the year under review, continued drafting of
subordinate legislation to the FIM bill requires understanding
and incorporation of underlying principles and reference to
international best practices. This is a firm basis for the riskbased supervisory framework.
Regulatory Reform Update
Regulatory Reform Update
Risk-based supervision
61
Financial Services Ombudsman
Medical Control Board
The Financial Services Ombudsman (FSO) Bill is already in
draft form and the following needs to be achieved:
The Authority is in the process of developing a plan for the
development of the Medical Control Board. Policy work is still
at its infancy.
• Finalise the Draft Bill after input from the Minister;
• Consult with industry and other stakeholders after the
legal drafting process; and
• Submit to the Ministry of Finance and assist the Ministry
of Finance throughout the promulgation process.
Consumer Credit Bill and subordinate
legislation
Regulatory Reform Update
The Authority is in the process of developing a plan for the
development of the Consumer Credit Bill. Policy work on this
bill is still at its preliminary stages.
Quarterly Statistical
Regulatory Reform Update
Bullentin
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63
The NAMFISA Supervisory
Ladder of Intervention
Purpose
64
• To identify areas of concern early and to intervene effectively
to protect the users of financial services;
• To promote awareness and enhance the transparency of
the system of intervention for regulated entities and other
stakeholders;
• To summarise the circumstances under which intervention
measures may be expected; and
• To set out NAMFISA’s core supervisory principles, outline
its supervisory activities and provide the framework for
remedial supervisory intervention.
Stage of intervention
Rating description
Stage 1 Intervention:
No significant
problems
Stage 2 Intervention:
Early Warning
Stage 3 Intervention:
Risk to Viability
or Solvency
Stage 4 Intervention:
Future Viability
in Serious Doubt
Stage 5 Intervention:
Entity Not Viable
or Insolvency
Imminent
Rating code
Notes:
• Stage 1: At this stage, the Authority shall carry out ongoing
supervisory and regulatory activities on a regulated entity
pursuant to its mandate.
• Stage 2: The Authority has identified some deficiencies in
policies or procedures or the existence of other practises,
conditions and circumstances that could lead to the
development of problems described in stage 3 of intervention.
• Stage 3: At this stage of intervention situations or problems
exist that, although not presenting an immediate threat to
viability or solvency, could deteriorate into a stage 4 situation
if not addressed promptly. During this stage an entity may
also be placed on a supervisory watch-list with increased
level of monitoring.
• Stage 4: This stage entails situations or problems described
at stage 3 that pose a material threat to future viability or
solvency, unless prompt, effective and corrective measures
are applied.
• Stage 5: This stage is characterised by severe financial,
operational or market conduct difficulties resulting in one or
more of the following:
■■ Failure, or imminent failure of the regulated entity to meet
capital adequacy and solvency requirements coupled with
the inability to rectify the situation within a short period
of time;
■■ Failure of the regulated entity to develop and implement
an acceptable business plan, thus making either of the two
preceding circumstances inevitable within a short period
of time; and
■■ Prolonged and consistent failure to comply with the
Registrar’s directives.
■■ This will result in the reistrar seeking a winding-up order
or revocation of registration of the entity and notification
of the public.
NAMFISA supervises its regulated entities in accordance with
the NAMFISA Act (as amended).
NAMFISA subscribes to principles adopted by international
standard-setting bodies, i.e. IOPS, IAIS, IOSCO and CISNA.
NAMFISA will continue to review its policies and practices to
ensure that they remain effective and efficient and are in line
with the needs of Namibia’s financial sector and international
best practices.
The supervision of financial institutions is conducted on a
consolidated basis. The Memorandum of Understanding
signed between NAMFISA and the Bank of Namibia and the
Consolidated Supervision Framework permit exchange of
supervisory and other information between the two Regulators
for the purpose of facilitating consolidated supervision.
Supervisory Ladder
of Intervention
Supervisory Ladder
of Intervention
The Act provides a wide range of discretionary intervention
powers to the Authority to address situations that give the
Authority cause for concern. This Guide sets out the procedures
that NAMFISA will generally follow when the Authority has
cause for concern regarding the operations of a regulated entity
or in the event of non-compliance by a regulated entity with
applicable legislation, regulations, standards, guidelines and
directives of NAMFISA. The objectives of this guideline are:
NAMFISA’s Supervisory Principles
Indicators for supervisory concerns
65
Table: Supervisory Reform – Supervisory Intervention Ladder as at 31 December 2013
66
Pension Funds
Medical Aid
Funds
Friendly
Societies
Microlenders
Capital
Markets
Short Term
Insurance
Long Term
Insurance
Stage 1 – no
significant problems
73
2
0
141
26
10
15
Stage 2 – early
warning
20
4
0
44
2
2
0
Stage 3 – risk to viability 8
or solvency
3
0
14
0
0
0
Stage 4 – future
viability in serious
doubt
8
0
0
22
1
0
2
Stage 5 – entity not
viable or solvency
imminent**
2
0
2
64
4
1
1
Total regulated
entities
111
9
2
285
33
13
18
* Insurance intermediaries excluded
**Dormancy, non-submission of returns, non-payment of levies, solvency
Supervisory Ladder
of Intervention
Supervisory Ladder
of Intervention
Supervisory
Interventions
67
Supervisory Developments
Supervisory Developments
68
SUPERVISORY
DEVELOPMENTS
69
SUPERVISORY
DEVELOPMENTS
Table: Supervisory Reform – Enforcement Actions during the year 2013
Supervisory
Interventions
Pension Funds
Medical Aid
Funds
Friendly
Societies
Microlenders
Capital
Markets
Short Term
Insurance
Long Term
Insurance
Inspections
12
26
2
59
8
4
9
Notices to cancel
135
0
1
38
8
9
27
Actual Cancellations
0
0
0
22
13
0
1352
Voluntary
cancellations
13
0
0
0
4
32
21
Complaints Resolved
2
3
0
166
2
0
2
Penalties imposed
66
1
0
0
0
4
3
70
Investment Institutions:
Legislative developments
Supervisory activities in terms of Collective Investment Schemes
(CIS) revealed that one management company was registered,
namely, Allan Gray (Namibia) Unit Trust Management Limited,
during the year 2013.
One of the above-mentioned inspections was conducted in
collaboration with the Capital Markets (CM) department
and the Swedish regulator, Finansinspektionen, through a
cooperation agreement (MOU) between the two regulators.
The aim of the joint inspection was to expose the local staff to
international best practices as well as to align our supervisory
activities with the Risk-Based Supervision (RBS) as practised
by Finansinspektionen.
NAMFISA crafted a Ladder of Intervention comprising of five
(5) stages of supervisory intervention. The stages vary from Stage
1, signifying no major problems to Stage 5, signifying that the
entity is no longer viable or insolvency is imminent. The latter
would result in NAMFISA taking strict action which would
include a winding-up order or the cancellation of the entity’s
registration with NAMFISA and notification to the public.
The NAMFISA Electronic Regulatory System (ERS) was
introduced in June 2011 and the department successfully
uploaded all statutory return on it. The ERS enabled regulated
entities to submit their quarterly data and bi-annual levy
returns electronically. The department embarked on loading
historical data from 2006 until 2011 on the system, which will
enable a more in-depth and efficient historical analysis of data.
NAMFISA’s Ladder of Supervisory Intervention was availed to
all regulated institutions through a circular and was meant to
give a good understanding of the new approach to supervision,
to help the industry to adopt good governance principles and
to promote transparency in relation to supervisory actions
taken by NAMFISA.
A NAMFISA Technical Committee was established to
determine more efficient ways (streamlining of institutional
investors’ off-shore investment applications) to improve the
process of off shore investor applications together with the
team from the Bank of Namibia. The Committees is in the
process of finalising their recommendations for approval by
the two institutional heads.
During 2013, the Authority continued to embark on the “Backto-Basics” regulatory initiative. This initiative stands for zero
tolerance for non-compliance by regulated entities
The department conducted eight (8) on-site inspections during
the year under review. The inspections were conducted to verify
compliance with the provisions of the relevant legislation; Unit
Trust Control Act of 1981 (Act no. 54 of 1981); as amended,
our registration requirements, the Inspection of Financial
Institutions Act 1984 (Act no. 38 of 1984) and on-going
obligation imposed on regulated entities and the provisions of
the Financial Intelligence Act of 2012.
Regulation 29 was gazetted during the period under review.
Regulation 29 is specific to the CIS Department as it deals with
statutory pension fund investments in unlisted equities (1.75%
of total assets under management). Investment Managers
wishing to deal in unlisted investments should be registered
and approved by NAMFISA as an Unlisted Investment
Manager (UIM). A Special Purpose Vehicle (SPV) must also
be registered as it is through the SPV that funding will be
channelled to the UIM. So far, the department has received a
few applications for SPVs and UIMs which are going through
process of assessment.
During 2012, the department engaged the industry on
regulations pursuant to the Unit Trusts Control Amendment
Act of 2011. These regulations were finalised by the department,
incorporating all relevant comments. The regulations have also
been finalised by the Ministry of Justice (Legal Drafters) and
forwarded back to the Ministry of Finance for final review
before forwarding to Parliament for tabling and noting.
During 2013, the Authority drafted the Conditions for the
regulation and supervision of investment managers under
section 4(1) of the Stock Exchanges Control Act. The Authority,
after taking the industry comments on the draft Conditions,
submitted the Conditions to the Minister.
Supervisory Developments
Supervisory Developments
INVESTMENT
INSTITUTIONS
71
The Capital Markets (CM) Department supervises the activities
of investment managers and the stock exchange and members.
The stock exchange is a self-regulatory organisation (SRO) and
regulates the activities of its members, i.e. the stockbrokers.
During the period under review, the CM department did not
approve any new Investment Managers.
The department conducted three (3) inspections during the
year. The inspections were conducted to verify compliance
with the provisions of the Stock Exchanges Control Act, 1985
(Act No. 1 of 1985) and the ongoing obligations imposed on
regulated entities under the Financial Intelligence Act, 2012.
Furthermore, NAMFISA will also verify that all Accountable
Institutions adopt and implement compliance measures consistent
with the Financial Intelligence Act No. 13 of 2012 (FI Act). The
relevant questionnaires have been distributed to the industry for
completion, where after, the assessment of fitness and propriety of
the key persons will be performed by the Department.
The Department has compiled Service Level Commitment
(SLC) for industry players under the supervision of the
Division. The SLC has been implemented organisational wide
and continuous monitoring of adherence to these performance
standards is ongoing.
The annual microlending industry forum took place in March
2014 under the theme: “Developments In Dedicated Legislation
For The Microlending Industry”. The Department conducted
roadshows in the Khomas; Erongo; Oshana and Oshikoto
regions of Namibia throughout the year under review.
Microlending regulatory and supervisory activities involved
review of a total of fifty- three (53) inspections. The inspections
can be broken down as follows:
• Post-registration inspections - 25
• Full-compliance inspections - 24
• Unregistered Lenders inspections - 4
Full-compliance inspections are conducted to verify
microlenders’ compliance to the provisions of Notices
numbers 189 and 196 of 25 August 2004, as issued in terms
of the provisions of the Usury Act, 73 of 1968. Unregistered
lenders inspections are conducted to verify compliance to the
maximum finance charges.
The authority will consider the structure and form of the
legislation governing the money lenders which include the
microlenders in the ensuring year.
Post-registration inspections were conducted to verify whether
microlenders adhere to NAMFISA’s office-infrastructure
requirements in terms of the existence of chairs, tables, personal
computer with subscription to a credit bureau as an example.
Supervisory Developments
In line with NAMFISA’s zero tolerance for non-compliance,
notices of cancellation of Microlending Registration were
issued to 17 microlenders and a total of 26 microlenders were
de-registered during the year 2013.
The Microlending and Credit Agreements Department has
crafted an Anti-Money Laundering/Combating Financing
Terrorism (AML/CFT) Action Plan with the assistance
and guidance from the AML and Inspections Department.
In this regard, a Public Notice has been issued alerting all
Accountable Institutions (i.e. microlenders) that NAMFISA
will be embarking on an exercise to assess the fitness and
propriety of persons currently controlling or participating in
the directorship and/or management of regulated entities.
Supervisory Developments
72
73
PROVIDENT
INSTITUTIONS
The Division continued with its activities to improve
service delivery to clients and enhance its supervisory and
regulatory interventions. The division’s key goals during the
period under review were to:
74
In its effort to augment the regulatory framework, the Division
issued two directives to medical aid funds by repealing Circular
No. PI/MA/3/2004 on trustee remuneration and Sections 2.5
and 2.6 of Circular No. 5/2002 that dealt with administration
costs paid to medical aid fund administrators. The Registrar
decided to rather place the responsibility on medical aid funds
to determine the level of fees paid to trustees of medical aid
funds for directing the activities of these entities. Instead
of prescribing these fees, the Registrar expects each medical
aid fund to adopt a remuneration policy that will guide the
determination of trustee remuneration. Medical aid funds will
further be required to discuss the remuneration of the Board
of Trustees at each Annual General Meeting and inform the
Registrar of the amount agreed upon to be paid to members of
the Board. This will allow the members of medical aid funds
to have an influence in deciding the fees that trustees can be
paid for serving as Board Members. It is believed that the funds
know best and understand the value that the trustees add to
the work of these entities and are therefore better positioned to
decide on the remuneration.
Circular No. 5/2002 prescribed the administration costs to be
paid to medical aid fund administrators. This circular which
set administration fees per member at N$80 was issued in
2002 and was never reviewed. Going forward medical aid
funds will be expected to directly negotiate administration
fees with service providers and ensure that these are included
in the service level agreements. Full implementation of, and
compliance to, these service level agreements will be assessed
through on-site inspections.
Amended Regulations 26, 27 and 28 to the Pension Funds Act
No. 24 of 1956 (the Pension Funds Act) were promulgated in
December 2013 and became effective as from 01 January 2014.
As per Regulation 26, the Registrar can impose administrative
penalties on pension funds which fail to comply with any
provision of the Pension Funds Act, regulation or legislative
instrument related to the regulation of pension funds. These
penalties were increased from a daily rate of N$10 to N$500.
Pension funds will further be charged a daily penalty of N$
1,000 for non-compliance to any provision of Regulation 28.
Subsection 4 of Regulation 28 was amended to allow pension
funds to invest a minimum of 1.75% and a maximum of 3.5%
of their total assets in unlisted investments. This is a new asset
class that was introduced by this regulation since exposure to
this asset class was not regulated, although some pension funds
had indirect exposure to these alternative assets. Investment
in property companies is however not recognised as unlisted
investments and neither are other assets which are listed in an
annexure to Regulation 28. This list of assets includes, but is
not limited to, government, corporate and state-owned, local
authority and regional council bonds. Regulation 28 further
reduces the amount of dual-listed stocks that qualify, as
domestic assets. The percentage of a fund’s total assets acquired
in a company incorporated outside Namibia that qualifies as
domestic assets (dual-listed) will be reduced from 30% starting
01 January 2014 to 10% starting 01 January 2018. Pension
funds are given 12 months, starting 01 January 2014, to comply
with the provisions of Regulation 28.
The division fully implemented the supervisory intervention
ladder and rolled out its on-site inspection plan for the year.
A total number of 40 inspections on 18 provident institutions
were inspected of which 12 were on pension funds, eight (8)
on medical aid funds and two (2) on friendly societies. Most
funds were classified under stage 2 (“Early warning”) of the
supervisory intervention ladder, five (5) were classified under
stage 3 (“Risk to viability or solvency”) and two (2) fell under
stage 5 (“Entity not viable or insolvency imminent”). The
Authority’s stages of intervention are generally similar across
regulated entities and are covered as an opening section to the
section on Supervisory Developments.
The inspections revealed that some regulated entities are
still faced with the following challenges:
• Lack of skills;
• Late submission and/or failure to submit statutory returns;
• Lack of various risk management policies;
• Continuous growth in unclaimed benefits;
• Lack of relevant information on members, i.e. beneficiary
nomination forms;
• Low reserve levels;
• Operating with unapproved fund rules;
• Poor internal controls; and
• Arrear contributions.
The Division engaged with all inspected entities to discuss
inspection findings and provide feedback. Whilst most
inspected entities addressed some concerns raised during
previous inspections, other regulated entities have done little to
identify and implement corrective action measures to mitigate
risks identified during inspections. The Division will continue
to further assess whether regulated entities have implemented
the Registrar’s recommendations to improve efficiency within
their operations and ensure that regulated entities are managed
in line with best corporate governance principles.
A total number of 18 procedure manuals were developed in
the Division. These manuals will serve as a guide to analysts
to ensure that the Division conducts its activities in a
consistent and efficient manner. Further manuals will still be
developed during the next financial year. The Division further
developed a service level commitment to assist in improving its
turnaround times and shared the same with regulated entities.
The program to roll out the quarterly returns for pension funds
and revised quarterly returns for medical aid funds could not
be fully implemented since the returns are still to be created in
the ERS. This is expected to be implemented during the next
financial year, commencing April 2014.
As a result, the Division is under pressure to ensure that it
keeps up with market developments and continuously enhance
skills capacity within the team. In total, nine (9) employees
were recruited during the period under review. This brought
the number of employees in the division to a total of 15. As part
of staff development initiatives, ten (10) employees attended
various training interventions to augment their skills. Most
employees have enrolled with different tertiary institutions,
and all employees continued to undertake courses offered by
the Financial Stability Institute.
Supervisory Developments
Supervisory Developments
• Ensure sound and appropriate regulatory framework;
• Effective and efficient supervision;
• Ensure effective and efficient operations;
• Increased productivity; and
• Ensure responsible financial management.
Regulation 27 in turn prescribes the rate of interest that
pension funds should charge on housing loans granted to
their members. Previously this rate was set at 16% which is
now reduced to the repo rate (5.50%) charged by the Bank of
Namibia, plus 4%. This interest rate is higher than the current
prime lending rate of 9.25%. The current prescribed variable
rate could be viewed as on the high side, particularly for those
who have bargaining power in the market, but this rate is
highly comparable to the fund’s return on investments from
investing in other financial assets. Therefore, pension fund
members are benefiting by paying a market-related rate on
their housing loans and having access to funding to purchase
or develop houses to own and occupy. For the pension fund
this is an investment vehicle whereby the rate of return from
the housing loan directly benefits the members’ individual
account. Therefore, members of pension funds who are granted
direct loans or guarantees by pension funds are expected and
encouraged to pay back their loans and avoid defaulting.
75
76
The Insurance Division’s key focus areas for the current financial
year continues from the 2012/2013 financial year, i.e. onsite
inspections of all registered insurance/reinsurance entities
and an appropriate risk assessment for each these entities;
implementation of the supervisory enforcement ladder, review
of business processes, stakeholder engagements, production of
quality data/information to the industry on a quarterly basis
and employee training and development.
An extensive review of the Long-term and Short-term
Insurance Acts and subordinated directives and circulars
were done during the previous financial year with the aim to
establish effective enforcement of all provisions. Following this
exercise, the Division embarked on a plan to address identified
non-compliance by regulated entities which led to the issuing
of a number of directives and circulars. The primary goal of
issuing these directives and circulars was to:
The Division conducted inspections on all registered entities
according to the approved supervisory plan for the year. A
comprehensive risk rating process was followed in identifying
and categorising regulatory concerns so as to facilitate
appropriate regulatory interventions by the Registrar. Common
or similar findings across the industry were noted, resulting in
various interventions. These included the issuing of penalties
and fines for non-compliance, issuing of directives and circulars
and interaction with senior management to address noncompliance practices. Continuous monitoring and additional
offsite analyses were carried out in order to ensure that areas
of concern raised by the Registrar are appropriately addressed.
• Rectify incorrect practices;
• Provide clarity on inconsistent practices; and
• Request improved practices to ensure a better regulated
insurance industry.
The business review processes was performed to identify areas
of improvement as well as to develop procedure manuals that
can assist employees in maintaining consistency and efficiency
when executing their duties. The ultimate aim is to fully utilise
the Electronic Regulatory System (ERS) so as to improve
operational efficiency and to improve turn around times.
The project will continue during the next financial year with
regard to ERS utilisation and further work will be performed
to ensure harmonisation of similar business processes across
all supervisory divisions of NAMFISA.
During the year under review, the Division successfully hosted
two industry consultation meetings where contentious matters
were discussed. Moreover, as part of the Division’s wider
stakeholder engagement plan, topical industry workshops
were also facilitated and/or attended.
On a quarterly basis, the Insurance Division issued consolidated
reports for both the short- and long-term insurance industries.
In addition to providing financial information and statistical
analyses as part of the Division’s offsite supervisory mandate,
these reports also highlight and elaborate on industry trends
and market developments. Furthermore, the Division
embarked on a comprehensive review of its quarterly returns
and these enhanced returns will be available for utilisation by
the insurance industry during the next financial year.
The continual identification of improvements is a daily awareness
culture to which the Insurance Division strives to adhere to.
An amendment of long-term insurance regulations to the LTI
Act was finalised and published in the Government Gazette of
Namibia on 31 December 2013 (Government Notice No. 350)
also withdrawing the Government Notice No. 126 of 31 May
2013. The amendment comprised of changes to regulation
1 and a substitution of regulation 15. All registered insurers
and reinsurers are required to comply with the new limits
of investments as stipulated in the amendments effective 1
January 2014.
The Insurance Division further compiled a Financial
Intelligence Act (FI Act)/Anti-Money Laundering (AML)
compliance programme and developed a fit and proper
assessment criterion during the current financial year. Returns
based on this programme were disseminated to the insurance
industry and all regulated entities were required to complete
these returns before 01 April 2014. The division is in the
process of drafting an industry wide report that will be released
during the next financial year.
The Insurance Division contributes on a quarterly basis to the
Consumer Education bulletin. During 2013, the division wrote
two (2) informative articles; one providing explanations on the
maturity values for the long-term insurance industry and the
other explaining the rights and responsibilities of the various
parties within the short-term insurance industry.
The Insurance Division also monitors complaints received
by the NAMFISA complaints department. The Division
provides technical assistance when required and a summary of
complaints received is communicated to the industry in order
to propose actions on how to deal with complaint resolution,
both from a policy holder and an insurance company/
intermediary perspective.
Supervisory Developments
Supervisory Developments
INSURANCE
INSTITUTIONS
77
SUPERVISORY SUPPORT
Inspections and AML/CFT compliance
During the year under review, the Department recruited 4 staff
members, two AML compliance officers and two inspectors.
This brings the department to a full staff compliment as per the
approved structure.
NAMFISA Hosts SADC
Finance Watchdogs –
New Era
The Department commenced with three triggered inspections.
Two of the inspections were outsourced due to staff constraints.
One of the outsourced inspection was at the finalisation stage
at the time of reporting. The Department also developed
standard terms of reference for use in outsourced inspections.
by Eveline De Klerk
78
Shiimi addressed close to 75 participants from various financial
regulators in the SADC region attending the 31st biennial
five-day meeting of the Committee of Insurance, Securities
and Non-BankingFinancial Authorities (CISNA) underway
in Swakopmund. The CISNA meeting started on Monday and
its main objective is to evaluate progress made with regard to
the implementation of the CISNA Strategic Plan (2010-2015)
and to discuss the activities of its various sub-committees.
According to Shiimi there are huge expectations placed on
their shoulders as financial regulators by the public that wants
to see the creation of skills, capacity and the empowerment of
people not only in Namibia, but in the entire SADC region to
ensure their successful participation in the financial industry.
“Therefore the importance of CISNA for SADC cannot be overemphasized. We all know that the organ was established to
assist with the establishment of an integrated financial market
within the SADC region.
In view of that CISNA meets twice a year to share experiences and
expertise. Shiimi says there is no doubt the strong foundations
of cooperation the organ has put in place throughout its
existence will facilitate further growth and expansion of the
financial sector in the SAD region. “It provides a sound basis for
all member regulators in our region to improve their regulatory
systems to create a seamless financial system that addresses
each other’s needs across our borders. I believe the financial
sector is the engine and an important catalyst for economic
growth. Thus your efforts as regulators should be geared
towards creating a conducive environment for investment and
economic growth,” Shimi said. NAMFISA is hosts the CISNA
meeting that seeks to achieve the organ’s vision by championing
a process of collaboration, engagement and co-ordination
between regional non-banking financial institutions and other
important stakeholders.
CISNA was created by the SADC Protocol on Finance and
Investment and comprises non-banking financial institution
authorities, capital markets, collective investment schemes,
insurance companies, retirement funds and providers of
intermediary services. It also aims to reduce the potential
for systemic risks, informing and protecting consumers,
mobilising capital flows and contributing to prosperity in the
SADC region. It was established in 1998 and reports to the
SADC Committee of Ministers of Finance and Investment.
CISNA members consist of 15 SADC member countries, which
include Angola, Botswana, the Democratic Republic of Congo
(DRC), Lesotho, Madagascar, Malawi, Mauritius, Mozambique,
Namibia, Seychelles, South Africa, Swaziland, Tanzania,
Zambia and Zimbabwe.
AML tools and guidance manuals for use in AML/CFT
compliance supervision were developed. These are the fit and
proper questionnaire, assessment guide, reporting template
and the AML Compliance Programmes. The supervisory
departments were actively involved in the development of
supervision tools, policies and guidance documents.
Quarterly consultative sessions were held with the Financial
Intelligence Centre (FIC) to ensure a joint and co-ordinated
approach for AML/CFT compliance monitoring and
supervision. The Department, in conjunction with the FIC,
conducted an AML/CFT training session for supervisory staff.
Three sessions were also held with the supervisory departments
to educate them on their AML/CFT compliance monitoring
and supervisory role.
The Complaints Department is responsible for receiving and
resolving complaints lodged on financial Services and products.
The Department aims to resolve 80% of all complaints received
within the year on a quarterly basis. During the year under
review, about 96% of all received complaints were resolved. The
complaints by Industry were as follows:
Complaints status for 2013
Industry
Microlending and
Credit Agreements
Long-term Insurance
Short-term Insurance
Pension Funds
Collective Investment
Schemes
Capital Markets
Medical Aid Funds
Friendly Societies
Others
Total
Received
Resolved
In-Progress
167
166
1
95
91
4
43
40
3
56
51
5
0
0
0
2
2
0
3
3
0
0
0
0
0
0
0
366
353
13
All complaints received and their outcomes are collated on a
monthly, quarterly and annual basis. During the year under
review, the department received 366 complaints compared
to 422 in 2012. This indicates a significant decrease in the
number of complaints received which may indicate healthier
or improved levels of market conduct by financial institutions
and its representatives resulting in more satisfied consumers.
Complaints received range from non-cancellation of
contracts, non-payments of pension benefits, repudiation
of legal insurance claims, repudiation of funeral benefit
claims, repudiation of death benefit claims, repudiation of
disability benefit claims, repudiation of hospital benefit claims,
overcharged interest, non-provision of information, claim
disputes, policy lapses, over-payments on loan accounts, illegal
deductions and extension of loan repayment periods.
Further, during the period under review, the Department recovered
an amount of N$ 1 437 684 in benefit claims and refunds paid by
the financial institutions to consumers who lodged complaints.
In terms of Long-term Insurance institutions an amount of N$
138 346 was recovered while in terms of Short-term Insurance
institutions an amount of N$ 138 346 was recovered.
In terms of pension funds, an amount of N$ 446 478 was
recovered while an amount of N$ 410 194 was recovered from
microlending and credit agreement institutions. An amount of
N$ 596 was recovered from a medical aid fund.
Supervisory Developments
Supervisory Developments
Swakopmund — The Chief Executive Officer of the Namibia
Financial Institutions Supervisory Authority (NAMFISA)
Philip Shiimi said financial regulators in the SADC region
should avoid dictating to entities they regulate by being on
par with market developments to minimize their risks and to
become leaders rather than followers.
Complaints
79
Stakeholder Surveys
2013/2014 – Key learning
points
RESEARCH POLICY AND
STATISTICS
80
The Division finalised the drafting and provided support in the
publication of Regulation 15 under the Long-term Insurance
Act and Regulations 28 and 29 under the Pension Funds Act.
These Regulations were Gazetted on 31 December 2013.
In terms of strategic regulatory reform, the Division completed
the drafting of the NAMFISA Bill and the Financial Institutions
and Markets (FIM) Bill. The Cabinet Committee on Legislation
approved the Bills on 1 August 2013 with suggested changes.
The Division continued to draft and review Standards and
Regulations to be promulgated under the FIM Bill.
Regulatory reform is partly aimed at better consumer
protection. In this regard, the Division enabled the Authority to
submit the draft Financial Services Ombudsman (FSO) Bill to
the Minister in November 2013. At the Minister’s request, the
Division started working on a cost-benefit analysis in respect
of the Ombudsman, particularly in regards to the ombudsman
model and funding that Namibia should adopt.
The Authority plays a joint pivotal role with the Bank of
Namibia in assessing, evaluating and reporting on financial
sector strategy and financial stability for Namibia. During the
year under review, the Division was involved in producing one
report on Financial Stability and gave input to the crafting of
the framework for evaluating and monitoring of the financial
sector strategy.
NAMFISA participates in regional and international supervisory
bodies and organisations, and was requested to host the 2013
CISNA (Committee of Insurance, Securities and Non-banking
Financial Authorities) meeting. The Division assisted in the
planning and hosting of a successful CISNA meeting in October
2013. Furthermore, the Division is the Secretariat for all the
engagements with stakeholders and as such, handles related
issues with the Ministry of Finance and Bank of Namibia. The
Research, Policy and Statistics Division acts as the Secretariat
for the Insurance Advisory Committees and has drafted the
Terms of Reference of these two Committees.
To keep its stakeholders informed and for the purposes of the
NAMFISA Act, NAMFISA publishes an annual report and
statistical quarterly bulletins. The Division co-ordinated and
published three Quarterly Statistical Bulletins and the 2013
Annual Report.
Questionnaires were issued to participants to assess the
Authority’s handling of the industry forums. The Authority was
pleased by the response rate in the surveys which was recorded
at above 90% success rate at all industry forums.
The industries expressed willingness to have frequent
engagements with the various regulatory divisions and to get
timely feedback of decisions and actions taken in previous
meetings.
The survey results are important when the Authority is
formulating its communications strategy. Thus, one of the
lessons from the forums is that feedback is of great value in
championing of operational efficiency and effectiveness.
The Authority is considering a wider platform in which
feedback on its role in major activities and/or reforms can be
channeled for assessment and analysis.
All surveys could be classified as a measure of how the industries
viewed the Authority’s activities at the forum and thus may not
reflect on how the Authority is viewed in terms of its overall
mandate. Thus, future surveys will be designed to cover more scope.
Supervisory Developments
Supervisory Developments
Research Policy and Statistics, provided support to the
Authority in three key areas: regulatory reform, supervisory
co-operation, and publications.
During the year under review, industry forums were conducted
for investment institutions, medical aid funds, microlending
institutions and retirement funds. All industry players welcomed
the Authority’s move to create open, interactive platforms for
progressive and constructive engagement.
81
Industry Review
Industry Review
82
INDUSTRY
REVIEW
83
New registrations during the year 2013.
Institution
Registered
entities as at
31/12/12
New Registered
entities during
year 2013
Long-term Insurance Companies
(Intermediaries)
16(3820)
0(124)
Short-term Insurance Companies
(Intermediaries)
12(446)
0(161)
Reinsurers
2
0
Medical Aid Funds
9
0
121
2
Collective Investment Schemes
12
1
Investment
Managers
41
0
267
28
Stock Exchanges
1
0
Stock Brokers
(exclude sponsors
of SB)
4
0
Friendly Societies
2
0
487(4266)
31(285)
Pension Funds
Microlenders
Total
Deregistrations during the year 2013.
Institution
Deregistered
entities during
year 2013
Registered
Entities
As at 31/12/13
Long-term Insurance Companies
(Intermediaries)
0(1693)
16(2265)
Short-term Insurance Companies
(Intermediaries)
0(35)
12(572)
Reinsurers
0
2
Medical Aid Funds
0
9
12
111
Collective Investment Schemes
0
13
Investment Managers
13
28
Microlenders
22
273
Stock Exchanges
0
1
Stock Brokers
(exclude sponsors
of SB)
0
4
Friendly Societies
0
2
47(1728)
471(2837)
Pension Funds
Total
INVESTMENT
INSTITUTIONS
The Authority supervises the stock exchange, investment
managers, management companies, trustees of unit trust
schemes, and microlenders in terms of the governing
legislation. Its oversight extends to one exchange, 28
investment managers, 13 management companies, three
trustees and 273 microlenders as at 31 December 2013.
These financial institutions and intermediaries collectively
fall under “Investment Institutions”, and the Authority
supervised them under the Capital Markets, Collective
Investments Schemes and Microlending Departments.
Collective Investment schemes
The Department registered one management company namely,
Allan Gray (Namibia) Unit Trust Management Limited during
the year under review, which brought the total number of
registered management companies to 13.
Investments in CISs or Unit Trusts continued to increase
during the year. Total funds held under management for the
year ending 31 December 2013 were N$37.3 billion compared
to N$32.2 billion as at 31 December 2012 representing an
increase of 15.8%. The chart below depicts the amounts
invested in Unit Trusts per Source of Fund over a period of five
years (N$ millions):
Pension funds
40,000
Short-term insurance
companies
35,000
84
30,000
Long-term insurance
companies
25,000
Medical aid funds
20,000
Unit Trust schemes
15,000
Companies
10,000
Natural persons
Other
5,000
0
2009
2010
2011
2012
2013
Total
During the period under review, the industry had a 155.6% increase in investments in listed equities from N$3.6 billion in
2012 to N$9.2 billion in 2013, whilst investments in unlisted equities also steeply rose by 811.2% from N$187 million in 2012
to N$1,704 million in 2013.
The following chart shows the proportions invested under
CISs in Namibia, offshore and in the Common Monetary
Area as at 31 December 2013:
Namibia
Common Monetary Area
Offshore
51 %
44 %
5%
Industry Review
Industry Review
The Collective Investments Schemes (CIS) Department, which
previously formed part of the Capital Markets Department, was
established in April 2013. At the inception of the Department,
there were 12 registered management companies which had a
combined amount of N$31.1 billion in assets under management.
85
Microlending and Credit Agreements
Capital Markets
The Usury Act, 1968 (Act No. 73 of 1968) sets the maximum
annual finance charge rate that may be charged in connection
with a money lending transaction, a credit transaction or a
leasing transaction. The annual finance charge rate is confined
to twice the average prime rate charged by banking institutions
of Namibia in respect of microloan transactions.
Namibia Stock Exchange
As at 31 December 2013, a total of 34 companies were listed on
the Namibian Stock Exchange (NSX); comprising of 27 listings
on the Main Board (of the listings, 8 are primary listed and 19
dual listed on the NSX) and 7 are dual listed on the Development
Capital Board.
Market composition and size
The market capitalisation of the NSX increased by 3.7% from
N$1,357.2 billion as at 31 December 2012 to N$1,407.7 billion as
at 31 December 2013. The local market capitalisation increased
by 70% during the period under review from N$11 billion
as at 31 December 2012 to N$18.7 billion as at 31 December
2013. The Development Capital Board had seven listings with a
market capitalisation of N$1.7 billion as at 31 December 2013.
During the period under review, a total of 28 additional
microlenders were registered while 13 were deregistered with
NAMFISA, bringing the total to 273 as at 31 December 2013
from 266 as at 31 December 2012.
Financial performance
The observed increase in borrowings can be ascribed to the
increased demand for credit that the commercial credit and
banking institutions is not able to meet for any reason, for
instance, poor credit record or lack of credit records. The
aforesaid development was also consistent with the increase in
the number of registrations of microlenders observed over the
same period.
The issuance of new payday and term loans grew at an average
annual rate of 5.7% during the past five years, i.e. from 2009 to
2013. The total number of new loans rose by 14% from 613,307
in year 2012 to 698,460 in year 2013. The growth was mainly
caused by “ripple effects” as payday lenders continuously
renew their loans month after month. Also, the higher volumes
on issuance of payday loans can be attributed to the continued
influx of microlenders into the industry who are able to tape on
the increased loan demand.
The average loan obtained from a term lender amounted to
N$14,293 and that obtained from a payday lender N$1,064.
The graph below shows the average loan amounts disbursed
to term and payday lenders over a period of five years (in N$):
The sharp increase in local market capitalisation could mainly
be attributed to the issuance of new additional shares by listed
companies. A total of 15 of the 27 companies listed on the Main
Board issued new or additional shares during the year to 31
December 2013. The main contributors were in the Financial
and General Financial Sectors and the outstanding individual
counters were Bank Windhoek Holdings Limited, Nedbank
Group, Standard Bank Group, Investec Limited, Stimulus
Investment Limited and Trustco Group who all issued new
additional shares.
There were also new share issues in the consumer goods and
consumer services counters, with Oceana Group Ltd, Nictus
SA and Truworth all issuing new shares during the year under
review.
The NSX local index increased by 21.2% from 274 points as at
31 December 2012 to 332 points as at 31 December 2013. The
overall index, on the other hand, was nearly flat, recording a
1.3% increase from 984 as at 31 December 2012 to 997 as at 31
December 2013. The chart below depicts the trends in the local
and overall indices over the past 5 years.
NSX overall index
(points)
1,200
1,000
NSX local index
(points)
800
Industry Review
Industry Review
The total Namibian Dollar value of loans disbursed increased to
N$2.2 billion during the year 2013, representing a growth of 37.5%
from N$1.6 billion reported in 2012. Of the total loans disbursed
in 2013, term loans amounted to N$1.6 billion, equivalent to
72.7% of the total disbursed loans, while payday loans constituted
the remaining 27.3% with a value of N$620 million.
Other contributors to the increase in market capitalisation are
the Insurance and the Real Estate Sectors where Old Mutual
plc, Vukile and Oryx Property Fund also issued new additional
shares during the one-year period to 31 December 2013. Basic
materials also contributed with new shares issued by AngloAmerican plc, Paladin Energy Ltd and Barloworld Ltd.
600
86
87
400
16,000
Term lenders
14,000
Payday lenders
12,000
0
2009
2010
2011
A total of 871 million new shares were issued on the NSX
during the year. The issuance of new shares is the primary
driver of the NSX market cap increase for the year.
10,000
8,000
6,000
4,000
2,000
0
200
2009
2010
2011
2012
2013
2012
2013
Sector Review
Investment management
Basic materials
Investment managers held assets under management of
N$123.3 billion as at 31 December 2013, an increase of N$14.1
billion or 13% from N$109.1 billion as at 31 December 2012.
The sector delivered a negative return of -12.8% for the year
2013, underperforming both the NSX Overall and Local
indexes. The worst sector performers were mining that saw
all mining counters posting negative returns. Paladin Energy
Limited was hard hit and ended in negative 50.8% for the year,
while the B2Gold Corporation lost ground too, and ended the
year at negative 28.8%. Anglo-American plc. was third worst at
negative 11.6%.
Industrials
The industrial sector delivered a return of 14.7% for the year,
outperforming the NSX Overall index by eleven times. The industrial
sector is composed of only one counter, Barloworld Limited.
Consumer goods posted a positive return of 18.1% over the
one year period to 31 December 2013, with Namibia Breweries
leading the pack at 28.3% and the Oceana Group coming in
second at 15.7%. The third counter in the sector, the Bidvest
Group, posting only a 0.7% for the year.
Consumer services
88
Consumer services had an extremely difficult period during
2013, retreating to negative 23% over the period to 31
December 2013. Truworth was the worst performer in the
sector, retreating 29.6% over the one year to 31 December
2013. Shoprite also performed poorly and recorded a negative
19.8% while the third counter in the sector, Nictus Holdings
Namibia, remained flat at 0% over the one year period.
Financials
Financials posted a return of 16.7% over the one-year to 31
December 2013. The financial sector is the biggest sector on
the NSX both in terms of market capitalisation (N$896,257
billion accounting for 64% of total NSX market capitalisation)
and number of listings (15 listings accounting for 55.6% of the
total listings on the NSX). The Financials sector was boosted by
Namibia Asset Management, the front-runner at an impressive
77.8% for the year. Old Mutual plc. was the second performer
at 34.2%, while First National Bank Namibia Holdings was
third at 30.3% Investec Limited being fourth at 26.5%.
Assets under management, based on Asset Allocation (per
investment instrument), indicate that listed equities continue to
be the asset class of choice, accounting for 47% of assets under
mangement as at 31 December 2013, compared to 48.6% as at 31
December 2012. Money market instruments represented 28.6%
of total assets, down from 31.2% held at 31 December 2012.
Listed debt accounted for 14.2% of assets under management,
unchanged compared to the same 14.2% of total assets held by
investment managers as at 31 December 2012.
Asset allocation per Source of Funds show that pension fund
assets continue to constitute the biggest portion of assets under
management with a 58% share of total assets held by investment
managers as at 31 December 2013. Unit Trust Schemes are
second with total assets of N$28.4 billion, representing 23% of
total assets under management. Long-term insurance companies
hold the third largest portion at N$18.8 billion or 15.2% of total
assets under management as at 31 December 2013.
Year-on-year, pension fund assets increased by 14.7% from
N$62.4 billion as at 31 December 2012 to N$71.6 billion as at
31 December 2013. The assets under management of Collective
Investment Schemes increased by 7.9% from N$26.2 billion
as at 31 December 2012 to N$28.4 billion as at 31 December
2013. Long-term insurance assets increased by 16.5% from
N$16.1 billion as at 31 December 2012 to 18.8 billion as at
31 December 2013. Short-term insurance assets managed by
Collective Investment Schemes on the other hand substantially
decreased by 106% from N$770 million as at 31 December
2012 down to N$373 million as at 31 December 2013.
Industry Review
Industry Review
Consumer goods
Assets under management based on country or geographic
allocation show that Namibian domiciled assets constituted
N$58.6 billion or 47.5% of total assets as at 31 December
2013, slightly down from N$55 billion or 50.5% of total assets
the previous year. The Common Monetary Area (CMA)
assets accounted for N$48.5 billion or 39.3% of assets under
management, an increase of 16.3% compared to N$41.8 billion
or 38.2% of total assets as at 31 December 2012. Offshore assets
constituted the remaining N$16.3 billion or 13.2% of assets
under management as at 31 December 2013, an increase of
32.5% compared to N$12.3 billion or 11.3% share of total assets
as at 31 December 2012.
89
PROVIDENT INSTITUTIONS
The Authority supervises retirement funds, medical
aid funds, and friendly societies in terms of governing
legislation. These institutions collectively fall under the
Provident Institutions Division.
90
Industry overview
Membership
As at 31 December 2013, there were 111 active retirement funds
supervised by the Authority of which two defined contribution
funds were registered during the year. Therefore the number of
active retirement funds declined from 121 over the year under
review to 111 funds as at 31 December 2013. The decline by ten
came as a result of 12 funds which were classified as inactive
(four voluntarily deregistered and eight were going through
the process of deregistration or liquidation) on the backdrop
of two approved new funds. There were 145 inactive funds as
at 31 December 2013.
As at 31 December 2013 the total membership in the
retirement fund industry stood at 297 455; of which 258 769
were active members and 38 686 pensioners. This is a 2.7%
increase in total membership from 31 December 2012. The
chart below depicts membership totals for the five years from
year 2009 to 2013.
The total number of defined contribution and defined benefit
funds as at 31 December 2013 were 109 and 2 respectively.
The number of umbrella funds remained at 10 (all defined
contribution schemes).
Industry Review
Industry Review
Pension Funds
A total number of 95 retirement funds submitted financial
reports for the period ended 31 December 2013, as compared to
93 submissions received for the period ended 31 December 2012.
During the year under review, the department carried out
12 on-site inspections and zero off-site reviews of retirement
funds. The Authority also approved 135 or amended rules of
retirement funds.
91
350,000
Total membership
300,000
Active members
250,000
200,000
150,000
100,000
50,000
0
2010
2011
2012
It is worth noting that although the number of active retirement
funds declined during the year under review, a positive growth
was observed in the total number of members on retirement
funds. The positive growth is mainly attributable to the increase
of 33.5% in membership of umbrella funds. The total number
of members on umbrella funds were 63 650 as at 31 December
2013, as compared to 47 683 at 31 December 2012. This increase
2013
is mainly as a result of umbrella schemes becoming a popular
choice for most new employers sponsoring employees’ group
pension benefits to participate so as to benefit from economies
of scale. Also the increase is linked to some stand-alone funds
which deregistered and joined the umbrella funds, thus also
causing a reduction in the number of active funds as stated at
the beginning of this paragraph.
Income and expenditure
Expenses
Contributions
Expenses incurred by retirement funds increased by 23%
from N$605 million to N$745 million in 2013. The expense
amounts include investment management fees, which are
usually charged as a percentage of market value of assets under
management. It must however be noted that it is common
practice in the industry to disclose investment income net of
The overall contributions received by retirement funds
increased by 13.9% from N$3.9 billion to N$4.4 billion during
the year under review. Membership for the review period only
increased by 2.8%, therefore 13.9% increment in contributions
could mainly be attributed to salary increases. Chart: 2012
and Chart: 2013 provides a comparison of contribution
composition for the years 2012 and 2013.
Chart 2012
Chart 2012
Member Contribution towards Retirement
Emplyoyer Contribution towards Retirement
Additional Voluntary Contribution (AVC)
Contribution towards Costs
Other
Chart 2013
32 %
34 %
10 %
24 %
Chart 2013
40.0 %
51.2 %
0.4 %
8.0 %
0.4 %
fees, which means the amount indicated as investment fees may
be understated (as a portion of this cost is already accounted
for under investment income). If investment management fees
are excluded, then there was an increase in costs of 14%. The
charts below show the proportion of costs per category during
year 2012 and 2013:
Administration Fees
Insurance Premiums
Other costs
Investment Fees
31 %
30 %
10 %
29 %
35.9 %
56.3 %
0.4 %
7.3 %
0.1 %
The main method of funding costs is through employer contributions towards expenses
92
Charts below provide a breakdown of the benefits paid at
industry level in 2012 and 2013.
On a proportionate basis, the employers’ contributions increased by 5.1% during the period under review as compared to 4.1%
decrease in employees’ contributions towards retirement savings. Additional voluntary contributions remained at 0.4% of total
contributions. The contributions towards costs (fund expenses and risk benefits premiums) decreased by 0.7% as proportion of total
contributions. This indicates that the average rate at which employers’ are contributing towards retirement increased due to higher
actual employer contribution portions compounded by the proportionate decrease in contributions toward costs which are normally
netted of the gross employer portion.
Chart 2012
Chart 2013
55 %
34 %
10 %
1%
0%
Withdrawal Benefits Paid
Retirement Benefits Paid
Death Benefits Paid
Disability Benefits Paid
Funeral Benefits Paid
55 %
34 %
10 %
1%
0%
Liquidity
The ability to meet short-term liabilities is of great importance
to retirement funds. Therefore, if monthly inflows in the form
of contributions are able to meet these benefit payments it will
reduce the necessity to disinvest money from the investment
markets which will incur costs and hamper overall long-term
growth. Liquidity is defined as the ratio of ‘contributions due
and received’ to ‘expenses and benefits due and paid’. As such,
a value greater than 1 means the contributions would be able
to cover the payment of the costs and benefits, while a value of
less than 1 would be an indication to the contrary.
As at 31 December 2013, this ratio stood at 1.02, which indicates
that at an overall industry level, the contributions would have
been able to cover the expenses and benefits that became due
during the year under review.
Total transferred and cashed benefits increased by 24.9%, from
N$2.9 billion in 2012 to N$3.6 billion in 2013. Lump Sum
Benefits paid increased by 20.1%, with benefits paid as lump
sums on withdrawal accounting for 51.6% of the total amount,
followed by lump sum payments on retirement at 39.8%. The
amount paid in benefits is increasing on a yearly basis and is of
great concern as it would seem that most of the pension savings
which are supposed to be preserved until retirement, and only
being utilised during retirement, are paid out in cash to members
before they reach their retirement age. Although there is no law
in Namibia that prescribes mandatory preservation, the current
practice of early withdrawals go against the basic principles
and objectives of pension savings. Non-preservation is a major
concern as inadequate funds at retirement are not only to the
detriment of the individual but also places an extra burden on
the fiscus through higher levels of dependence on old age grant
provisioning and financial support.
Industry Review
Industry Review
Benefits
93
Assets and Liabilities
The table below show jurisdictional asset allocation by class over the last three years
Total assets increased by 23.2% from N$86 billion as at 31
December 2012 to N$105.2 billion as at 31 December 2013.
The non-current assets increased by the same rate of 23.2%;
from N$84.4 billion as at 31 December 2012 to N$104.0
billion as at 31 December 2013. Total members’ fund credits
(accumulated funds) increased by 14.5% from N$45.8 billion
to N$52.5 billion, while pensioner amounts remained at the
N$9.0 billion level over the year under review. The increase in
assets is mainly attributed to positive investment returns and
capital appreciation.
Jurisdictional asset allocations
Asset
Classes
Namibia
N$ (‘millions)
2011
Equities
Fixed Interest
Property
Cash/Money
market
Common Monetary Area Outside CMA
(CMA) N$ (‘millions)
N$ (‘millions)
2012
2013
2011
2012
2013
2011
Total
N$ (‘millions)
2012
2013
2011
2012
2013
16 528
20 220
23 009
13 148
15 009
18 148
12 549
11 685
27 308
42 224
46 914
68 466
5 735
5 728
6 608
6 768
7 640
8 263
3 985
4 856
6 095
16 488
18 223
20 966
506
533
597
252
233
323
14
56
90
772
822
1 010
3 912
3 563
3 998
1 080
529
838
407
5 865
560
5 399
9 957
5 396
358
624
929
9
6
7
331
544
835
697
1 174
1 770
Investments
Unlisted
investments
Other
4 445
5 039
5 130
2 896
511
- 223
1 791
1 535
1 097
9 131
7 084
6 004
From an investment perspective, a steady growth in market
value can be noted in the chart below. The market value
increased from N$55.8 billion at the end of year 2009 to just
over N$100 billion by end of year 2013
Totals
31 484
35 706
40 270
24 152
23 928
27 357
19 076
24 540
35 985
74 712
84 174
103 613
Chart: Market Value of Investments (N$’000)
Market Value
120,000,000
100,000,000
94
60,000,000
40,000,000
20,000,000
-
2009
2010
2011
2012
The total invested assets as at 31 December 2013 were recorded
at N$103.6 billion compared to N$84.2 billion as at 31
December 2012. This equates to a 23.1% increase in invested
assets as a result of net positive cash inflows from contributions
and favorable investment returns. Quite a significant portion
2013
of the retirement funds’ assets were invested in Namibia. From
the data provided in the chart below, a shift can be seen towards
investments outside the common monetary area since this
portfolio increased by 5.5% of the total invested assets during
the period under review.
Chart: Geographical allocation of Investments
45.0 %
Namibia
40.0 %
Common Monetary
Area (CMA)
35.0 %
Outside CMA
30.0 %
25.0 %
20.0 %
15.0 %
10.0 %
5.0 %
0.0 %
2010
2011
2012
2013
Industry Review
Industry Review
80,000,000
95
MEDICAL AID FUNDS
Industry overview
Income and expenses
There has been no growth, in terms of the number of medical
aid funds registered during the year under review. The number
of active funds remained unchanged at nine as at 31 December
2013. This constitutes five closed and four open funds. Closed
funds are exclusive to specific employer or employer groups
while open funds are open to the general public.
The industry recorded consolidated gross contributions income
of N$2.3 billion during the 2013 financial year, which is 15.7%
higher than N$2.0 billion recorded in 2012. This increase
was mainly attributable to annual increases in contribution
premiums as well as growth in membership. The increase in
contributions approved by the Registrar: Medical Aid Funds for
the year 2013 ranged between 7.0% and 10.4%. The weighted
average increase in contribution premiums for open medical
aid funds 9.9% which is slightly higher than the 9.0% weighted
average increase in contribution premiums for closed medical
aid funds, for the year under review. The aforementioned
weighted averages were calculated with reference to the audited
total fund beneficiaries as at 31 December 2013. The Registrar:
Medical Aid Funds, in approving the proposed contribution
premium increases, considered the following assumptions made
by the respective medical aid funds, amongst all other factors:
Membership
96
The number of dependents rose by 6.8% from 90 622 to 96
769. The dependent ratio which measures the average number
of dependents per principal member remained unchanged in
2013 and was calculated as 1.3 and 1.4 for open and closed
medical aid funds respectively.
Pensioner membership which represents 2.7% of total
membership, increased by 36.3% from 3 460 reported as at 31
December 2012 to 4 715 reported during the current year. Open
medical aid funds had more pensioner fund members (83.7%)
than closed medical aid funds (16.3%) as at 31 December 2013.
• Medical inflation;
• Aging of fund beneficiaries;
• Expected utilisation of benefits due to aging of fund
beneficiaries; and
• Expected utilisation of benefits due to non-ageing factors.
The total administration costs for the period under review
increased by 16.3% from N$161.4 million in 2012 to N$188
million recorded for the year ended 31 December 2013. Total
administration costs for 2013 accounted for 8.1% of gross
contributions. The increase in total administration costs was
as a result of fee escalations by the fund administrators and
is also an indication that some additional responsibilities
were delegated to the fund administrators, such as marketing
activities of the respective funds. The level of administration
costs will differ between medical aid funds, depending on the
specific services provided by the Administrator. The past five
year trend indicates that administration costs have increased
from N$106.1 million in 2009 to N$188.0 million in 2013,
representing a 77.0% increase.
Managed healthcare fees increased by 14.4% from N$31.1
million in 2012 to N$35.6 million in 2013. Managed healthcare
fees relate to any effort to promote the rational, cost-effective and
appropriate use of healthcare resources. Managed healthcare
includes clinical and financial risk assessment and management
of health care, with a view to facilitating appropriateness
and cost-effectiveness of relevant health services within the
constraints of what is affordable, through the use of rules-based
and clinical management-based programmes.
Total non-healthcare expenditure rose by 14.4% from N$231.4
million in 2012 to N$265.5 million in 2013. Administration
cost was the main component of non-healthcare expenditure
constituting 70.7% (2012: 69.8%) followed by managed healthcare
management fees which accounted for 13.4% (2012: 13.4%) of
total non-healthcare expenditure for the 2013 financial year.
The industry recorded a smaller underwriting deficit of N$16.1
million in 2013 compared to the underwriting deficit of N$25.4
million reported in 2012. The decrease in the underwriting
deficit was mainly attributable to an increase of 15.7% in
gross contributions, outpacing the increase of 14.9% in claims
incurred. This is a noteworthy improvement in the financial
performance of the medical aid fund industry.
The medical aid fund industry recorded a surplus of N$109.1
million in 2013 (2012: N$60.6 million surplus) due to
significant investment gains and other income. Investment
gains and other income increased by 45.6% from N$86 million
in 2012 to N$125 million in 2013. The increase in other
income and investment gains was attributable to the growth
in the investment portfolio of the industry. The majority of
the medical aid fund industry’s investments (33.7% of total
investments) are in unit trust investments. The underlying
securities, in which the unit trust investment companies
invested in, performed well in the respective markets, during
the year under review. This also contributed to the increase in
investment gains of the industry.
Medical aid funds spent 14.9% more on healthcare expenditure
(claims) in 2013. This expenditure increased in nominal terms
from N$1.7 billion in 2012 to N$2 billion in 2013. The total claims
incurred during the 2013 financial year accounted for 84.7% of
gross contributions compared to 85.3% recorded in 2012.
The top three (3) claim typologies for the medical aid fund
industry remained hospitals, pharmacies and medical specialists.
The medical aid fund industry expenditure on hospitals
accounted for N$672.3 million or 34.5% of the N$2 billion that
funds paid to all medical healthcare providers in 2013. During
the 2012 financial year, the expenditure on hospitals accounted
for N$575.3 million or 36.3% of the N$1.6 billion that the
medical aid funds paid to all medical healthcare providers.
Healthcare benefits paid by the medical aid funds for medicine
dispensed by pharmacies amounted to N$322.8 million or
16.6% of total healthcare benefits paid in 2013; this represented
an annual increase of 27.0% as compared to the amount
reported during the period ended 2012.
Payments to medical specialists increased by 17.7% to N$215.3
million and made up 11% of total healthcare benefits paid in 2013.
The chart below illustrates the seasonal claims (quarterly basis)
pattern for the past five years.
600,000
2009
500,000
2010
400,000
2011
2012
300,000
2013
200,000
100,000
-
Q1
Q2
Q3
Q4
The Chart depicts that, with the exception of 2010, where
claims for quarter four were the highest, the industry trend is
that quarter two and quarter three of each year consistently
record higher claims as a result of more sicknesses
experienced during winter season.
Industry Review
Industry Review
The total number of medical aid fund beneficiaries increased
by 7.9% from 162 471 to 175 278 during the 2013 financial year.
The number of principal members grew by 7.9% as compared
to 2.7% observed in 2012. Open medical aid funds experienced
an 8.5% increase, in the number of principal members while
the closed funds principal members rose by 3.8%. In absolute
terms the total principal members for the industry increased to
73 794 in 2013 compared to 68 389 in 2012.
Claims
97
Assets and liabilities
Investments
The industry’s total assets increased by 16.7% from N$858.3
million reported as at 31 December 2012 to N$1 billion
reported as at 31 December 2013. The growth in total assets
was attributable to growth in investment assets. This growth in
investment assets was in turn attributable to the capitalisation
of investment gains.
The funds have done well in improving the collection of arrear
contributions, as is evident from accounts receivable balances
which reduced by 27.1% as at 31 December 2013 relative to
the accounts receivable balance as at 31 December 2012. This
in turn led to increased cash balances of N$147.8 million as at
31 December 2013 compared to N$94.7 million held by the
medical aid funds as at 31 December 2012.
Accounts payable balances increased by 55.1% from N$49.7
million reported as at 31 December 2012 to N$77 million
reported as at 31 December 2013, mainly due to the prepayment of the January 2014 contribution premiums by the
respective fund members. The aforementioned contribution
premiums included the 2014 annual escalation increases which
were implemented by 01 December 2013.
98
The overall industry reserve level marginally decreased from
33% reported as at 31 December 2012 to 32.8% as at 31
December 2013.
The decrease in the overall industry reserve level revealed
that some Medical Aid Funds which have solvency levels
above 25% recorded significant reductions in reserve ratios to
outweigh the increase in reserve ratios for the two Funds below
the minimum required solvency level.
These two medical aid funds with reserve levels below the
prescribed minimum required reserve level of 25.0% constitute
31.9% of the medical aid funds market share based on the
number of beneficiaries. The Registrar: Medical Aid Funds
will continue to closely monitor these two funds management
accounts on a monthly basis until such time the reserve level
is at least 25.0%.
Chart below illustrates the trend on the industry reserves
(solvency levels) for the past five years.
40.0 %
Industry reserve level
35.0 %
Prescribed minimum
required reserve level
30.0 %
25.0 %
20.0 %
15.0 %
10.0 %
5.0 %
0.0 %
2009
2010
2011
2012
2013
In terms of Regulation 9 of Government Notice no. 1496, all
medical aid funds are required to invest a minimum of 35%
of their assets inside Namibia. Overall, 55.2% of the industry’s
assets were invested inside Namibia as at 31 December 2013. All
medical aid funds in their individual capacity were compliant
with Regulation 9 as at 31 December 2013.
In line with positive market performance the medical aid fund
industry’s total assets grew by 16.7% to N$1 billion as at 31
December 2013 (2012: N$858.3 million). All medical aid funds in
their individual capacities were compliant with Regulation 9 as at
31 December 2013. Individually these funds have a bigger exposure
to the risk of not having sufficient assets to meet their liabilities.
FRIENDLY SOCIETIES
The Registrar of Friendly Societies had oversight over two
registered entities, one going through the process of liquidation
and three inactive friendly societies during the year under
review. These societies are self-administered and offer benefits
such as funeral benefits and provision of private affordable
primary healthcare to registered members.
Membership
The number of active members increased by 0.2% from 1,172
members reported as at 31 December 2012 to 1,174 members
as at 31 December 2013.
Industry Review
Industry Review
The reduction in the industry’s accounts receivable balances is
also as a result of correction of erroneous fund membership
billing, which impacted the industry’s account receivable
balances. Delays in communicating fund membership
movements to the respective fund administrators, by the
medical aid funds (especially the closed fund market segment),
resulted in the fund administrators billing members who have
already left the fund, thus increasing the accounts receivable
balances erroneously.
Incurred But Not Reported (IBNR) is a term that is commonly
used in medical aid fund claims expenditure. IBNR reflects
the total amount owed by the respective medical aid fund to
all valid claimants who have provided goods or services to
medical aid fund beneficiaries, but have not yet reported it.
Since the medical aid fund knows neither how many of these
claims (the frequency) have occurred, nor the severity of each
claim, IBNR is necessarily an estimate. The medical aid fund
industry’s IBNR provision is determined with reference to the
projected claims paid and the projected claims incurred. The
projected claims paid and the projected claims incurred were
determined by the respective fund actuaries, with reference
to the fund’s management accounts as at 31 December 2013.
The medical aid fund industry’s IBNR provision increased by
11.4%, from N$19.8 million as at 31 December 2012 to N$23.4
million as at 31 December 2013.
Financial information
The financial information of the two active friendly societies
was not available due to non-submission of annual financial
statements by these entities. The Registrar has addressed this
non-compliance issue with the two registered entities and
directed them to submit annual financial statements as per the
provision in the Act, as in the previous financial year.
99
INSURANCE
The Authority supervises long- and short-term insurance
institutions in terms of the Short-term Insurance Act No.4
of 1998 and Long-Term Insurance Act No.5 of 1998. These
institutions collectively fall under the Insurance Division.
Short-term insurance
The short-term insurance industry is regulated in terms of the
Short-term Insurance Act, 1998 (Act No.4 of 1998). This report
is submitted in terms of Section 11 of the Short-term Insurance
Act, and it covers activities for the year ended 31 December
2013 and includes unaudited financial figures of the industry.
In Namibia, only insurers/reinsurers registered in terms of
this Act may conduct short-term insurance business. During
the period under review, there was only one active registered
reinsurance company in Namibia, namely Namibia National
Reinsurance Corporation Limited (NamibRe).
Market Overview
The short-term insurance industry participants as at 31
December 2013 were as follows:
Industry Participants
31-Dec-12 Registrations Deregistrations 31-Dec-13
100
Insurers
Re-insurers
Brokers
Agents
Total
12
0
0
12
1
0
0
1
131
19
11
139
315
142
24
433
459
161
35
585
The chart below depicts the number of insurers per class of
short-term insurance business for the past two years:
All classes
Fire (only)
Marine (only)
Aviation (only)
Vehicles (only)
Guarantee (only)
Miscellaneous (only)
Personal (only)
Co-insurance (only)
Total
31-Dec-2012
31-Dec-2013
11
11
0
0
0
0
0
0
0
0
2
0
0
13
0
0
2
0
0
13
Assets and liabilities
Gross written premiums represent the domestic underwriting
business excluding insurance placed outside Namibia via
exemption as required by the Act. The industry experienced
an increase of 14% in gross written premium income over the
reporting period, which is a same increase as the previous
period. This growth is again primarily attributable to new
business and policy renewals with premium adjustment(s) at
endorsement and/or annual increases.
The total value of assets for the short-term insurance industry
was N$3.4 billion as at 31 December 2013, an increase of 15%
from the prior year. This growth in assets was mainly ascribed to
increases in balances with banks, outstanding premiums, unlisted
shares and unit trusts. The industry is encouraged to maintain
continuous monitoring of excess cash balances and consider
investing these balances in high performing liquid investment
instruments within the prescribed regulatory laws and standards.
The expense (claims, commissions and administration fees)
experience of the industry increased by 18% over the current
reporting period compared to an increase 11% for 2012. The
3% increase of expenses (11%) above the increase in gross
written premium income (14%) prompts cautious monitoring
of expenditure margins and income growth margins, taking
vigilant consideration of inflation and economic performance.
As at 31 December 2013, the total liabilities for the industry
amounted to N$ 2.6 billion, an increase of 14% when compared
to the previous year. The shareholder’s equity of N$ 906 million
accounted for 26.2% of the assets of the industry as at 31
December 2013 while no significant change was observed in
the equity and solvency ratios over the reporting period. Hence,
the industry is encouraged to take a robust stride to perform
effectively and prudently, and continue to apply caution in the
management of assets and liabilities to ensure that the solvency
ratio is at least increased to, and maintained at, around 30%,
the preferred industry ratio. The industry’s balance sheet and
solvency ratios for the past 5 years are presented in the tables
included in the chapter on Statistics. The short-term insurance
industry however remains sufficiently capitalised. The chart
right illustrates the solvency level brackets for the 13 insurers
and reinsurers of short-term insurance business.
The cession of insurance at insurers, as measured by the
cession ratio, was 30%, a decrease of 1% when compared to the
ratio reported in 2012. The reinsurance expense increased by
11%, which can be attributable to the increase in applications
for dispensation of reinsurance business by the industry
as required by section 3(1)(c)(i) of the Act. The rest of the
performance ratios remained more or less the same when
compared to the prior year. The industry’s income, expenses
and performance ratios for the past 5 years are included in the
chapter for Statistics.
Solvency level as at 31 Decemeber 2013
1% - 20%
20% - 25%
25% - 30%
30% - 35%
35% - 40%
(> 40%)
Total Insurers and Reinsurer
2013
2012
3
2
0
2
2
0
1
2
3
1
4
6
13
13
Industry Review
Industry Review
Market structure and size
Income and expenses
Typology and quantum of claims
Vehicle, personal, fire and miscellaneous insurance continue
to contribute to over 95% of earned premiums, with vehicle
insurance alone contributing 33%. Alarmingly high loss and
expense to earned premium ratios to the marine, aviation,
vehicle, personal and co-insurance class of insurance business
has also been noticed. In terms of profitability, an underwriting
surplus continues to be recorded in all classes of insurance
business. However, significant reductions in the underwriting
surplus of 15%, 17% and 484% for fire, miscellaneous and
aviation insurance classes of business respectively, was
experienced for 2013.
101
Foreign insurance
In terms of Sections 2(2), 3(1)(c) and 65 of the Short-term
Insurance Act, the Authority has the power to grant foreign
insurers or reinsurers to issue insurance of reinsurance policies
in Namibia for those risks that local insurers lack capacity
to cover. The table below provides an overview of insurance
covered by foreign insurers over the past five years. These
figures include the business of Lloyd’s which is an approved
insurer in terms of the Act.
Insurance business placed in the foreign market has decreased
by 19.3% from 2012 to 2013. This is indicative of the increased
willingness or capacity by the Namibian insurance industry to
accept a higher proportion of risks within the local market. The
Authority encourages the industry to maintain insurance business
locally as far as possible after careful consideration of the risks.
Lloyd’s and Non-Lloyd’s Foreign Exemptions (N$ 000)
Aviation
Fire
Marine
Miscellaneous
Vehicles
Guarantee
Total
Growth
2009
2010
2011
2012
2013
52 720
22 560
41 050
28 010
12 074
11 960
7 400
22 410
23 980
32 453
63 910
50 820
74 490
92 870
92 740
48 460
46 110
40 800
71 830
37 625
-
35 000
1
8
31
-
-
490
-
-
177 050
161 890
179 250
216 770
174 924
-25%
-9%
11%
21%
-19.3%
Long-term insurance
Financial Overview
The long-term insurance industry is regulated in terms of the
Long-term Insurance Act, 1998 (Act No.5 of 1998) (the LTI
Act). This report is submitted in terms of Section 11 of the
Long-term Insurance Act, covers activities for the year ended
31 December 2013 and includes unaudited financial figures
of the industry. In Namibia, only insurers and reinsurers
registered in terms of the LTI Act may conduct long-term
insurance or reinsurance business.
Income and expenses
Assets and liabilities
The long-term insurance industry reported a growth in
gross premium income of 9.96% for the year. This increase is
primarily due to the increase in new business as well as the
annual increase in premium rates. Investment income on
financial assets amounted to N$4.3 billion, growing by 14%
from the previous year.
Total assets of the long-term insurance industry increased to
N$36.4 billion as at 31 December 2013 from N$31.6 billion as
at 31 December 2012. The increase in assets is primarily due
to increases in balances with banks, mortgage bonds, unlisted
shares, foreign assets (in the CMA) and other assets. The
industry is encouraged to continuously monitor and utilise
excess cash balances by investing in high performing liquid
investment instruments within the prescribed regulatory laws
and standards.
Market Overview
Market structure and size
The industry participants as at 31 December 2013 reconciled
from 31 December 2012:
Industry Participants
102
Insurers
Re-insurers
Brokers
Agents
Total
16
0
0
16
1
0
0
1
118
20
6
132
3702
124
1693
2133
3827
144
1699
2282
Namibia National Reinsurance Corporation Limited
(NamibRe) is the only registered long-term reinsurer, however
the licence is currently dormant as their focus has been on
short-term reinsurance business. Going forward, this matter
shall be explored.
The number of insurers per class of long-term insurance
business for the past two years is provided in the table below:
All classes
Funeral (only)
Disability (only)
Fund (only)
Credit Life (only)
Total
31-Dec-12
31-Dec-13
13
13
2
2
0
0
1
1
0
16
0
16
The industry’s premium retention ratio (reinsurance expense as
a percentage of gross premium income received) is 98%. This is
due to the fact that most of the big insurance companies make
use of parent companies’ or group reinsurance programs. In
these cases, the industry does not incur premium outflows; but
retain most of the premiums received. The industry’s income
and expenses for the past 5 years are presented in the chapter
for statistics.
Total policyholder liabilities of the industry amounted to
N$30.9 billion as at 31 December 2013, an increase of 14%
from 2012.
The capital adequacy requirement (CAR) is the prescribed
measure for the statutory solvency (i.e. statutory capital) of
insurers therefore insurers often hold excess assets or capital
over CAR as a buffer for a worse-than-expected experience.
Capital over CAR is a measure of the financial soundness of
insurers and the insurance industry. A coverage ratio of surplus
assets/CAR equal to 1 times is acceptable for the industry,
although a cover of 1.5 times is preferred. The industry coverage
ratio was 5.7 times for 2013, up from 4.8 times in 2012. The
long-term insurance industry remains well-capitalised. The
industry’s balance sheets for the past 5 years are presented in
the table under the chapter on statistics. The table below shows
the ratios to which inadmissible assets (surplus assets) relate to
CAR levels for the industry over the past five years.
Cover 1 times
Cover 1 – 2 times
Cover 2 – 5 times
Cover 5 – 10 times
Cover 10+ times
Total insurers
31-Dec-2012
31-Dec-2013
5
2
0
0
6
7
3
4
2
16
3
16
Industry Review
Industry Review
31-Dec-12 Registrations Deregistrations 31-Dec-13
The industry paid total benefits of N$4.5 billion for the year
ended 31 December 2013, increasing by 13.3% from N$ 3.9
billion reported for the year ended 31 December 2012. To
the exception of retirement benefits and surrenders under
the benefits paid, all other benefits paid in comparison to the
previous year, explaining the overall increase in total benefits
paid. Group member withdrawals more than doubled from the
previous year. The expenses incurred by the industry increased
by 25% from the previous year resulting in an increase in the
expense ratio which is expenses expressed as a percentage gross
premium income to 21.7%. The industry is therefore required
to closely monitor these ratios and trends to ensure sustainable
future profits.
103
Statistics
Statistics
104
STATISTICS
105
Long-term insurance
Long-term insurance
Income and expenses - (N$ 000)
Balance sheet - (N$ 000)
2009 2010
2011 20122013
Premium Income
Single premiums RA
557,168 523,635 544,563 712,343 977,029
1,636,637 1,418,129 1,571,021 1,884,923 1,680,090
227,499 111,071 252,318 217,899 243,366
Single premiums (Main products)
Recurring RAs
3,368,565 3,653,333 5,727,477
3,233,066 3,476,853 3,717,377
221,886 229,832 257,411 302,640 339,551
1,329 266,630 156 1,163
2,585,376 2,994,539 3,487,715
Policy loans
5,809,704 6,388,200
Mortgage bonds
Claims/Debtors
Total income
Debentures
4,337,370
152,522 165,678 103,267 284,235 549,845
6,789,996 7,027,710 6,466,414 9,897,923 Shares: Listed
Shares: Unlisted
11,275,415
74,544 63,415 146,450 195,871 6,052
727,851 717,760 1,004,863 1,160,791 1,160,819
3,902,261 7,869,672 3,944,288 4,685,570 4,968,265
134,994 603,741 1,049,228 1,924,060 2,619,994
428,755 496,208 531,730 543,237 384,676
7,617,545 3,803,814 10,428,988 11,798,195 13,484,239
Benefits
Foreign assets-Offshore
2,036,262 1,376,969 2,378,707 3,520,816 3,408,184
Death
565,379
Other assets
211,400 3,176 2,545 218,886
Total Assets
22,488,934 25,368,967 26,735,930 31,653,824 36,423,756
343,410 384,829 542,614 544,473 Disability and health
126,263 129,962 136,854 165,072 177,440
Maturity claims
593,412 715,520 1,250,353 1,120,688 1,343,145
Fixed assets
- Foreign assets-CMA
Liabilities and reserves
- 19,716,143 21,696,289 22,999,539 27,127,614 30,937,929
893,392 924,998 1,158,579
484,957 628,724 648,783
330,894 383,725 433,761 488,709 556,192
107,172 162,578 171,630 184,514 5,035
1,430,848 1,033,590 364,920 402,196 872,112
Long Term liabilities
584,144 625,296 806,203 810,699 690,047 1,031,438 934,827
CAR
406,117 421,059 3,738,202 3,620,903 3,590,179 3,937,090 4,454,130
Group member withdrawals
Total
Expenses
Sales remuneration
218,494 299,639 330,783 370,905 440,871
Admin and marketing
462,907 555,540 601,443 640,877 778,425
Asset management fees
32,461 40,401 54,634 42,986 68,174
Re-insurance
50,049 38,516 61,970 56,600 101,293
9,655 4,007 (286)
1,164
943,751 1,052,837 1,111,082 1,389,927
Total
- 763,911 Excess Assets
Other expenses
Policy liabilities
1,782,530 2,626,323 2,358,042 2,972,488 3,678,465
Statistics
Annuity benefits
Retirement benefits
Surrenders
Statistics
4,835,136 4,953,278 3,803,984 387,073
4,431,243 2,409,030 1,409,869 389,757 4,114,154 4,461,865 2,400,167 389,458 2,919,084 2,009,099 2,207,071 463,147 Balances with banks
4,430,403 310,269 2011 20122013
Gilts/Bonds
Recurring (Main Products)
Other income and fees
2009 2010
Assets
Cash Total
Investment income and capital gains
106
107
Short-term insurance
Short-term insurance
Income and expenses - (N$ 000)
Experience per class of business
Gross premiums written Net reinsurance expense
Net premiums written 2009 2010
2011 20122013
1,755,920
2,028,562
2,138,593
2,444,369
2,788,152
426,795
537,281
972,235
748,665
833,078
1,329,124
1,491,281
1,166,358
1,695,704
1,955,074
Premiums earned 1,352,864
1,503,262
1,936,713
2010
Premium earned by class (% of total)
Fire
18%
18%
2011 20122013
18% 21%21%
Marine
2%
2%
2%
1%1%
Aviation
0%
0%
0%
0%0%
Vehicles
Guarantee
36%
4%
37%
4%
35% 34%33%
2%
2%1%
Claims incurred 888,620
941,431
959,265
1,027,977
1,204,758
Miscellaneous
19%
20%
21% 18%20%
153,563
164,616
169,675
182,582
251,844
Personal
21%
20%
23% 24%24%
Expenses incurred 141,336
182,324
186,201
246,495
282,341
Co-Insurance
Administration fees 41,080
56,763
55,645
67,310
58,116
128,265
Capital gains
158,129
Investment income 177,854
120,331
146,269
138,690
139,654
Fire
Marine
136,775
Aviation
0
27,611
8,829
41,934
76,040
Other income/(expenses)
-18,960
-4,292
-37,224
-20,996
-13,483
Reserve decrease/(increase)
-14,504
-10,305
-14,103
-14,340
-19,709
Profit before tax 201,551
291,474
281,625
323,151
0%
0%
0%
0%0%
Loss ratio by class
177,863
106,751
319,277
42%
42%
44% 44%55%
25%
55%
59% 76%74%
33%
33% -2147%
-21%375%
Vehicle
72%
66%
65% 67%64%
Guarantee
77%
74%
66% 42%30%
Miscellaneous
62%
65%
61% 50%60%
Personal
82%
73%
72% 73%68%
0%
0%
-98% 118%143%
Co-Insurance
Expense ratio by class
Fire
33%
36%
30% 32%35%
Marine
14%
19%
18% 20%22%
Aviation
16%
-4% -118%
-6%82%
Vehicles
22%
23%
24% 26%27%
Guarantee
16%
20%
32% 51%63%
Miscellaneous
25%
27%
26% 33%40%
Personal
23%
24%
25% 25%24%
0%
52%
0% 739%-1%
Co-Insurance
Underwriting results (% of premiums earned)
Fire
25% 22%
Marine
61% 26%
Aviation
51%
71%
Vehicles
5% 11%
Guarantee
8%
6%
Miscellaneous
13%
8%
Personal
-5%
3%
Co-Insurance
0%
48%
25% 24%9%
22% 4%4%
2365%
127%-357%
11% 7%9%
2%
7%7%
14% 17%0%
3%
Statistics
Statistics
1,702,227
2009
Commissions Underwriting surplus 108
1,548,639
2%9%
198% -757%-42%
109
Short-term insurance
Medical aid funds
Balance Sheet - (N$ 000)
Membership
2009 2010
2011 20122013
Principal members
63,647 64,399 66,579 68,389 73,794
Cash
Dependants
81,783 84,611 88,777 90,622 96,769
33,084
33,397
33,619 82,64997,800
Balances with banks
662,624
930,030
975,376
1,220,705
1,335,926
Bonds, securities, bills
110,420
147,021
140,752
228,499
256,517
Outstanding premiums
170,448
79,382
131,466
99,591
209,771
0
0
16,048
1,975
4,325
53,676
69,533
85,693
71,685
63,239
Mortgage bonds
Debentures
0
0
0 00
Debtors
132,093
262,716
147,769 282,476306,824
Shares - Listed
209,705
109,673
104,566
162,807
121,529
86,897
89,303
179,025
171,106
279,419
157,126
235,713
424,686
309,073
429,118
Shares - Unlisted
Units in unit trusts
Land & buildings
15,095
17,293
17,565
3,462
1,126
Fixed assets
12,047
41,338
15,168
15,790
25,439
Other assets
305,692
342,019
351,899
352,141
330,447
1,948,908
2,357,418
2,623,631
3,001,959
3,461,480
Total Assets LIABILITIES
Unearned premium provision
530,188
658,817
758,246
824,565
965,968
Outstanding claims
135,764
165,847
173,676
199,034
206,092
77,553
86,743
82,743
125,380
117,833
Contingency reserve
105,904
120,387
140,042
163,298
176,334
Unexpired risk provision
148,049
190,553
240,806
272,284
291,510
27,092
24,096
17,081
38,762
66,515
3,814
0
0
0
7
1
0
0
0
0
IBNR
Due to insurers & reinsurers
Reinsurance deposits
Bank overdrafts
Provision for taxation
-3,787
-647
26,123
13,022
5,202
Provision for deferred tax
18,582
23,680
25,707
25,650
27,581
Contingent liability
Other Current liabilities
Total Liabilities 0
0
42
42
133
120,995
146,931
183,109
300,986
350,450
168,707
157,865
168,920
270,996
348,146
1,332,862
1,574,272
1,816,496
2,234,019
2,555,771
Equity 616,045
Solvency Ratio
783,146
807,135
767,940
31.6%
905,709
33.2%
30.8%
25.6%
26.2%
3,360 3,318 3,394 3,460 4,715
Total members
Pensioners
148,790 152,328 158,750 162,471 175,278
Income and expenses - (N$ 000)
2009 2010
Contributions received
Savings Plan contributions
Reinsurance
Net contributions
Claims
1,395,658 1,576,928 2011 20122013
1,757,893 2,002,120 2,315,575
4,316 87,206 69,443 76,393 83,552
28,532 29,273 24,108 12,009 20,245
1,362,810 1,460,449 1,664,342 1,913,718 2,211,778
1,175,708 1,215,848 1,440,207 1,707,675 1,962,359
Administration costs
106,100 121,370 135,537 161,447 187,831
Operational expenses
25,312 29,379 34,013 33,814 38,016
Managed Care: Management services
18,997 20,888 21,892 31,122 35,619
3,742 5,038 4,033
Consultant fees/professional fees
Underwriting surplus
- - 36,693 72,964 28,951 -25,378 -16,080
Other income
20,385 6,000 2,365 13,664 29,684
Investment income
25,274 47,281 45,326 72,325 95,526
82,352 126,245 76,642 60,611 Net Surplus
109,130
Statistics
Statistics
2011 20122013
ASSETS
Reinsurance deposits
110
2009 2010
111
Medical aid funds
Medical aid funds
Claims typology and quantum
Investments
2009 2010
236,445 341,076 386,240 403,576 530,555
2,000 46,856 78,653 78,334 74,023
2009 2010
2011 20122013
Hospitals
322,381 441,531 568,224 575,315 672,287
Investments in Namibia
General practitioners
160,593 157,668 211,576 177,910 188,903
Government & other stock/bonds
Pharmacies/Medicine
189,746 184,183 254,449 254,091 322,767
Equities/shares
97,631 116,404 185,855 182,994 215,326
Unit trust schemes
Specialists
Auxiliary services
52,649 49,634 73,141 71,431 89,293
Fixed deposits and savings accounts
Pathologists
49,967 52,589 64,337 71,371 79,853
Cash & equivalents (call accounts)
Optometrists
39,755 31,533 61,750 45,183 65,149
Treasury bills
Dentists
52,606 53,479 72,415 71,165 87,439
Loans stock investment
Radiologists
38,204 44,274 55,516 62,831 70,418
Dental specialists
12,243 10,273 11,619 10,481 9,976
Investments outside Namibia
Dental therapists
431 471 850 1,060 1,682
Cash outside Namibia
Psychiatric institutions
636 1,246 2,121 2,605 3,135
Unit trusts schemes
Optic payouts
17,902 9,958 1,680 5,150 2,425
Other 23,086 35,983 3,126 52,354 140,117
1,057,830 1,189,226 1,566,659 1,583,941 1,948,770
Total
Statistics
Property, plant & equipment
Investments
Current assets
112
Accounts receivable
Cash & cash equivalents
Total Assets
FUNDS AND LIABILITIES
2009 2010
2011 20122013
113,192
147,648
6,000 - 130,306 - - - - 270,472 308,868 4,481 - 368,848 5,024
421,146
18,625 15,741 1,839 7,471 3,933
111,681 254,731 117,430 168,540 192,105
Bonds
- - 35,535 23,877 17,352
- - 154,064 168,960 207,756
695,108 772,424 951,701
366,751 611,548 Percentage of Namibian assets to total assets 64.47%
55.77%
55.57%
52.25%
55.75%
% Outside Namibia
35.53%
44.23%
44.43%
47.75%
44.25%
% Unit trusts
38.13%
48.94%
25.73%
33.32%
33.66%
% Cash 17.25%
15.93%
24.87%
28.24%
28.39%
% Fixed deposits
8.89%
12.40%
8.47%
7.38%
11.89%
807,661
% Bonds
0.55%
7.66%
16.43%
13.23%
9.60%
% Treasury bills
1.64%
0.00%
0.00%
0.58%
0.00%
142,335 182,598
Loans Stock Investment
0.00%
0.00%
0.00%
0.00%
0.53%
30,146 47,676 34,768
118,406 151,590 94,659 147,830
523,187 673,922 768,009 858,273 370,703 517,718 586,272 715,938 819,397
4,117 4,076 8,707 11,747 11,736
366,586 513,642 577,565 704,191 152,483 156,203 181,736 32,598 37,797 119,885 1,001,995
660,968 759,829
Accumulated funds
380,793 514,183 615,940 660,968 759,829
7,976 4,968 - - 134,416 154,771 152,069 197,305 242,166
Accounts payable (creditors)
26,760 27,089 71,720 49,671 77,032
Provision for outstanding claims/IBNR
98,829 120,844 65,412 125,234 139,508
8,827 6,838 14,840 19,801 23,372
97 2,599 2,254
56,985 125,779 24.50%
615,940 Total Funds and Liabilities
58,866 168,485 2.93%
Savings plan liability(other liabilities)
75,806 155,948 28.07%
519,151 Provision for bad debt
32,600 157,796 2.70%
62,442
128,226
48.10%
388,769 Current liabilities
49,140 88,857 % Equities/shares
Members’ funds
Revaluation reserve - investments
18,781 61,455 - - 523,187 673,922 768,009 858,273 1,001,995
Statistics
Non-current assets
17,894 44,572 Balance Sheet - (N$ 000)
ASSETS
9,902 28,147 Equities/Shares
Total investment Assets
2011 20122013
113
Retirement funds
Unit trusts
Income and expenses - (N$ million)
Total Funds Under Management - (N$ million)
2009 2010
2009 2010
Build-up of Funds
Contributions received
2,496 2,942 3,109 3,874 4,414
Net investment income
7,033 4,561 4,857 11,143 13,288
782 845 582 866 2,298
Capital appreciation
Country allocation
Insurance proceeds
67 68 81 92 93
Other income
43 38 39 37 11
Total Income
10,421 8,454 8,668 16,012 20,104
11,542
11,838
Offshore
Total
131 147 161 262
Treasury bills
140 139 140 215
Negotiable certificates of deposit
Insurance premiums
181 206 223
98 103 98 45
Total expenses
492 546 570 605 745
9,929 7,908 8,098 15,407 Net income before transfers and benefits
19,359
Banker’s acceptances
Debentures
5,323 5,768 12,527 0
0
0
0
0
0 00
0
141
9,179
2,981
3,658
12
208
213
187
1,704
135
0
161
231
574
Unlisted property
10,470
5,563
4,855
5,594
0
0
0
0
0
139
586
269
447
757
Total Funds Under Management
24,859
25,991
27,526
32,106
37,267
Source of Funds - (N$ million)
2009 2010
Other assets
15,762
2,496 2,942 3,109 3,874 4,414
Net Income
7,033 4,561 4,857 11,143 13,288
Statistics
1,454
9,310
3,602
Unlisted equity
7,842 1,797
9,806
1,503
Unlisted debt
2,034
7,851
2,228
- 288
Net transfers and benefits paid
325
7,091
1,621
3,885
3,597
267
8,479
1,394
- 377 21,395
1,200
3,257 2,880 24,658
1,503
-374 23,152
Listed equity
2,704 2,330 22,182
Listed debt
- 135 21,870
7,704 8,2005,037
2,720 2,585 27,526 32,10637,267
9,278
-1 16,559
3,705 4,296
2,088 2,087 25,991
14,301
565 1,0341,966
Notice, call and other deposits
Benefits paid
24,859
346
Other
Net transfers
Net transfers and benefits paid
12,882
217
Asset allocation
110 177 Common monetary area
150 64 15,123 16,77118,742
Administration expenses
168 13,100 12,763
Money market investments:
Other expenses
2011 20122013
Namibia
Investment fees
Statistics
2011 20122013
2011 20122013
Balance Sheet - (N$ million)
114
Pension funds
Non-current assets
Current assets
Total assets
Funds and reserves
Current liabilities
Total funds, reserves and liabilities
2009 2010
2011 20122013
53,681 62,960 68,306 84,434 103,997
2,189 943 1,172 1,323 1,270
55,870 63,903 69,478 85,757 53,175 62,696 68,365 84,659 103,886
2,695 1,207 1,113 1,098 1,381
55,870 63,903 69,478 85,757 105,267
1,255
1,281
1,230
1,511
2,388
Short-term insurance companies
16
67
146
198
182
Long-term insurance companies
599
687
723
1,101
1,259
35
35
9
46
49
Unit trust schemes
4,231
2,743
2,819
4,129
4,517
Companies
5,383 6,639
Medical aid funds
Natural persons
Other
105,267
Total
12,733
607
24,859
13,708
831
25,991
5,418 5,4138,292
16,044
17,817
19,096
1,137 1,8911,484
27,526
32,106
37,267
115
Investment management
Capital markets
Total Funds Under Management - (N$ million)
Market Performance
2009 2010
Country allocation
2011 20122013
Namibia
39,214 45,509 46,386 55,086 Common monetary area
39,274 32,148 35,061 41,707 48,467
JSE All Share Index (points)
5,260 8,397 10,218 12,317 16,284
Overall value of equity securities traded (N$ m)
83,748 86,055 91,665 109,110 123,322
Offshore
Total
58,571
Asset allocation
Money market investments
30,356 30,331 34,006 35,280
Treasury bills
8,229 9,966 12,269 13,817 15,180
6,700 5,244 3,702 4,522 4,396
20122013
NSX overall index (points)
772 867 838 984 997
155 173 221 274 332
27,666 32,119 32,003 39,250 46,256
8,728 7,580 3,272 4,018 5,513
Local value of equity securities traded (N$ m)
Total shares in issue (m) NSX local index
Negotiable certificates of deposit
Overall market capitalisation (N$ m)
Local market capitalisation (N$ m)
184 134 103 508 352
24,862 25,985 23,361 26,357 27,228
1,644 1,644 1,651 998 1,515
1,047,527 1,178,257 1,148,879 1,357,247 1,407,654
7,126 7,782 9,304 11,057 18,729
343 216 99 111 116
Overall volume of securities traded (m)
Banker’s acceptances
- - - - -
Local volume of securities traded (m)
18 31 11 40 29
Debentures
1
- 4
- -
NSX overall index (points)
772 867 838 984 997
NSX local index (points)
155 173 221 274 332
Notice, call and other deposits
Other
11,424 11,348 11,495 11,519 11,096
2,441 3,798 2,861 4,148 4,608
Listed equity
38,874 36,650 42,553 53,101 58,027
Listed debt
11,569 11,125 13,363 15,540 17,552
Unlisted equity
569 636 905 1,168 1,152
Unlisted debt
394 49 171 241 255
Unlisted property
Other assets
Total Funds Under Management
323 322 372 376 650
3,223 6,918 3,970 4,678 10,406
83,748 86,055 91,665 109,110 123,322
Nominal Debt Issued - (N$ 000)
Central government
6,616 5,988 12,147 14,065 15,741
1,523 1,427 1,427 1,427 1,427
Banking institutions
1,126 1,186 1,070 1,633 1,909
Total
Retirement funds
2009 2010
2011 20122013
49,220 47,574 50,977 62,400 71,551
Short-term insurance companies
566 686 783 770 373
Long-term insurance companies
11,712 12,822 13,757 16,133 18,796
193 288 321 320 320
19,522 22,333 22,878 26,183 28,409
Companies
387 406 532 524 808
Natural persons
596 5
9
25 46
Other
1,552 1,941 2,408 2,754 3,019
Total
83,748 86,055 91,665 109,110 123,322
Medical aid funds
Unit trust schemes
2011 20122013
State-owned enterprises
Corporate
Source of Funds - (N$ million)
2009 2010
- 9,265 - 8,601 Debt Securities Traded - (N$ 000)
2009 2010
Central government
State-owned enterprises
Banking institutions
Corporate
Total
- 14,644 - 17,125 19,077
2011 20122013
1,262 349 240 482 237
20 86 15 13 -
129 106 - 1,411 - 541 - - -
- -
495 237
255 Statistics
Statistics
28,795 2011
NSX local index (points)
Total shares in issue (m) NSX overall index
116
2009 2010
117
Microlending
Complaints
Credit extension
Number of received complaints by industry
2009 2010
2009 2010
2011 20122013
Loans outstanding (N$000)
2011 20122013
Micro-lending and credit agreements
140
239
169
204
167
Total loans
938,480
1,118,003
1,051,208
1,752,556
2,616,092
Long-term insurance
157
134
105
100
95
Term lenders 890,489
1,059,095
1,439,594
1,685,290
2,538,299
Short-term insurance
80
64
51
69
43
Payday lenders
47,991
58,908
61,614
67,266
77,793
Retirement funds
83
74
53
37
56
Collective investment schemes
Loans disbursed (N$000)
Capital markets
1
0
0
0
0
10
7
5
1
2
Total loans
907,652
1,094,327
1,483,754
1,586,460
2,261,550
Medical aid funds
6
3
3
5
3
Term lenders 505,344
606,992
956,645
1,079,030
1,640,765
Friendly societies
2
0
0
1
0
Payday lenders
402,308
487,335
527,109
507,430
620,785
Others
Total
8
487
8 11 00
529
397 408366
Number of loans
Total loans
Term lenders
Payday lenders
579,419
638,132
656,061
613,307
698,460
62,116
79,265
96,397
97,486
114,796
517,303
558,867
559,664
515,821
583,664
Average loan amount
Term lenders (N$)
7,658
9,924
11,074
14,293
778
872
945
983
1,064
Microlending and credit agreements
106
238
163
204
166
Long-term insurance
113
125
101
99
91
Short-term insurance
62
57
50
69
40
Retirement funds
58
64
51
35
51
Collective investment schemes
1
0
0
0
0
Capital markets
9
7
4
1
2
Medical aid funds
5
3
3
5
3
Friendly societies
1
0
0
1
0
Others
7
7 11 00
Total
118
2011 20122013
362 501
Statistics
Statistics
Payday lenders (N$)
8,135
Number of resolved complaints by industry
2009 2010
383 405353
119
FINANCIAL
STATEMENTS
120
CONTENTS
Board’s responsibility for financial reporting
122
Board’s approval of the annual financial statements
122
Independent auditor’s report
123
Report of the Board
124
Statement of comprehensive income
125
Statement of financial position
126
Statement of changes in reserves
127
Statement of cash flows
128
Notes to the annual financial statements
129-153
Financial Statements
Financial Statements
FOR THE YEAR ENDED
31 MARCH 2014
121
The table below contain some
statistics on penalties imposed
on regulated entities per
industry during the financial
year 2013/14:
Type of Institution
Amount (N$)
Long-term Insurance
Companies (Intermediaries)
896,000 (0)
Short-term Insurance
Companies (Intermediaries)
134,000
(225,000)
Medical Aid Funds - active
-
Pension Funds - active
1,543,520
Collective Investment
Schemes
-
Investment Management
-
Microlenders
-
Stock Exchanges
-
Stock Brokers
(exclude sponsors of SB)
-
Friendly Societies
-
Total
2,573,520
(225,000)
INDEPENDENT AUDITOR’S REPORT TO THE BOARD OF THE
NAMIBIA FINANCIAL INSTITUTIONS SUPERVISORY AUTHORITY
We have audited the annual financial statements of the Namibia Financial Institutions Supervisory Authority (NAMFISA), which
comprise of the statement of financial position as at 31 March 2014, and the statement of comprehensive income, statement of
changes in reserves and the statement of cash flows for the year then ended, report of the Board and a summary of significant
accounting policies and other explanatory notes as set out on pages 124-153.
Board’s Responsibility for the Financial Statements
122
BOARD’S RESPONSIBILITY FOR FINANCIAL REPORTING
Auditor’s Responsibility
The Board of the Authority is responsible for the maintenance of adequate accounting records and the preparation and integrity
of the financial statements and related information. The financial statements have been prepared in accordance with International
Financial Reporting Standards. The Authority’s independent external auditors have audited the financial statements and their
report appears on page 123.
Our responsibility is to express an opinion on these financial statements based on our audit. We conducted our audit in accordance
with International Standards on Auditing. Those standards require that we comply with ethical requirements and plan and
perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement.
The Board is also responsible for the systems of internal control. These are designed to provide reasonable but not absolute
assurance as to the reliability of the financial statements, and to adequately safeguard, verify and maintain accountability of
assets, and to prevent and detect material misstatement and loss. The systems are implemented and monitored by experienced
personnel with an appropriate segregation of authority and duties. Nothing has come to the attention of the Board to indicate that
any material breakdown in the functioning of these controls, procedures and systems has occurred during the year under review.
An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial statements.
The procedures selected depend on the auditor’s judgement, including the assessment of the risks of material misstatement of
the financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal control
relevant to the entity’s preparation and fair presentation of the financial statements in order to design audit procedures that are
appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the entity’s internal
control. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of accounting
estimates made by management, as well as evaluating the overall presentation of the financial statements.
The annual financial statements are prepared on a going concern basis. Nothing has come to the attention of the Board to indicate
that the Authority will not remain a going concern for the foreseeable future.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion.
BOARD’S APPROVAL OF THE ANNUAL FINANCIAL STATEMENTS
Opinion
The annual financial statements set out on pages 3 to 31 were approved by the Board and are signed on its behalf by:
In our opinion, the financial statements present fairly, in all material respects, the financial position of the Namibia Financial
Institutions Supervisory Authority as at 31 March 2014, and its financial performance and its cash flows for the year then ended in
accordance with International Financial Reporting Standards and in the manner required by the Namibia Financial Institutions
Supervisory Authority Act (No. 3 of 2001).
Estelle Tjipuka
Chairperson
Gersom Katjimune
Board member
Deloitte & Touche
Registered Accountants and Auditors
Chartered Accountants (Namibia)
Date
Date
Per: AA Akayombokwa
Partner
Windhoek
24 June 2014
Financial Statements
Financial Statements
The Board members are responsible for the preparation and fair presentation of these financial statements in accordance with
International Financial Reporting Standards and in the manner required by the Namibia Financial Institutions Supervisory
Authority Act (No. 3 of 2001), and for such internal control as the Board members determine is necessary to enable the preparation
of financial statements that are free from material misstatement, whether due to fraud or error.
123
for the year ended 31 March 2014
REPORT OF THE BOARD
The Board of the Authority has pleasure in presenting their report on the activities of the Namibia Financial Institutions
Supervisory Authority (NAMFISA) for the year ended 31 March 2014.
Notes GENERAL REVIEW
Revenue Investment income Other income NAMFISA was established by the Government of the Republic of Namibia on 14 May 2001 in terms of the Namibia Financial
Institutions Supervisory Authority Act No. 3 of 2001.
2013
N$
2
102 582 844 84 147 390
3
10 844 042 10 082 639
4
3 373 301 1 602 858
116 800 187 95 832 887
NAMFISA was established to exercise supervision over the businesses of financial institutions and over financial services, and to
advise the Minister of Finance on matters related to financial institutions and financial services.
Consumer education costs (651 952) (1 524 533)
RESULTS
Finance charges The financial results of NAMFISA are set out in the attached annual financial statements on pages 125-153.
Depreciation and amortisation expense 7,8 (1 824 220) (1 234 752)
15.2 (1 021 000) (679 000)
Inspection and enforcement costs (908 817) (485 455)
Legal costs (721 899)
(622 356)
6
(9 765 411) (6 609 047)
Professional and consulting fees (6 120 529) (2 557 433)
Office rental expenses Staff costs The following persons served as directors during the period:
Board members Date of Term Ended Appointment Rick Kukuri Titus Ipumbu
Heinrich Nashenda
Chairperson (outgoing)
Vice-Chairperson (outgoing)
Member
1 November 2010
1 November 2010
1 November 2010
31 October 2013
31 October 2013
31 October 2013
Estelle Tjipuka
Malverene Theron
Chairperson (incoming)
Member
1 November 2010
1 November 2010
31 October 2013
31 October 2013
Gersom Katjimune
Bonifatius Konjore
Simeon Amunkete
Vice-Chairperson (incoming)
Member
Member
1 November 2013
1 November 2013
1 November 2013
Date of
Re- appointment
6
(60 327 607) (48 965 732)
Other operating costs (12 826 799) (10 637 595)
Total Expenses (94 168 234) (73 315 903)
INCOME FOR THE YEAR 22 631 953 22 516 984
Other comprehensive income:
1 November 2013
1 November 2013
During the year, the function of secretary to the Board of NAMFISA was performed by Cletius Simasiku whose business and
postal addresses are set out below:
Business address: Postal address:
8th floor, Sanlam Centre PO Box 21250
Independence Avenue Windhoek
Windhoek, NamibiaNamibia
FINANCIAL YEAR END
The financial year end of NAMFISA is defined in the Act as 28 March of every year. The Board is of the view that the intention
of the legislature was that the year end be 31 March and therefore, the financial statements have been prepared as of 31 March.
OTHER MATTERS
As is public record, NAMFISA is a co-defendant in a case brought against the Authority by Alwyn Petrus van Straten N.O. and others on
12 March 2012 claiming a total amount of N$105 million. NAMFISA filed Exceptions to the Particulars of Claim prior to 31 March 2013.
The Exceptions were heard on 8 October 2013 and were upheld in terms of the judgement and order of 31 January 2014. The Plaintiffs
filed an Appeal against the judgement and order. At the date of issue of the financial statements the Appeal was still pending and although
it has technically lapsed, the Plaintiffs may still apply for condonation and reinstatement. The High Court must still formally dismiss the
claim should the Plaintiffs not proceed with the appeal. NAMFISA intends to continue contesting the claim and to apply for its dismissal.
SUBSEQUENT EVENTS
The Board of the Authority is not aware of any fact or circumstance, which occurred between end of the financial year and the
date of this report, which might influence an assessment of the Authority’s affairs.
Actuarial gain / (loss) – Post-retirement medical aid 15.2 1 605 000 (949 000)
Actuarial gain / (loss) – Severance 15.2 93 000 (98 000)
TOTAL COMPREHENSIVE INCOME FOR THE YEAR
24 329 953 21 469 984
Financial Statements
Financial Statements
2014 N$ Total Income DIRECTORS AND SECRETARY
124
for the year ended 31 March 2014
STATEMENT OF COMPREHENSIVE INCOME
125
for the year ended 31 March 2014
STATEMENT OF FINANCIAL POSITION
Notes
ASSETS 2014 N$ 2013
N$
4 022 290 3 417 003
Non-current assets
STATEMENT OF CHANGES IN RESERVES
for the year ended 31 March 2014
Accumulated income
N$
Balance at 1 April 2012 174 176 525
Equipment 7
Intangible assets 8
3 809 673 4 340 104
Total comprehensive income for the year
21 469 984
Other financial assets 9
88 766 403 77 364 843
Balance at 31 March 2013
195 646 509
Total non-current assets 96 598 366 85 121 950
Total comprehensive income for the year
24 329 953
Balance at 31 March 2014 219 976 462
Current assets
Accounts receivable Other financial assets 10 34 209 424 31 524 217
9
82 844 975 61 337 268
11 34 084 736 39 125 173
Total current assets TOTAL ASSETS 151 139 135 247 737 501 131 986 658
217 108 608
219 976 462 195 646 509
15.2 11 299 149 10 820 149
Accounts payable 12 16 455 790 7 943 124
Deferred income 13 6 100 2 698 826
Total current liabilities 16 461 890 10 641 950
TOTAL EQUITY AND LIABILITIES 247 737 501
217 108 608
Cash and cash equivalents EQUITY AND LIABILITIES
Accumulated income Non-current liabilities
126
Current liabilities
Financial Statements
Financial Statements
Post-retirement benefit obligations 127
for the year ended 31 March 2014
STATEMENT OF CASH FLOWS
Notes 2014 N$ 2013
N$
Cash received from financial institutions 102 331 787 84 559 421
Cash paid to suppliers and employees (83 383 649) (67 975 076)
Net cash generated by operating activities 19 18 948 138 16 584 345
7
(1 857 757) (408 498)
Proceeds on disposal of equipment 25 694 21 170
Cash flows from operating activities
Cash flows from investing activities
Acquisition of equipment Acquisition of intangible assets 8
(91 287) (374 579)
Interest received 3
6 442 232 6 404 723
Dividends received 3
4 401 810 3 677 916
Increase in investments (32 909 267) (23 922 850)
Net cash used in investing activities (23 988 575) (14 602 118)
128
Proceeds from SIDA 13 -
1 996 879
Pre-paid levies 13 -
183 262
Net cash generated in financing activities -
2 180 141
Net increase in cash and cash equivalents (5 040 437) 4 162 368
Cash and cash equivalents at beginning of the year Cash and cash equivalents at end of the year 11 39 125 173 34 962 805
34 084 736 39 125 173
for the year ended 31 March 2014
1. ACCOUNTING POLICIES
The annual financial statements are prepared in accordance with and comply with International Financial Reporting Standards
(IFRS) adopted by the International Accounting Standards Board (IASB), and interpretations issued by the International Financial
Reporting Interpretations Committee (IFRIC) of the IASB.
The annual financial statements are prepared on the historical cost basis except that the following assets and liabilities are stated
at their fair value:
• Financial assets and financial liabilities classified as held for trading;
• Financial assets and financial liabilities designated at their fair value through profit or loss; and
• Financial assets classified as available-for-sale.
Non-current assets held for sale are stated at the lower of its carrying amount and fair value less costs to sell.
The accounting policies set out below have been applied consistently to all periods presented in these financial statements, except
for the new policy adopted on distributable reserves.
In the preparation of the financial statements, NAMFISA has recorded various assets and liabilities on the presumption that
NAMFISA is a going concern.
1.1. Adoption of new and revised standards
NAMFISA has adopted all of the new and revised Standards and Interpretations issued by the International Accounting Standards
Board (IASB) and the International Financial Reporting interpretations Committee (the IFRIC) of the IASI that are relevant to its
operation and effective for annual periods beginning 1 April 2013. However, the adoption of the Standards and Interpretations
did not result in any material adjustments to the reported figures.
New/Revised International
Financial Reporting Standards
IFRS 1
First-time Adoption of International Financial Reporting Standards
Effective for annual periods
beginning on or after
Financial Statements
Financial Statements
Cash flows from financing activities
NOTES TO THE ANNUAL FINANCIAL STATEMENTS
1 January 2013
– Amendments resulting from Annual Improvements
2009-2011 Cycle (repeat application, borrowing costs)
IFRS 7
Financial Instruments: Disclosures
– Amendments enhancing disclosures about offsetting of
financial assets and financial liabilities
IFRS 13 Fair Value Measurement
1 January 2013
IAS 1
Presentation of Financial Statements
1 January 2013
– Amendments resulting from Annual Improvements 2009-
2011 Cycle (comparative information)
IAS 16
Property, Plant and Equipment
– Amendments resulting from Annual Improvements 2009-
2011 Cycle (servicing equipment)
IAS19
Employee Benefits
– Amended Standard resulting from the Post-Employment
Benefits and Termination Benefits projects
129
1 January 2013
1 January 2013
1 January 2013
A reliable estimate of the impact of the adoption of the recent amendments on the Authority’s Financial Statements cannot yet be
determined. The Authority anticipates that the adoption of the recent standards and interpretations have no material impact on
the financial statements in future periods, except for disclosure to the financial statements.
NOTES TO THE ANNUAL FINANCIAL STATEMENTS (CONTINUED)
for the year ended 31 March 2014
1. ACCOUNTING POLICIES (CONTINUED)
1.3. Equipment
The following table contains International Financial Reporting Standards and International Accounting Standards recently
issued, but not yet effective, which have not been early adopted by the Authority and that might affect future financial periods:
New/Revised International
Financial Reporting Standards
Effective for annual periods
beginning on or after
IFRS 7
Financial Instruments: Disclosures
1 January 2015
– Amendments requiring disclosure about the initial
application of IFRS 9
IFRS 9
Financial Instruments
– Deferral of mandatory effective date of IFRS 9 and
amendments to transition disclosure
IFRS 9
Financial Instruments – Classification and Measurement
IFRS 9
Financial Instruments
– Accounting for financial liabilities and derecognition
IFRS 13 Fair Value Measurement
– Amendments resulting from Annual Improvements
2011-2013 Cycle
IAS 19 Employee Benefits
– Amended to clarify the requirement that relate to how
contributions from employees or third parties that are linked
to service should be attributed to periods of services
IAS 24 Related Party Disclosures
– Amendments resulting from Annual Improvements
2010-2012 Cycle (management entities)
IAS 32 Financial Instruments: Presentation
– Amendments to application guidance on the offsetting of
financial assets and financial liabilities
IAS 36 Amendments arising from Recoverable Amount Disclosure
for Non-Financial Assets
1 January 2017
1 January 2017
1 January 2017
1 July 2014
1 July 2014
Equipment is stated at cost, less accumulated depreciation. Depreciation is calculated on cost, less residual value over the
estimated useful lives of the assets using straight line method. The residual value and the useful life of each asset are reviewed at
each financial period end. Each part of an item of equipment with a cost that is significant in relation to the total cost of the item
shall be depreciated separately. The depreciation charge for each period is recognised in profit or loss unless it is included in the
carrying amount of another asset.
The gain or loss arising from derecognition of an item of equipment is included in profit or loss when the item is derecognised.
The gain or loss arising from derecognition of an item of equipment is determined as the difference between the net disposal
proceeds, if any, and the carrying amount of the item.
The depreciation rates applicable are as follows:
Computer equipment Office equipment Furniture and fittings Motor vehicles 3 – 10 years
3 – 10 years
10 years
5 – 7 years
1.4. Intangible assets
NAMFISA carries capitalised software assets at cost less amortisation and any impairment losses. The Authority amortises these
assets on a straight line basis at a rate applicable to the expected useful life of the asset, but not exceeding ten years.
1.5. Cash and cash equivalents
1 July 2014
Cash and cash equivalents comprise cash on hand, bank balances and demand deposits, and other short-term highly liquid
investments that are readily convertible to a known amount of cash and are subject to an insignificant risk of changes in value.
1 January 2014
1.6. Retirement benefits
1 January 2014
1.2. Revenue
Revenue comprises levies, registration and licence fees charged to financial institutions. The revenue is recognised when the
levies and fees become due in terms of NAMFISA regulations. Interest income is accrued on an apportionment basis, with
reference to the principal outstanding using the effective interest method. Dividend is recognised when NAMFISA’s right to
receive payment is established.
Contributions to NAMFISA’s provident fund are calculated so as to provide funding at a constant percentage of pensionable
remuneration. Contributions are therefore charged to income as incurred.
1.7. Financial instruments
Initial measurement
Financial assets and financial liabilities are recognised on NAMFISA’s statement of financial position when the entity has become
a party to the contractual provisions of the instrument. Financial instruments carried on the statement of financial position
include cash and cash equivalents, accounts receivable, accounts payable and investments.
Subsequent measurement
Fair values and the recognition methods of the different financial instruments are disclosed in the notes to the annual financial
statements. Fair value represents an approximation of the year end value, which may differ from the value that will be finally
realised.
Held-to-Maturity Financial assets
Held-to-maturity investments are financial assets with fixed determinable payments and fixed maturity that the Authority has the
positive intent and ability to hold to maturity. Held-to-maturity investments are measured at amortised cost using effective interest
method less any impairment, with revenue recognised on an effective yield. Investments are classified as financial assets in terms
of IAS39: Financial Instruments – Recognition and Measurements. Investments are classified as Held-To-Maturity assets (HTM),
Financial Assets at Fair Value Through Profit and Loss (FVTPL) and Available For Sale (AFS). Held-To-Maturity investments
are financial assets with fixed or determinable payments and fixed maturity that NAMFISA has the intent and ability to hold to
maturity. Such investments are measured at amortised cost using the effective interest rate method, less any impairment.
Financial Statements
Financial Statements
for the year ended 31 March 2014
1. ACCOUNTING POLICIES (CONTINUED)
1.1. Adoption of new and revised standards (continued)
130
NOTES TO THE ANNUAL FINANCIAL STATEMENTS (CONTINUED)
131
NOTES TO THE ANNUAL FINANCIAL STATEMENTS (CONTINUED)
for the year ended 31 March 2014
1. ACCOUNTING POLICIES (CONTINUED)
1.7. Financial instruments (continued)
1.7. Financial instruments (continued)
Subsequent measurement (continued)
Available-for-Sale Financial assets
Unlisted shares and listed redeemable notes are investments held by the Authority that are traded in the active market and
classified as being Available-for-Sale and are stated at fair value. Fair value is determined in the manner described in note 21.9.
Gains and losses arising from changes in the fair value are recognised directly in profit and loss. Dividends on Available-for-Sale
equity instruments are recognised in profit or loss when the Authority’s right to receive the dividends is established.
Subsequent measurement (continued)
The carrying amount of the financial asset is reduced by the impairment loss directly for all financial assets with the exception
of trade receivables, where the carrying amount is reduced through the use of an allowance account. When a trade receivable is
considered uncollectible, it is written off against the allowance account. Subsequent recoveries of amounts previously written off
are recognised in profit or loss.
A financial asset is classified as held for trading if:
• It has been acquired principally for the purpose of selling in the near future; or
• It is a derivative that is not designated and effective as a hedging instrument.
A financial asset other than a financial asset held for trading may be designated as at fair value through profit and loss upon initial
recognition if:
• Such designation eliminates or significantly reduces a measurement or recognition inconsistency that would otherwise arise; or
• It forms part of a contract containing one or more embedded derivatives, and IAS 39 Financial Instruments: Recognition and
Measurement permits the entire combined contract (asset or liability) to be designated as at fair value through profit and loss.
Financial assets at fair value through profit and loss are stated at fair value, with any resultant gain or loss recognised in profit or
loss. The net gain or loss recognised in profit or loss incorporates any dividend or interest earned in the financial asset. Fair value
is determined in the manner described in note 21.9.
Loans and receivables
Trade receivables, loans, and other receivables that have fixed or determinable payments that are not quoted in an active market
are classified as loans and receivables. Loans and receivables are measured at amortised cost using the effective interest method,
less any impairment. Interest income is recognised by applying the effective interest rate, except for short-term receivables when
the recognition of interest would be immaterial.
Impairment of financial assets
Financial assets, other than those at fair value through profit and loss, are assessed for indicators of impairment at each reporting
date. Financial assets are impaired where there is objective evidence that, as a result of one or more events that occurred after the
initial recognition of the financial asset, the estimated future cash flows of the investment have been impacted.
For unlisted shares classified as Available for Sale, a significant or prolonged decline in the fair value of the security below its cost
is considered to be objective evidence of impairment.
For all other financial assets, objective evidence of impairment include:
• Significant financial difficulty of the issuer or counterparty;
• Default or delinquency in interest or principal payments; or
• It becoming probable that the borrower will enter bankruptcy or financial reorganisation.
For certain categories of financial assets, such as trade receivables, assets are assessed for impairment on an individual basis.
Objective evidence of impairment for a portfolio of receivables could include the Authority’s past experience of collecting
payments, and increase in the number of delayed payments in the portfolio past the average credit period of 30 days, as well as
observable changes in national or local economic conditions that correlate with default on receivables.
For financial assets carried at amortised cost, the amount of the impairment is the difference between the asset’s carrying amount
and the present value of the estimated future cash flows, discounted at the financial asset’s original effective interest rate.
With the exception of available for sale equity instruments, if in a subsequent period, the amount of the impairment loss decreases
and the decrease can be related objectively to an event occurring after the impairment was recognised, the previously recognised
impairment loss is reversed through profit or loss to the extent that the carrying amount of the investment at the date the
impairment reversed does not exceed what the amortised cost would have been had the impairment not been recognised.
In respect of available for sale equity securities, impairment losses previously recognised through profit or loss are not reversed
through profit or loss. Any increase in fair value subsequent to an impairment loss is recognised directly in equity.
Financial liabilities at fair value through profit and loss (FVTPL)
Financial liabilities are classified as at FVTPL when the financial liability is either held for trading or it is designated as at FVTPL.
The Authority only has financial liabilities as held for trading under this category.
A financial liability is classified as held for trading if:
• It has been incurred principally for the purpose of repurchasing in the near future; or
• It is a derivative that is not designated and effective as a hedging instrument.
Financial liabilities at FVTPL are stated at fair value, with any resultant gain or loss recognised in profit or loss. The net gain or
loss recognised in profit or loss incorporates any interest paid on the financial liability.
Trade and other payables
Trade and other payables are initially measured at fair value, and are subsequently measured at amortised cost, using the effective
interest rate method.
Bank overdrafts and other short-term borrowings
Interest-bearing bank overdrafts and other short-term borrowings are recorded at the proceeds received, net of direct issue costs.
Offsetting financial instruments and related income
Financial assets and liabilities are offset and the net amount reported in the statement of financial position only when there
is a legally enforceable right to offset and intention to settle either on a net basis or to realise the asset and settle the liability
simultaneously.
Derecognition
NAMFISA derecognises a financial asset when:
• The contractual rights to the cash flows arising from the financial assets have expired or been forfeited by NAMFISA;
• It transfers the financial assets, including substantially all the risks and rewards of ownership of the assets; or
• It transfers the financial asset, neither retaining nor transferring substantially all the risks and rewards of ownership of the asset,
but no longer retains control of the asset.
A financial liability is derecognised when, and only when the liability is extinguished, that is, when the obligation specified in the
contract is discharged, cancelled or has expired.
Financial Statements
Financial Statements
for the year ended 31 March 2014
1. ACCOUNTING POLICIES (CONTINUED)
Fair-Value-through-Profit-and-Loss Financial assets
Financial assets are classified as at Fair-Value-through-Profit-and-Loss where the financial asset is either held for trading or it is
designated as at fair value through profit and loss.
132
NOTES TO THE ANNUAL FINANCIAL STATEMENTS (CONTINUED)
133
NOTES TO THE ANNUAL FINANCIAL STATEMENTS (CONTINUED)
for the year ended 31 March 2014
NOTES TO THE ANNUAL FINANCIAL STATEMENTS (CONTINUED)
for the year ended 31 March 2014
1. ACCOUNTING POLICIES (CONTINUED)
1. ACCOUNTING POLICIES (CONTINUED)
1.8. Impairment of tangible and intangible assets
1.10. Provisions
At each reporting date, NAMFISA reviews the carrying amounts of its tangible and intangible assets to determine whether there
is any indication that those assets may be impaired. If any such indication exists, the recoverable amount of the asset is estimated
in order to determine the extent of the impairment loss, if any.
Provisions are recognised when NAMFISA has a present obligation as a result of a past event and it is probable that this will result
in an outflow of economic benefits that can be reliably estimated.
The recoverable amount is the higher of fair value less costs to sell and value in use. In assessing the value in use, the estimated
future cash flows are discounted to their present value using a discount rate that reflects current market assessments of the time
value of money and the risks specific to the asset. If the recoverable amount of an asset is estimated to be less than its carrying
amount, the carrying amount of the asset is reduced to its recoverable amount. An impairment loss is recognised immediately
in profit and loss, unless the relevant asset is carried at a revalued amount, in which case the impairment loss is treated as a
revaluation decrease. Where an impairment loss subsequently reverses, the carrying amount of the asset is increased to the
revised estimate of its recoverable amount, but so that the increased carrying amount does not exceed the carrying amount that
would have been determined had no impairment loss been recognised for the asset in prior years. A reversal of an impairment
loss is recognised immediately in profit and loss, unless the relevant asset is carried at the revalued amount, in which case the
reversal of the impairment loss is treated as a revaluation increase.
The amount of a provision is the present value of the expenditure expected to be required to settle the obligation.
Where some or all of the expenditure required to settle a provision is expected to be reimbursed by another party, the
reimbursement shall be recognised when, and only when, it is virtually certain that reimbursement will be received if the entity
settles the obligation. The reimbursement shall be treated as a separate asset. The amount recognised for the reimbursement shall
not exceed the amount of the provision.
1.11. Leases
Operating leases
Rentals payable under operating leases are charged to income on a straight-line basis over the relevant period. Any contingent
rents are expensed in the period they are incurred.
134
Medical benefits
NAMFISA provides for post-retirement medical benefits in the form of a medical aid scheme for eligible employees and pensioners.
The cost of providing benefits is determined using the Projected Unit Credit Method prescribed by IAS19 Employee Benefits. The
liability for NAMFISA’s contribution to the scheme is in respect of current and future periods, provided for by means of a liability
on the statement of financial position. The magnitude of the liability is based on an actuarial valuation. Actuarial gains and losses
on the post-retirement medical benefits are accounted for in the year in which they arise.
The amount recognised in the statement of financial position represents the present value of the defined benefit obligation as
adjusted for unrecognised actuarial gains and losses and unrecognised past service costs, and reduces by the fair value of plan
assets.
Severance pay
In accordance with the Namibian Labour Act of 2007, severance benefits are payable to an employee, if:
a) The employee is dismissed;
b) Dies while employed; or
c) Resigns or retires on reaching the age of 65.
The obligation for severance benefits to current employees is actuarially determined in respect of all its employees and is provided
for in full. The cost of providing benefits is determined using the Projected Unit Credit Method, prescribed by IAS 19 Employee
Benefits, with actuarial valuations being carried out at each reporting date.
Actuarial gains and losses on severance pay are accounted for in the year in which they arise. The amount of the liability is based
on the actuarial valuation as at 31 March 2014. The amount recognised in the statement of financial position represents the fair
value of the severance pay obligation adjusted for unrecognised actuarial gains and losses.
1.12. Critical accounting estimates and judgements in applying accounting policies
NAMFISA makes estimates and assumptions that affect the reported amounts of assets and liabilities within the next financial year.
Estimates and judgements are continually evaluated and are based on historical experience and other factors, including expectations
of future events that are believed to be reasonable under the circumstances. The key assumptions concerning the future and other
key sources of estimation uncertainty at the reporting date that have a significant risk of causing a material adjustment to the
carrying amounts of assets and liabilities within the next financial year, are discussed in note 18 to the financial statements.
Post-retirement medical aid benefits are provided for certain existing and former employees. Actuarial valuations are based on
assumptions which include employee turnover, mortality rates, the discount rate, healthcare inflation cost and rates or increase
in compensation costs. Provisions were raised and management determined an estimate based on the information available.
Additional disclosures of these estimates are included in note 15 – Post retirement benefit obligations.
Financial Statements
Financial Statements
1.9. Post-retirement benefits
135
NOTES TO THE ANNUAL FINANCIAL STATEMENTS (CONTINUED)
for the year ended 31 March 2014
2. REVENUE
An analysis of the Authority’s revenue for the year is as follows: 2014 N$ 2013
N$
Levies 102 358 579 83 840 810
- Office equipment
Income for the year is derived after taking into account the following items:
20142013
N$
N$
Office rental expenses:
334 590
309 748
Registration and licence fees 224 265 306 580
- Parking
794 381
618 158
102 582 844 84 147 390
- Offices
8 636 440
5 681 141
9 765 411
6 609 047
Unit trusts 14 854 010 11 947 028
Staff costs:
Asset management 17 948 884 14 633 562
- Salaries and bonuses
34 884 258
28 238 868
Stock brokers 2 283 975 2 067 309
- Housing and transport allowances
10 809 113
8 826 783
Short-term insurance 24 893 727 23 303 723
- Defined contribution pension plan
5 569 684
4 419 177
Long-term insurance 15 638 011 12 104 937
- Other pension funds
110 942
100 723
Pension funds 3 249 110 3 326 457
- Defined benefit medical aid plan
1 104 000
953 000
Medical aid funds and friendly societies 893 280 844 348
- Other medical aid costs
2 316 957
1 898 371
Micrlending 22 597 582 15 613 446
- Training and development
2 196 697
1 348 476
102 358 579 83 840 810
- Other staff costs
3 335 956
3 180 334
60 327 607
48 965 732
3. INVESTMENT INCOME
Other operating expenses which includes the following:
2014 N$ 2013
N$
Interest received
- Held-to-maturity investments 4 666 600 4 042 196
- Bank deposits 1 775 632 2 362 527
6 442 232 6 404 723
12 826 799
10 637 595
Audit fees
External auditor fees - audit
425 261
397 440
External auditor fees - other audit services
53 572
-
478 833
397 440
(Profit) / Loss on disposal of equipment and intangible assets
24 274
(5 483)
Financial Statements
Financial Statements
for the year ended 31 March 2014
6. INCOME FOR THE YEAR
Levies per industry segment
Board member’s emoluments – for services as Board members:
Dividend received
136
NOTES TO THE ANNUAL FINANCIAL STATEMENTS (CONTINUED)
- Unit trusts 4 401 810 3 677 916
10 844 042 10 082 639
Rick Kukuri Chairperson (outgoing)
150 512
171 726
Titus Ipumbu
Vice-Chairperson (outgoing)
77 742
115 979
Heinrich Nashenda
61 485
122 023
Chairperson (incoming)
141 609
114 105
4. OTHER INCOME
Estelle Tjipuka
Malverene Theron
74 359
118 213
2014 N$ 2013
N$
Gersom Katjimune
Vice-Chairperson (incoming)
60 339
-
Bonifatius Konjore
51 939
-
Interest on late payments 436 466 1 116 421
Simeon Amunkete
80 765
-
Rules amendment and penalty fees 2 800 295 427 214
698 750
642 046
Other income 136 540 59 223
3 373 301 1 602 858
5. INCOME TAX
The Authority is exempt from income taxes in terms of section 16(1) (e) of the Income Tax Act, No 24 of 1981.
Doubtful debts impairment
963 425
1 046 133
Information and Communication Technology
3 200 783
2 328 554
Stakeholder Engagement
1 566 684
1 536 271
Regulatory seminars
1 396 277
1 152 394
Social responsibility
1 237 521
709 724
Subscriptions and membership fees
801 222
515 397
137
NOTES TO THE ANNUAL FINANCIAL STATEMENTS (CONTINUED)
for the year ended 31 March 2014
7. EQUIPMENT
NOTES TO THE ANNUAL FINANCIAL STATEMENTS (CONTINUED)
8. INTANGIBLE ASSETS
Motor
vehicles
N$
Furniture and
fittings
N$
Office
equipment
N$
Computer
equipment
N$
Total
N$
Computer Software Cost
At 1 April 2012 Additions Cost
At 1 April 2012 Disposals 982 641
2 259 175 562 910 2 561 295 6 366 021
At 31 March 2013 5 095 173
374 579
5 469 752
Additions -
226 982 44 279 137 237 408 498
Additions 91 287
-
(24 255) -
-
(24 255)
Disposals -
At 31 March 2013 982 641 2 461 902 607 189 2 698 532 6 750 264
At 31 March 2014 5 561 039
Additions -
357 643 55 624 1 444 490 1 857 757
Disposals -
(53 295) (71 975) (117 720) (242 990)
Amortisation
At 31 March 2014 982 641 2 766 250 590 838 4 025 302 8 365 031
At 1 April 2012 637 303
Charge for the year 492 345
Accumulated depreciation
Eliminated on disposal 24 907 711 596 402 570 1 460 350 2 599 423
196 528 221 809 (6 018) 330 088 742 407
At 31 March 2013 Charge for the year Depreciation for the year Eliminated on disposal Disposals -
(8 569)
-
-
(8 569)
At 31 March 2013 221 435 924 836 396 552 1 790 438 3 333 261
At 31 March 2014 Depreciation for the year 185 833 343 165 105 468 568 036 1 202 502
Carrying amount
1 129 648
621 718
1 751 366
Disposals -
(37 150) (67 371) (88 501) (193 022)
At 31 March 2013 4 340 104
At 31 March 2014 407 268 1 230 851 434 649 2 269 973 4 342 741
At 31 March 2014 3 809 673
Carrying amount
At 31 March 2013 761 206 1 537 066 210 637 908 094 3 417 003
At 31 March 2014 575 373 1 535 399 156 189 1 755 329 4 022 290
138
Financial Statements
Financial Statements
N$
Disposals At 1 April 2012 for the year ended 31 March 2014
139
During the year, NAMFISA reviewed the useful lives of all items used for the purposes of depreciation calculations. The review
indicated that the useful lives of certain items of equipment needed to be extended. The financial effect of this extension in useful
lives is stated in note 18.3. The carrying value of equipment is assessed on an annual basis.
NOTES TO THE ANNUAL FINANCIAL STATEMENTS (CONTINUED)
for the year ended 31 March 2014
9. OTHER FINANCIAL ASSETS
10. ACCOUNTS RECEIVABLE
2014 N$ Held-to-maturity investments carried at
amortised cost
Current Non-current
2013 2014 2013
N$ N$ N$
Fixed deposits 56 360 410 -
-
82 844 975 Treasury Bills -
4 976 858 -
-
82 844 975 61 337 268 -
-
Available-for-sale investments carried at
fair value
Unit trusts - opening balance
-
77 364 843 2014
N$ 2013
N$
Gross levies receivable 46 179 537 42 704 692
Allowance for doubtful debts (14 567 528) (13 620 053)
Net levies receivable 31 612 009 29 084 639
Pre-paid expenses 1 649 955 1 723 032
Staff advances – study loans 947 460 716 546
Total 34 209 424 31 524 217
57 636 927
- Invested -
-
15 000 000 21 050 000
-
-
(8 000 250)
(5 000 000)
- Dividends received
-
-
4 401 810 3 677 916
- Fair value
-
-
88 766 403 77 364 843
82 844 975 61 337 268 88 766 403 77 364 843
Unit trusts are classified as non-current financial assets as it is the intention of the Authority to retain these investments for the
foreseeable future extending over more than 1 year.
Movement in
allowance
for doubtful
debts
Balance at 1 April 2012 Capital Life Short-term Markets Insurance Insurance Micro- lenders Pension Funds Medical Aid Funds Carrying
Amount
287 548 8 774 588 1 745 837 1 011 436 812 853 38 384 12 670 646
(11 022) 1 458 610 201 985 (413 080) (194 972) 961 1 042 482
Impairment losses
recognised Amounts written off as
uncollectable Balance at 31 March 2013 -
(59 575)
-
(7 414)
(26 086) -
(93 075)
276 526 10 173 623 1 947 822 590 942 591 795 39 345 13 620 053
28 614 500 501 (34 523) (51 182) 507 468 12 547 963 425
Impairment losses
recognised Financial Statements
Financial Statements
-
- Withdrawal for the year ended 31 March 2014
NOTES TO THE ANNUAL FINANCIAL STATEMENTS (CONTINUED)
Amounts written off as
140
uncollectable (10 975)
-
(4 514) -
(461) -
(15 950)
Balance at 31 March 2014 294 165 10 674 124 1 908 785 539 760 1 098 802 51 892 14 567 528
Of the allowance for doubtful debt amount for the life insurance industry, an amount of N$10 674 124 (2013: N$10 173 623)
relates to agents and brokers.
141
NOTES TO THE ANNUAL FINANCIAL STATEMENTS (CONTINUED)
for the year ended 31 March 2014
10. ACCOUNTS RECEIVABLE (CONTINUED)
Ageing of past due but not impaired
2014 N$ 2013
N$
Capital markets 150 991 -
Collective investments 50 -
Life insurance 3 559 421 -
Pension funds 523 759 146 431
Medical aid funds and friendly societies 35 250 40 251
Microlenders 246 335 -
Short-term insurance 113 959 -
4 629 765 186 682
2014 N$ 2013
N$
Swedish International Development Cooperation Agency (SIDA) -
1 996 879
Pre-paid levies 6 100 701 947
6 100 2 698 826
NAMFISA entered into a partner-driven cooperation agreement through SIDA with a Finansinspektionen in Sweden. In terms of
this agreement, SIDA will contribute to the funding of a project aimed at enabling and improving NAMFISA in its development
work into a modern supervisory authority for risk-based supervision. Technical assistance by an international expert is needed
in regard to the Authority’s role for the safeguarding, development and deepening of the financial sector in Namibia. The project
is fully supported by the Ministry of Finance, the Bank of Namibia and the Swedish Riksbank. The project duration is from
November 2012 till March 2014.
14. OPERATING LEASE COMMITMENTS
Ageing of impaired receivables
More than 180 days:
Capital markets 294 165 276 527
Life insurance 10 674 124 10 173 623
Short-term insurance 1 908 786 1 947 822
Microlenders 539 759 590 941
Pension funds 1 098 802 591 795
Medical aid funds and friendly societies 51 892 39 345
14 567 528 13 620 053
Due to the short-term nature of accounts receivable, the fair value approximates its book value.
Operating leases relate to office facilities with a lease term of three to four years.
2014 N$ 2013
N$
Office buildings:
Within one year 7 061 566 5 038 284
In the second to fifth years 12 693 345 104 952
19 754 911 5 143 236
Within one year 891 427 127 559
In the second to fifth years 1 271 438 125 936
After five years -
31 392
Office equipment:
11. CASH AND CASH EQUIVALENTS
2014 N$ 2013
N$
Cash and bank balances 30 304 437 37 127 988
Funds received from SIDA 3 780 299 1 997 185
34 084 736 39 125 173
12. ACCOUNTS PAYABLE
2014 N$ 2013
N$
Unallocated deposits 514 175 76 766
Accrued staff costs 4 070 896 2 361 826
Payables and other accruals 5 621 606 1 890 570
Audit fees 254 709 285 378
Staff benefits - Leave 3 906 727 3 328 584
Swedish International Development Cooperation Agency (SIDA)
2 087 677 -
16 455 790 7 943 124
2 162 865 284 887
21 917 776 5 428 123
Current 57 244 175 669
Non-current 1 644 306 (3 883)
1 701 550 171 786
In respect of non-cancellable operating leases the following
(assets) / liabilities have been raised:
The fair value of the operating lease liabilities is approximately equal to their carrying amount.
Financial Statements
Financial Statements
for the year ended 31 March 2014
13. DEFERRED INCOME
More than 180 days:
142
NOTES TO THE ANNUAL FINANCIAL STATEMENTS (CONTINUED)
143
NOTES TO THE ANNUAL FINANCIAL STATEMENTS (CONTINUED)
for the year ended 31 March 2014
15. RETIREMENT BENEFIT PLANS
15. RETIREMENT BENEFIT PLANS (CONTINUED)
15.1. Defined contribution provident benefits
15.2. Post-retirement benefits obligations (continued)
The Authority established the NAMFISA Provident Fund on 1 April 2007. The Fund is a defined contribution fund for all qualifying
employees. The total expense recognised in the statement of comprehensive income represents the contributions payable to
the Fund at the rate of 16% of pensionable remuneration. Employees contribute to the Fund at a rate of 7% of pensionable
remuneration. The fund was last valued as at 31 March 2013 and was found to be sound.
Sensitivity Analysis:
The effect of 1% movement in the assumed health cost rate is as follows:
The total value of the contributions to the pension
fund during the year amounted to:
2014 N$ 2013
N$
Employer contributions 5 569 684 4 419 177
Employee contributions 2 436 737 1 933 390
Total contributions for the period 8 006 421 6 352 567
At 31 March 2014
-1% Medical
inflation
Valuation assumption
+1% Medical
inflation
-Effect on defined benefit obligation 8 952 000 11 057 149 13 800 000
-Effect on current service cost and interest cost 1 481 000 1 869 000 2 378 000
-Effect on defined benefit obligation 8 268 000 10 559 149 13 683 000
-Effect on current service cost and interest cost 1 738 000 2 257 000 2 971 000
Discount rate 8.89% 9.50%
At 31 March 2013
2014 N$ 2013
N$
Post-retirement medical aid benefits 11 057 149 10 559 149
Severance pay 242 000
261 000
11 299 149 10 820 149
Post-retirement medical aid benefits
NAMFISA provides post-retirement medical aid benefits to all qualifying staff members appointed before August 2009. An
actuarial valuation has been performed at 31 March 2014 to determine the present value of the employer’s subsidy towards the postemployment medical scheme of current and future pensioners of NAMFISA. A provision for the liability has been created which
covers the total liability, i.e. the accumulated post-retirement medical benefits at fair value. The present value of the obligation and
the related current service cost and past service cost was measured using the projected unit credit method. For the period under
review, the current service cost and interest is accounted for as reflected in the actuarial valuation done at 31 March 2014.
2014 N$ 2013
N$
Net liability at beginning of the year 10 559 149 7 989 149
Service cost 1 258 000 1 070 000
Interest cost 999 000 668 000
Actuarial (gain) / loss (1 605 000) 949 000
Subsidies paid (154 000) (117 000)
Net liability recognised in the statement of financial position 11 057 149 10 559 149
2014 N$ 2013
N$
The amounts recognised in the statement of
financial position are as follows:
The amounts recognised in the statement of comprehensive
Medical inflation rates 8.74% 8.90%
Valuation date 31/03/2014 31/03/2013
Current service and interest cost in the analysis are based on the valuation assumption for the year following the valuation date.
Present value of obligation:
2014 11 057 149
-
2013 10 559 149 10 559 149
2012 7 989 149 7 989 149
2011 6 111 149 6 111 149
Severance pay
In accordance with the Namibian Labour Act of 2007, NAMFISA has an obligation to provide for severance pay benefits to all staff
members. An actuarial valuation has been performed at 31 March 2014 to determine the present value of the employer’s obligation
in terms of severance benefits towards current employees of NAMFISA. A provision for the liability has been created which covers
the total liability, i.e. accrued severance pay obligation at fair value. The present value of the obligation and the related current
service cost and past service cost was measured using the projected unit credit method. For the period under review, the current
service cost and interest is accounted for as reflected in the actuarial valuation done at 31 March 2014.
2014 N$ 2013
N$
Net liability at beginning of the year 261 000 126 000
Service cost 52 000 26 000
Interest cost 22 000 11 000
Actuarial (gain) / loss (93 000) 98 000
Net liability recognised in the statement of financial position 242 000 261 000
Current service cost 52 000 26 000
Interest on obligation 22 000 11 000
The amounts recognised in the statement of financial position are as follows:
The amounts recognised in the statement of comprehensive income are as follows:
income are as follows:
Current service cost 1 258 000 1 070 000
Subsidies paid (154 000) (117 000)
1 104 000 953 000
Interest on obligation 999 000 668 000
Actuarial (gain) / loss recognised in the year (1 605 000) 949 000
Total 498 000 2 570 000
Actuarial (gain) / loss recognised in the year (93 000) 98 000
Total (19 000) 135 000
Financial Statements
Financial Statements
for the year ended 31 March 2014
Key assumptions:
15.2. Post-retirement benefits obligations
144
NOTES TO THE ANNUAL FINANCIAL STATEMENTS (CONTINUED)
145
for the year ended 31 March 2014
NOTES TO THE ANNUAL FINANCIAL STATEMENTS (CONTINUED)
15. RETIREMENT BENEFIT PLANS (CONTINUED)
16. CAPITAL COMMITMENTS
15.2. Post-retirement benefits obligations (continued)
Severance pay (continued)
Sensitivity Analyses:
The effect of 1% movement in the assumed salary inflation rate is as follows:
Commitments for acquisition of software – authorised but not contracted -1% Salary
inflation
Valuation
assumption
+1% Salary
inflation
-Effect on defined benefit obligation 217 000 242 000 270 000
71 000 81 000 92 000
2014 N$ 2013
N$
9 000 000 790 000
Commitments for acquisition of property – authorised but not contracted 53 760 000 11 000 000
62 760 000 11 790 000
Part of the Authority’s strategic imperative is to have its own office space to enhance operational efficiency and institutional
capacity to execute its mandate. In this respect provision is made for the acquisition of land to build its own office complex. These
capital expenditures will be financed from existing cash reserves.
17. RELATED PARTY TRANSACTIONS
At 31 March 2013
-Effect on defined benefit obligation -Effect on current service cost and interest cost 234 000 261 000 292 000
66 000 74 000 84 000
The effect of 20% movement in the assumed employee mortality rate is as follows:
At 31 March 2014
-Effect on defined benefit obligation -Effect on current service cost and interest cost -20%
Valuation
Mortality
assumption
rate +20%
Mortality
rate
196 000 242 000 287 000
66 000 81 000 96 000
At 31 March 2013
-Effect on defined benefit obligation -Effect on current service cost and interest cost 211 000 261 000 309 000
60 000 74 000 88 000
Key assumptions:
Investment return Salary inflation rate
8.18% 7.20%
7.36% 6.80%
Valuation date 31/03/2014 31/03/2013
Current service and interest cost in the analysis are based on the valuation assumption for the year following the valuation date.
Present value of obligation:
2014 242 000
-
2013 261 000 261 000
2012 126 000 126 000
2011 93 000 93 000
NAMFISA regards the Ministry of Finance and other parastatals falling under the same ministry as related parties as well as
Board members and key management who can exercise control and influence over the affairs of the Authority. During the year,
the Authority did not enter into any material transactions with the Government of Namibia and/or any parastatals other than as
reflected below:
17.1. Compensation of Board members and key management personnel
At 31 March 2014
Board member’s fees Short-term
benefits
Post Retirement
benefits
698 750 -
Total
698 750
Other key management 10 750 891 1 065 022 11 815 913
11 449 641 1 065 022 12 514 663
At 31 March 2013
Board member’s fees 642 046 -
642 046
Other key management 8 698 650 934 768 9 633 418
9 340 696 934 768 10 275 464
In July 2011, NAMFISA was exempted from the provisions of the State Owned Enterprises Act 2 of 2006.
In August 2011 the Minister of Finance approved the remuneration of NAMFISA board members to be aligned at the upper
quartile of the gazetted State Owned Enterprises remuneration framework.
17.2. Loans to key management personnel
The loans granted to key management constitutes study loans granted in terms of the Authority’s study loan policy. The loans are
repayable over a maximum period of 60 months. On successful completion of studies, the balance remaining is fully written off
and 80% of the amount repaid is reimbursed to the staff member.
2014 N$ 2013
N$
Opening balance 110 698 130 701
Loans granted 46 550 45 900
Repayments (27 238) (65 903)
Closing balance 130 010 110 698
-Current 36 536 18 047
-Non-current 93 474 92 651
130 010 110 698
Financial Statements
Financial Statements
for the year ended 31 March 2014
Capital commitments up to 31 March 2014
At 31 March 2014
-Effect on current service cost and interest cost 146
NOTES TO THE ANNUAL FINANCIAL STATEMENTS (CONTINUED)
147
for the year ended 31 March 2014
NOTES TO THE ANNUAL FINANCIAL STATEMENTS (CONTINUED)
20. CREDIT FACILITIES
The key assumptions concerning the future and other key sources of estimation uncertainty at the reporting date, that have a
significant risk of causing a material adjustment to the carrying amounts of assets and liabilities within the next financial year, are
discussed below:
The Authority maintains current accounts at First National Bank of Namibia Ltd and Standard Bank of Namibia Ltd as well as
credit card and fleet management facilities at Standard Bank of Namibia Ltd.
At reporting date the Authority considered the recoverability of levies outstanding through individual assessment of outstanding
balances. Past experience such as payment history and current business activities were taken into account in determining
classification of accounts receivable as doubtful debts and the calculation of the impairment to be raised against these doubtful
accounts. Receivable balances outstanding for more than 180 days have been fully provided for. A total impairment of N$14 567
528 (2013: N$13 620 053) exists at the end of the current year.
The following is a summary of facilities maintained:
2014 N$ 2013
N$
Fleet management 6 000 6 000
Credit cards 150 000 150 000
156 000 156 000
Financial assets
2014 N$ 2013
N$
18.3 Useful lives of equipment and intangible assets
Held-to-maturity investments 82 844 975 61 337 268
Loans and receivables 34 209 424 31 524 217
NAMFISA reviews the useful lives of equipment at the end of each reporting period. During the current year NAMFISA determined
that the useful lives of certain items of equipment and intangible assets be extended.
Cash and cash equivalents 34 084 736 39 125 173
Available-for-sale financial assets 88 766 403 77 364 843
12 555 163
7 313 366
18.2. Levy estimates
21. FINANCIAL INSTRUMENTS
21.1. Categories of financial instruments
NAMFISA has included in the revenue figure, an estimate of levies amounting to N$789 977 (2013: N$22 004 126). The estimates
are as a result of late submission of returns by the institutions and the calculation was based on the previous monthly or quarterly
returns submitted during the year.
The financial effect of the extension of estimated useful lives is to increase / (decrease) the depreciation expense in the current year
and the following three years as follows:
Financial liabilities
Equipment N$
Intangibles N$
2014 (17 750) 2014 7 561
21.2. Market risk
2015 349 537 2015 7 561
2016 (14 208) 2016 7 595
2017 16 933 2017 (3 857)
Amortised cost The Authority’s exposure to market risk is principally with regard to interest rates on cash placed with banks and investment houses.
21.3. Significant accounting policies
Details of the accounting policies and methods adopted (including the criteria for recognition, the basis of measurement, and the
basis of recognition of income and expenses) for each class of financial asset and financial liability are disclosed in note 1.7.
19. RECONCILIATION OF SURPLUS TO CASH GENERATED BY OPERATIONS
2014 N$ 2013
N$
Income for the year 24 329 953 21 469 984
Depreciation and amortisation 1 824 220 1 234 752
Interest received (6 442 232) (6 404 723)
(Profit) / loss on disposal of equipment and intangibles 24 274 (5 483)
Adjusted for:
Increase in bad debts impairment net of write-off 963 425 1 046 133
Increase in post-retirement benefit obligations 479 000 2 705 000
Dividends received (4 401810) (3 677 916)
Operating income before working capital changes 16 776 830 16 367 747
Working capital changes 2 171 308 216 598
Increase in accounts receivable (3 648 632)
(1 185 344)
Increase in accounts payable 8 512 666 1 401 942
Decrease in deferred income (2 692 726)
-
Cash generated by operations 18 948 138
16 584 345
Financial Statements
Financial Statements
for the year ended 31 March 2014
18. CRITICAL ACCOUNTING ESTIMATES AND JUDGEMENTS
18.1. Impairment of accounts receivables
148
NOTES TO THE ANNUAL FINANCIAL STATEMENTS (CONTINUED)
21.4. Capital risk management
The Authority’s objective in managing its capital is to safeguard the Authority’s ability to continue as a going concern by ensuring
a sufficient cushion against unexpected deficits. There is no statutory capital adequacy requirements imposed upon the Authority
and capital comprises of accumulated income.
21.5. Interest rate risk management
As part of the process of managing the Authority’s interest rate risk, interest rate characteristics of new investments and the
refinancing of existing investments are positioned according to expected movements in interest rates.
The sensitivity analysis below has been determined based on the exposure to interest rates for both variable and fixed interest rate
instruments at the reporting date. A 50 basis point increase or decrease is used to compute interest rate sensitivity and represents
the Authority’s assessment of reasonably possible change in interest rates.
If interest rates had been 50 basis points higher/ lower and all other variables held constant, the Authority’s income for the year
ended 31 March 2014 would increase/ decrease by N$980 531 (2013: N$879 753). This is mainly attributable to the Authority’s
exposure to interest rates on variable rate financial assets.
149
NOTES TO THE ANNUAL FINANCIAL STATEMENTS (CONTINUED)
for the year ended 31 March 2014
21. FINANCIAL INSTRUMENTS (CONTINUED)
21. FINANCIAL INSTRUMENTS (CONTINUED)
21.6. Credit risk management
21.6. Credit risk management (Continued)
The Authority is exposed to credit risk through its cash surpluses that it places with banks and investment houses as well as the
defaulting of levy payments by the regulated industry players. The Authority only invests with banks and investment houses of high
quality credit standing. Exposure to banks and investment houses are monitored on a regular basis and surplus funds are spread
across approved financial institutions. Levy receivables are spread across industry segments. The Authority does not have any
significant credit risk exposure to any single counterparty. Concentration of credit risk did not exceed 5% of gross monetary assets
at any time during the year. Exposure to credit risk related to levy receivables is mitigated by fully providing for impaired receivables.
The table below indicates the exposure in other financial assets spread among banks and other investment houses:
The table below shows the maximum exposure to credit risk relating to receivable, before and after taking allowance for doubtful
debts into account:
Maximum credit risk
2014 2013
N$ N$
Exposure per industry segment: 46 179 537 42 704 692
Capital markets 9 451 411 7 765 802
Collective investments 7 471 985 5 953 268
Life insurance 17 981 356 14 779 502
Short term insurance 5 864 941 9 088 560
Microlenders 2 589 574 3 542 675
Pension funds 2 432 089 1 254 295
Medical aid funds and friendly societies 388 181
320 590
46 179 537 42 704 692
14 562 519 12 150 991
60 to 180 days (493 981) (1 218 058)
Less than 60 days 32 110 999 31 771 759
Age analysis:
Older than 180 days 46 179 537 42 704 692
Provision for doubtful debts (14 567 528) (13 620 053)
Net exposure 31 612 009 29 084 639
At year-end the Authority did not consider there to be any significant concentration of credit risk which has not been adequately
provided for.
Institution
Fixed deposits
N$ Treasury bills N$ Unit trusts
N$ Total
N$
Bank Windhoek 15 461 974 -
31 058 254 46 520 228
Old Mutual -
-
34 854 636 34 854 636
First National Bank 10 518 027
-
-
10 518 027
Simonis Storm Securities -
-
22 853 513 22 853 513
Namibia Equity Brokers 10 554 438
-
-
10 554 438
Standard Bank 20 466 363 -
-
20 466 363
Nedbank 15 317 214 -
-
15 317 214
Nampost Bank 10 526 959
-
-
10 526 959
Balance as at 31 March 2014: 82 844 975
-
88 766 403 171 611 378
Bank Windhoek 20 381 592 -
22 763 696 43 145 288
Old Mutual -
-
29 975 636 29 975 636
Simonis Storm Securities
-
-
24 625 511 24 625 511
Namibia Equity brokers 10 351 179 4 976 858 -
15 328 037
Standard Bank 10 572 549 -
-
10 572 549
Nedbank 10 049 384
-
-
10 049 384
Nampost bank 5 005 706
-
-
5 005 706
56 360 410 4 976 858 77 364 843 138 702 111
Balance as at 31 March 2013: Financial Statements
Financial Statements
150
for the year ended 31 March 2014
NOTES TO THE ANNUAL FINANCIAL STATEMENTS (CONTINUED)
151
NOTES TO THE ANNUAL FINANCIAL STATEMENTS (CONTINUED)
for the year ended 31 March 2014
NOTES TO THE ANNUAL FINANCIAL STATEMENTS (CONTINUED)
for the year ended 31 March 2014
21. FINANCIAL INSTRUMENTS (CONTINUED)
21. FINANCIAL INSTRUMENTS (CONTINUED)
21.7. Liquidity risk management
21.8. Foreign currency risk management
The Authority has minimised its liquidity risk by ensuring adequate cash balances and maintaining adequate reserves. Summary
of exposure to interest rate risk:
The Authority does not incur currency risk as it does not have significant transactions in foreign currencies.
21.9. Fair value
Financial liabilities
2014 N$ 2013
N$
Non-interest bearing - less than 1 month -
-
- 1 to 3 months 5 876 315 2 175 948
- 3 months to 1 year 4 591 171 5 137 418
10 467 486 7 313 366
2 117 291
-
Interest bearing - 1 to 3 months 152
Quoted price
Financial assets in this category include listed redeemable notes, bills of exchange and debentures. Financial liabilities include bills
of exchange and perpetual notes.
The financial statements include holdings in the Bank Windhoek Select Unit Trust Fund, which is carried at fair value, which is
considered to be its quoted market price at year end.
The following table shows expected maturity for financial assets. The table has been drawn up based on the undiscounted
contractual maturities of the financial assets including interest that will be earned on those assets except where cashflow may occur
in a different period.
The Authority considers the carrying amounts of financial assets and financial liabilities recorded at amortised cost in the financial
statements to approximate their fair values.
Variable interest rate instruments:
22. CONTINGENT LIABILITY
Less than 1 month 34 084 736 39 125 173
1 to 3 months -
-
3 months – to 1 year
-
-
1+ years 88 766 403 77 364 843
122 851 139 116 490 016
Less than 1 month -
-
1 to 3 months -
-
Fixed interest rate instruments:
3 months to 1 year 82 844 975 61 337 268
1+ years -
-
82 844 975 61 337 268
Weighted average return 5.65% 6.13%
Non-interest bearing instruments:
Less than 1 month
-
-
1 to 3 months 1 649 955 1 723 032
3 months to 1 year 32 559 469 29 801 185
34 209 424 31 524 217
The Authority is involved in a number of litigation cases related to the fulfillment of its regulatory mandates. The Authority is
addressing these cases in conjunction with its legal advisors. It is management’s assessment that the outcome of these cases will not
have a material effect on the financial position of the Authority.
As is public record, NAMFISA is a co-defendant in a case brought against the Authority by Alwyn Petrus van Straten N.O. and
others on 12 March 2012 claiming a total amount of N$105 million. NAMFISA filed Exceptions to the Particulars of Claim prior to
31 March 2013. The Exceptions were heard on 8 October 2013 and were upheld in terms of the judgement and order of 31 January
2014. The Plaintiffs filed an Appeal against the judgement and order. At the date of issue of the financial statements the Appeal
was still pending and although it has technically lapsed the Plaintiffs may still apply for condonation and reinstatement. The High
Court must still formally dismiss the claim should the Plaintiffs not proceed with the appeal. NAMFISA intends to continue
contesting the claim and to apply for its dismissal.
Financial Statements
Financial Statements
Financial assets
The fair value of financial instruments are determined as follows:
• The fair value of financial assets and financial liabilities with standard terms and conditions traded on active liquid markets is
determined with reference to quoted market prices; and
• The fair value of other financial assets and financial liabilities (excluding derivative instruments) is determined in accordance
with generally accepted pricing models based on discounted cashflow analysis using prices from observable current market
transactions and dealer quotes for similar instruments.
153
GLOSSARY OF TERMS
A long-term insurance product or fund that provides single or modular payments to the holder at specified intervals, usually when retirement is reached or when the policyholder is disabled.
Available-for-sale financial assets: These are assets that can be disposed of at any time, e.g. Unit Trust, call deposit, etc.
Average annual growth: The aggregated growth recorded over a period of 12 months.
Beneficiary: A person or persons nominated by a policyholder to receive the benefits under the policy.
Cancellation notice: A written notice issued to cancel the licence of a registered entity or registered person.
Capital Adequacy Retirement (CAR): Excess capital required to be held by an insurer in order to be able to absorb losses.
Capital appreciation: An increase in the market value of an asset.
Closed Funds: Retirement funds whose membership enrolment is restricted, e.g. where a particular employer, profession, trade, industry, calling, association or union has established a fund exclusively for its employees or members.
Common Monetary Area (CMA): A country grouping consisting of South Africa, Namibia, Lesotho and Swaziland with a coordinated monetary policy, in which the currencies are pegged to the South African Rand (1:1).
Cooling-off period (microlending): A microlender must, in terms of the provisions of the agreement entered into with the borrower, allow the borrower to terminate the micro-loan agreement within a period of three business days after the date of signing the agreement and if the loan amount has been advanced, to simultaneously repay the loan amount advanced to the microlender. In such instances, the borrower is entitled to only pay pro rata charges at the annual finance charge rate applicable to the agreement and not the full charge.
Consent to judgement: When a debtor consents in writing to judgement in favour of the creditor of the amount of the debt and costs, in the event the debtor does not meet their obligation to the creditor.
Consolidation (microlending): Refers to the process of taking several outstanding debts and consolidate them into a single loan.
In other words, the borrower takes out a new loan and uses that loan to pay off his/ her other debts.
Credit life insurance: Credit life insurance can be defined as a term life-insurance policy, taken out on the life of the borrower with the
lender as beneficiary in order to pay off the borrower’s debt should he/ she pass away before full repayment of the
loan. The face value of a credit life insurance policy decreases proportionately with an outstanding loan amount
as the loan is paid off over time until both reach zero value.
Cross-border listed securities: Securities that are listed on different exchanges in two or more countries.
Debt instrument: A medium (e.g. loan) for raising money.
Defined Benefit Fund (DB Fund): A retirement fund where the benefits to be paid to the member at retirement is pre-determined and guaranteed.
Defined Contribution Fund (DB Fund): A retirement fund where the member receives the total of the employer as well as the employees’ contributions plus the investment earning.
Equity: An ownership interest possessed by shareholders in a company.
Exchange: An exchange is an infrastructure by which buyers and sellers of securities are brought together.
Exclusion clause (insurance): An exclusion is a provision within an insurance policy that eliminates coverage for certain acts, property, types of
damage or locations. An event or situation that is not included in an insurance agreement as something for which
the insurance company will pay money meaning insurers can legitimately turn claims down. An exclusion clause
is therefore a provision in an insurance policy that indicates what is denied coverage. For example, common exclusions are: hazards deemed so catastrophic in nature that they are uninsurable, such as war; wear and tear,
since they are expected through the use of a product; property covered by other insurance, in order to eliminate
duplication that would profit the insured.
Fraudulent non-disclosure: It is also referred to as fraudulent concealment or suppression of information. It means deliberate hiding, nondisclosure, or suppression of a material fact or circumstance (which one is legally or morally bound to reveal) with
intent to deceive or defraud in a contractual arrangement. Customers deliberately mislead the insurer if they
dishonestly provide information they know to be untrue or incomplete. If the dishonesty is intended to deceive
the insurer into giving them an advantage to which they are not entitled, then this is also a fraud and – strictly
speaking – the insurance premium does not have to be returned.
Funding ratio: The ratio of retirement fund’s assets to its liabilities.
Governments Payroll Deduction Code: Codes allocated to financial service providers by the Government enabling them to deduct premiums/ instalments
for financial services and products directly from the salaries of Government employees.
Gross contribution income: The total premium income received by an entity before any deduction.
Held-to-maturity Financial: Non-derivative financial assets with fixed or determinable payments and fixed maturities.
Indemnity Insurance: An insurance policy that aims to protect business owners and employees when they are found to be at fault for a
specific event such as misjudgement. Typical examples of indemnity insurance include professional insurance
policies such as malpractice insurance, and errors and omissions insurance, which indemnify professionals against claims made in the workplace.
Liquidity: The liability of an asset to be converted into cash quickly.
Glossary of terms
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Annuity: 155
Assets that are listed and traded on an exchange.
Secondary market: The market in which issued securities are traded by investors.
Listing: The placing of shares on the stock exchange so they can be traded.
Local index: The measure of the prices of security listed or quoted on the Namibian Stock Exchange.
Section 14 transfers: A transaction involving the amalgamation or transfer of any business carried on by a registered retirement fund with any business carried on by any other person.
Market Capitalisation: Market value of shares, i.e. amount of shares times (multiplied by) market price of shares.
Securities: Tradable assets such as shares, stock, debentures and bonds.
Market conduct standards: Promulgated standards of conduct that registered entities/ persons need to comply with.
S-referenced agents: Long-term insurance agents that are found guilty of non-compliance, e.g. fraud. These agents are not allowed to
operate in the industry.
Maturity value (investments): The amount that will be received at the time a security is redeemed at its maturity. For most securities, maturity
value equals par value.
Stock brokers: Registered members of an exchange who are permitted to buy and sell securities on behalf of the clients on the
stock exchange.
Merits of Claim:
In the legal context, merit refers to a claim that has a valid basis, setting forth sufficient facts from which the court
could find a valid claim of deprivation of a legal right.
Supervision: Supervision is the active analysis of the business of the registered entities by the Regulator to verify compliance.
Microlender: A person or entity providing small loans to the public based on specific requirements.
Surrender value (investments): The amount available in cash upon cancellation of a policy (in this case an investment policy), before it becomes
payable upon death or maturity.
National Payment System (NPS): A payment system to facilitate interbank clearing and settlement, resulting from various financial transactions
within a country or between countries and ensure the circulation of money within a country.
Umbrella Fund: A retirement fund in which different employers and/or members participate under different conditions.
Net premium income: The gross or total premium income earned by an insurer, less reinsurance outflow.
Unregistered Microlender: A person/ entity that conducts micro loan business without being registered with NAMFISA.
Non-disclosure of information (insurance): “Non-disclosure” refers to the situation where a customer fails to reveal a relevant fact when applying for – or
renewing – an insurance contract. It is widely recognised that in some situations involving non-disclosure, applying the strict legal position can result in an unduly harsh outcome for the customer. For this reason, when we deal with insurance cases involving non-disclosure or “misrepresentation” – an incorrect statement made by a
customer – we take account of both the law and good industry practice.
Vesting scales: The portion of the employer’s contribution that is paid to the member if the member ceases to be part of a retirement fund.
Voluntary deregistration: The deregistration of a registered entity at own request.
Waiting period (insurance): Waiting period is a time period that must expire before some legal right or remedy can be enjoyed or enforced. It
can also be defined as the required delay between the date of inception of a claim and the date on which the indemnity becomes payable,
In terms of health insurance a waiting period can be defined as a period of time specified in a health insurance policy that must pass before some or all of a health care coverage begins. Generally there are three types of waiting
periods such as employer waiting periods, affiliation periods and pre-existing condition exclusion periods. It’s the
period of time specified in a health insurance policy that must pass before some or all of the insured person’s
health care coverage can begin.
Cooling off period (insurance): It is a period of time (as specified in the policy terms and conditions, varying per insurer) during which a policyholder of a new insurance product may cancel the insurance policy contract secured directly or through an
intermediary in exchange of a refund in premium(s) paid (in other words without loss).
Yield: The annual rate of return on an investment, expressed as a percentage.
Glossary of terms
Open Funds: Retirement funds whose membership enrolment is not restricted to employer, industry, association, trade or
profession.
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Outstanding claims provision: A provision made for the estimated cost of claims that have occurred before the end of the accounting period but
have not been reported by that date.
Over the counter (OTC): A decentralised market of securities not listed on an exchange where market participants trade over the telephone,
facsimile or electronic network instead of a physical trading place or exchange.
Overall index: The measure of the process of all securities listed or quoted on the Namibian Stock Exchange.
Pension Fund: A long-term retirement saving plan where a member can draw up one third of their benefit at retirement, tax free,
while the remaining two thirds have to be used to pay a monthly/ quarterly/ annual pension.
Policy lapse: The policy of which all benefits to the policyholder cease and is terminated due to non-payment of premium amount on the due date or even after the grace period is called a lapsed policy.
Description: Excessive delay in payments and servicing of the policy leads to the policy being dead or lapsed. However, a lapsed
policy may be revived by fulfilling the terms and conditions as per the policy statement. To avoid losses to all parties, generally the revival and reinstatement is encouraged and facilitated.
Premiums written: A stream of income received from policyholders registered on the books of an insurer or reinsurer at the time a
policy is issued.
Premium Income: The income earned by an insurance company from premiums.
Preservation Fund: Any retirement fund (other than a pension fund, provident fund, benefit fund or retirement and annuity fund) that is established solely for the purpose of preserving any amount derived by the member form any pension fund
or provident fund.
Primary market: The market in which securities are initially issued and sold to investors.
Projected value (investments): The quantitative estimate of future economic or financial performance value.
Provident Fund: A retirement fund where a member can draw their entire benefit at retirement for a cash lump sum. One third of
the benefit is tax-free.
Prudential regulation: The supervision of the conduct of entities by setting down legal requirements to ensure the safety of policyholders’
funds as well as the soundness of the financial system.
Regulation: Reinsurance: A law, rule, or other order prescribed by the authorities to regulate conduct.
An insurance that an insurer buys for its own protection.
Reserve level: In medical aid funds, refer to the minimum accumulated funds expressed as percentage of gross annual
contributions.
Retirement Annuity Fund: Any retirement (other than a pension fund, provident fund or benefit fund) that is established solely for the purpose of providing life annuities for the members of the fund after retirement.
Retirement Fund: A fund established to provide retirement benefits to members.
Risk transfer fees/ arrangement: In medical aid fund, a contractual arrangement where a third party undertakes to indemnify a medical aid fund
against all or part of the loss that such a medical aid fund may suffer as a result of carrying on the business of a
medical aid fund.
Glossary of terms
Listed securities: 157
158
“AMLAC”
means anti-money laundering advisor council.
“accountable institution” means a person or institution referred to in Schedule 1 of FIA, including branches, associates or subsidiaries
outside of that person or institution and a person employed or contracted by such person or institution;
“beneficial owner” means (a) a natural person who owns or effectively controls a client, including the natural person on whose behalf a
transaction is conducted; or
(b) a natural person who exercises effective control over a legal person or trust, and a natural person is deemed to
own or effectively control a client when the person (i) owns or controls, directly or indirectly, including through trusts or bearer share holdings for any legal person,
20% or more of the shares or voting rights of the entity;
(ii) together with a connected person owns or controls, directly or indirectly, including through trusts or bearer
share holdings for any legal person, 20% or more of the shares or voting rights of the entity;
(iii) despite a less than 20% shareholding or voting rights, receives a large percentage of the person’s declared
dividends; or
(iv) otherwise exercises control over the management of the person in his other capacity as executive officer, nonexecutive director, independent on-executive director, director, manager or partner.
“business relationship” means an arrangement between a client and an accountable or reporting institution for the purpose of concluding
transactions on a regular basis.
“cash” means (a) coin and paper money of Namibia or of another country which coin or paper money is designated as
legal tender and which circulates as, and is customarily used and accepted as, a medium of exchange in the
country of issue;
(b) travellers’ cheques;
(c) cheques, but only in respect of payments made by a person who carries on the business of a casino, gambling; or
(d) payment instrument, but only in respect of stored value.
“client”
means a person who has entered into a business relationship or a single transaction with an accountable or
reporting institution, and the word “customer” has a corresponding meaning.
“competent authority”
Key persons:
with respect to a legal person or trust, includes a director, controlling officer, principal officer, partner or any person who is concerned with the management of its affairs.
“legal persons”
Legal persons refers to any entities other than natural persons that can establish a permanent customer relationship
with a financial institution or otherwise own property. This can include companies, bodies corporate, foundations,
partnerships, or associations and other relevantly similar entities.
“money laundering” or
“money laundering activity” means (a) the act of a person who (i) engages, directly or indirectly, in a transaction that involves proceeds of any unlawful activity;
(ii) acquires, possesses or uses or removes from or brings into Namibia proceeds of any unlawful activity; or
(iii) conceals, disguises or impedes the establishment of the true nature, origin, location, movement, disposition,
title of, rights with respect to, or ownership of, proceeds of any unlawful activity; where (aa) as may be inferred from objective factual circumstances, the person knows or has reason to believe, that the
property is proceeds from any unlawful activity; or
(bb) in respect of the conduct of a person, the person without reasonable excuse fails to take reasonable steps to
ascertain whether or not the property is proceeds from any unlawful activity.
(b) any activity that constitutes an offence as defined in section 4, 5 or 6 of the Prevention of Organised Crime Act.
“NAMFISA”
Namibia Financial Institutions Supervisory Authority
“person”
means a natural or legal person.
“Prevention of Organised Crime Act (POCA)” means the Prevention of Organised Crime Act, 2004 (Act No. 29 of 2004).
“Politically Exposed Persons (PEPs)”
Foreign PEPs are individuals who are or have been entrusted with prominent public functions by a foreign
country,for example Heads of State or of government, senior politicians, senior government, judicial or military
officials, senior executives of state owned corporations, important political party officials.
“proceeds of unlawful activities” has the meaning attributed to that term in section 1 of the Prevention of Organised Crime Act.
means any supervisory, the Namibian Police Force, the Anti-Corruption Commission, the Namibia Central
Intelligence Service, the Prosecutor-General, the Centre and any other authority that may, in terms of any law,
investigate unlawful activities.
“property”
has the meaning attributed to that term in section 1 of the Prevention of Organised Crime Act.
“prospective client”
means a person seeking to conclude a business relationship or a single transaction with an Accountable institution.
“customer due diligence”
means a process which involves establishing the identity of a client, the identity of the client’s beneficial owners in
respect of legal persons and monitoring all transactions of the client against the client’s profile.
“records”
means any material on which information is recorded or marked and which is capable of being read or understood
by a person, or by an electronic system or other device.
“establish identity”
means a two-tier process consisting of ascertainment or collecting of certain identification information, and
verification of some of the information against reliable documentation or information.
“regulatory body” means a functionary or institution set out in Schedule 4 of FIA.
“financial institution means”
(a) a registered beneficiary fund;
(b) a registered central securities depository;
(c) a collective investment scheme of a registered manager;
(d) a registered exchange;
(e) a registered friendly society;
(f) a registered insurer;
(g) a registered medical aid fund;
(h) a registered reinsurer;
(i) a registered retirement fund;
(j) a registered securities clearing house; and
(k) an entity declared by the Minister to be a financial institution by notice published in the Gazette.
“reporting institutions” means a person or institution set out in Schedule 3 of FIA.
“risk”
all references to risk refer to the risk of money laundering and/ or terrorist financing. This term should be read in
conjunction with the Interpretive Note to Recommendation 1.
“financial services laws means”
Glossary of terms
Glossary of terms
The following definitions only relate to Anti Money Laundering (AML) and Combating Financing of Terrorism (CFT), an area under
Supervisory Support Division that the Authority introduced a few years ago:
“risk clients” means any person, natural or legal whose activities pose a risk for money laundering or financing of terrorism
activities.
“risk management systems” means policies, procedures and controls that enables an accountable institution to establish the risk indicators used to characterise clients, products and services to different categories of risk (low, medium or high risk) with the aim of applying proportionate mitigating measures in relation to the potential risk of money laundering or
terrorist financing in each category of risk established.
(a) the FIM Bill;
(b) the Public Accountants and Auditors Act;
(c) the Financial Intelligence Act;
(d) the Financial Services Ombudsman Act;
(e) the NAMFISA Act; or
(f) a law that declares itself to be a financial services law for the purposes of this definition.
“senior management” with respect to a legal person or trust, includes a director, controlling officer, partner or any person who is
concerned with the management of its affairs.
“single transaction” means a transaction other than a transaction concluded in the course of a business relationship.
“supervisory body” means a functionary or institution set out in Schedule 2 of FIA.
“financing of terrorism” has the meaning ascribed to it by an Act of the Parliament of the Republic of Namibia which criminalises the
conduct of terrorist financing and includes acts which is aimed at directly or indirectly providing or collecting
funds with the intention that such funds should be used, or with the knowledge that such funds are to be used, in
full or in part, to carry out any act of terrorism as defined in the Organisation for African Unity (OAU) Convention on the Prevention and Combating of Terrorism of 1999, irrespective of whether or not the funds are
actually used for such purpose or to carry out such acts.
“transaction”
means a transaction concluded between a client and an accountable or reporting institution in accordance with
the type of business carried on by that institution, and includes attempted transactions.
“Funds”
refers to assets of every kind, whether corporeal or incorporeal, tangible or intangible, movable or
immovable, however acquired, and legal documents or instruments in any form, including electronic or digital,
evidencing title to, or interest in, such assets. Funds or other assets.
“Terrorist”
the term terrorist refers to any natural person who:
(i) commits, or attempts to commit, terrorist acts by any means, directly or indirectly, unlawfully and wilfully;
(ii) participates as an accomplice in terrorist acts;
(iii) organises or directs others to commit terrorist acts; or (iv) contributes to the commission of terrorist acts
by a group of persons acting with a common purpose where the contribution is made intentionally and with the
aim of furthering the terrorist act or with the knowledge of the intention of the group to commit a terrorist act.
“FIC”
Financial Intelligence Centre
Terrorist financing:
is the financing of terrorist acts, and of terrorists and terrorist organisations.
“FIA”
Financial Intelligence Act of 2012
“unlawful activity” has the meaning assigned to it in section 1 of the Prevention of Organised Crime Act.
“Government”
means the Government of the Republic of Namibia.
“investigating authority” means an authority that in terms of legislation may investigate unlawful activities.
“ identification data”
refers to reliable, independent source documents, data or information.
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CONTACT DETAILS:
Call: 0800 290 5000 | SMS: 3030 (normal charges apply)
Write: PO Box 21250, Windhoek
E-mail: [email protected]
Visit: 2nd Floor, Sanlam Centre
154 Independence Avenue
Windhoek