Medical aid administrators have warned that more than 550,000 Namibians are at risk of losing access to private healthcare services if the proposed Financial Institutions and Markets Act (FIMA) Outsourcing Standard is implemented in its current form.
In a joint letter addressed to Namibia Financial Institutions Supervisory Authority (NAMFISA) Chief Executive Officer Kenneth Matomola, the administrators said the restrictions could destabilise the fund administration industry, cause job losses, and limit access to essential healthcare.
The letter was signed by METHEALTH Namibia Administrators, Prosperity Health, Medscheme Namibia Administrators, Clinico Health Group, and Paramount Health.
The concerns centre on the FIMA Act of 2021, specifically Standard GEN.S.10.10, which allows financial institutions to outsource material business functions but prohibits outsourcing principal activities such as claims assessment, healthcare payments, and governance for medical aid funds.
The administrators warned that this prohibition threatens the operational and financial viability of the sector.
They stated that these core functions are “the backbone of fund administrators’ core business activities,” and restricting them could force many administrators out of the market.
The letter further cautioned that removing key revenue-generating functions would make it impossible to sustain operations, including staff salaries and the maintenance of systems built over three decades.
“The collapse of these services would disrupt claims processing and benefit payments for 550,000 Namibians and negatively affect dependent industries such as information technology, courier services, and call centres,” the administrators said.
The industry currently employs about 515 people across Namibia, and potential job losses could create widespread socio-economic hardship affecting thousands of dependants.
The letter also warned that smaller employer-based medical aid funds could become unsustainable, leading to consolidation or closure and reducing access to affordable healthcare.
The administrators added that splitting core processes among multiple service providers would heighten operational risks and jeopardise the confidentiality of personal health data.
They argued that FIMA already requires fund boards and administrators to maintain robust governance and risk controls, making a blanket outsourcing ban unnecessary. They further noted that the proposed restrictions are “not aligned with regional or international regulatory frameworks,” where outsourcing to regulated administrators is permitted under risk-based oversight.
The administrators urged NAMFISA to adopt a balanced, risk-based approach that safeguards financial stability, protects employment, and maintains access to healthcare. They stressed their commitment to working collaboratively with the regulator and other stakeholders.
The letter was copied to Minister of Finance and Public Enterprises Ericah Shafudah and National Union of Namibian Workers (NUNW) Secretary General Job Munjaro, and signed by the Chief Executive Officers and Managing Directors of the five medical aid administration firms.
Similar concerns were previously raised by several major players in Namibia’s financial sector, who warned that the proposed outsourcing standard could increase operational costs, reduce competitiveness, and restrict access to specialised skills.
They also argued that certain provisions in the regulation lack clarity, particularly in defining principal and material functions, which could delay approval processes and create inefficiencies.
Industry representatives further cautioned that the rules overlook practical business realities, as many institutions already perform administrative and investment functions within group structures to enhance efficiency and reduce risk.
They recommended that NAMFISA consider a flexible, risk-based framework that allows regulated outsourcing under clearly defined conditions, supported by transitional arrangements to maintain stability and competitiveness.
