A clause in the Financial Institutions and Markets Act (FIMA) aims to protect beneficiaries of insurance policies by requiring insurers to maintain a minimum coverage of N$200,000, regardless of any claims made by banks or creditors, an official has said.
The Namibia Financial Institutions Supervisory Authority (NAMFISA) Policy Advisor Irene Shebo said the new rule will ensure that beneficiaries receive a minimum payout of N$200,000 from their insurance policies.
“There is no specific benchmark [that] exists for such protections, and this measure is designed to ensure that beneficiaries are not left with nothing if creditors claim the policy value,” she said.
“When you take out any policy and nominate a beneficiary, the insurance payment typically goes to that beneficiary upon your death. However, if you have used the policy as collateral for a mortgage or other debt, things can get a bit complicated. For example, if your policy was worth N$1 million and you owed N$1 million on your mortgage, the bank could claim the entire amount from the policy upon your death,” Shebo added.
She said other benefits of the Act include protecting consumers by preventing coerced insurance purchases and providing a 30-day “cooling-off” period for policy cancellations.
“The new regulations include limiting brokers to commission-only pay, and banning them from owning interests in insurance companies, and insurers cannot reject claims based on pre-existing conditions disclosed at the time of purchase,” she said.
FIMA is set to regulate and supervise several sectors, including insurance companies, agents, and brokers; financial markets; collective investment schemes; retirement funds; and friendly societies.
Furthermore, FIMA will also regulate medical aid funds; fund and society administrators; and property held in a trust.
NAMFISA CEO Kenneth Matomola noted that the date on which FIMA will come into operation will be communicated to the public at the appropriate time by the Minister of Finance.
“Our goal is to ensure that we are all aligned and working together towards the same objectives. If there are any issues with FIMA, let’s address them openly and continue our progress. I am very optimistic about the implementation of FIMA and will continue to advocate for it because I firmly believe in its benefits,” he said.
