Financial Institutions and Markets Act, 2021

Act 2 of 2021

Uncommenced

This Act has not yet come into force.

Citation: Act 2 of 2021
Date: 1 October 2021
Language: English
Type: Act

Financial Institutions and Markets Act, 2021

Act 2 of 2021

Published in Government Gazette 7645 on 1 October 2021
Assented to on 11 June 2021
Not commenced
[This is the version of this document from 1 October 2021 and includes any amendments published up to 23 August 2024.]

ACTTo consolidate and harmonise the laws regulating financial institutions, financial intermediaries and financial markets in Namibia; and to provide for incidental matters.BE IT ENACTED as passed by the Parliament, and assented to by the President, of the Republic of Namibia as follows:-

Chapter 1
PRELIMINARY

1. General definitions

(1)In this Act, unless the context indicates otherwise or the expression is specifically defined in another Chapter of this Act—"actuary" means a person who is a fellow of an actuarial society, institute or faculty specified in the standards;"Adjudicator" means the Financial Services Adjudicator as defined in section 1 of the Financial Services Adjudicator Act, 2019 (Act No. of 2019), and includes a Deputy Adjudicator and an ad-hoc Adjudicator as defined in that section;"advisory committee" means the advisory committee established under section 20 of the NAMFISA Act;"affiliate", in relation to a company or other entity, means—

(a)a subsidiary of that company or other entity;

(b)the holding company of that company or other entity; or

(c)another company or other entity that has the same holding company as that company or other entity;

"Appeal Board" means the appeal board established by section 39 of the NAMFISA Act;"articles" means the articles of association of a company as defined in section 1 of the Companies Act;"associate"

(a)in relation to an individual means—

(i)the spouse of that individual;

(ii)the child, parent, stepchild, stepparent or sibling of the individual and the spouse of any that individual;

(iii)another person who has entered into an agreement or arrangement with that individual relating to the acquisition, holding or disposal of, or the exercise of voting rights in respect of, shares or other ownership interests in an entity;

(iv)a corporate body or other juristic person or unincorporated entity controlled, directly or indirectly, by, or the affairs or part of the affairs of which are managed or administered by, or at the direction or instructions of, that individual or any person referred to in subparagraph (i) or (ii); and

(v)a trust controlled by that individual; and

(b)in relation to a corporate body, other juristic person or other unincorporated entity means—

(i)any entity which is controlled, directly or indirectly, by, or the affairs or part of the affairs of which are managed or administered by, or at the direction or instructions of, that corporate body, juristic person or unincorporated entity;

(ii)any entity—

(aa)which controls, directly or indirectly, that corporate body, juristic person or unincorporated entity;

(bb)which manages or administers the affairs or part of the affairs of that corporate body, juristic person or entity; or

(cc)on whose directions or instructions the affairs or part of the affairs of that corporate body, juristic person or entity are managed or administered; or

(iii)a participating employer, where the corporate body, juristic person or unincorporated entity is a retirement fund;

"auditor" means a person registered as an accountant and auditor under section 23 of the Public Accountants and Auditors Act, and who has been admitted as a member of the Institute of Chartered Accountants of Namibia referred to in that Act;"Bank of Namibia" means the Bank of Namibia established under the Bank of Namibia Act, 2021 (Act No. 1 of 2021);"banking institution" means a banking institution as defined in section 1 of the Banking Institutions Act, 1998 (Act No. 2 of 1998);"beneficiary fund" means a beneficiary fund as defined in section 249;"board" means the board of directors of a corporate body and, unless the context indicates otherwise, the board of trustees of a retirement fund, the board of trustees of a friendly society, the board of trustees of a medical aid fund and any similar body of persons in relation to any such fund or any other entity;"building society" means a building society as defined in section 1 of the Building Societies Act, 1986 (Act No. 2 of 1986);"central securities depository" means a central securities depository as defined in section 78;"client" means a specific person or group of persons, excluding the general public, who is or may become the subject to whom a financial service is rendered intentionally, or is the successor in title of such person or the beneficiary of such service;"close corporation" means a corporation incorporated under the Close Corporations Act, 1988 (Act No. 26 of 1988);"collective investment scheme" means a collective investment scheme as defined in section 168;"Companies Act" means the Companies Act, 2004 (Act No. 28 of 2004);"company" means a corporate body incorporated under the Companies Act, and includes a public company;"corporate body" means an incorporated body wherever or however incorporated, and includes a company and a close corporation;"court" means any court or courts of Namibia having jurisdiction in the particular matter or in the particular circumstances;"director" means a natural person who—

(a)in relation to a corporate body, occupies the position of director, by whatever name called, of the corporate body, and "board of directors" or "directors" refers to the directors as a body; or

(b)in relation to any juristic person or other unincorporated entity, occupies a position that is the same or similar to that of a person referred to in paragraph (a);

"document" or "record" includes books, accounts and any information stored or recorded electronically, digitally, photographically, magnetically, mechanically, optically or in any other form;"entity" means a corporate body, any other juristic person, a trust, partnership, fund, association, joint venture and any other unincorporated organisation, the government of any country or any subdivision of that government or country;"exchange" means an exchange as defined in section 78;"fee" means an appropriate fee determined by NAMFISA under section 415 or under section 33 of the NAMFISA Act;"financial advice" means any financial advice as described in subsection (2);"financial crime" means any of the following:

(a)an offence that involves theft, fraud, forgery or uttering a forged document, perjury or an offence under the Anti-Corruption Act, 2003 (Act No. 8 of 2003);

(b)crimes relating to market abuse provided for in Part 9 of Chapter 3;

(c)financing, facilitating or being involved in financing or facilitating an offence relating to a financial institution;

(d)dealing with the proceeds of an offence, whether or not related to a financial institution;

(e)an offence under the Prevention of Organised Crime Act, 2004 (Act No. 29 of 2004);

(f)the funding of, or any offence relating to the funding of, terrorism under the Prevention and Combating of Terrorist and Proliferation Activities Act, 2014 (Act No. 4 of 2014); or

(g)any offence under the Financial Intelligence Act, 2012 (Act No. 13 of 2012);

"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)any person or entity declared by the Minister by a notice under subsection (5)(a) to be a financial institution;

"financial intermediary" means a person who receives compensation, directly or indirectly, for providing a financial service, and—

(a)for the purposes of Chapter 2 on Insurance and as defined in section 53 includes—

(i)an insurance agent, including a corporate insurance agent;

(ii)an insurance broker, including a corporate insurance broker;

(b)for the purposes of Chapter 3 on Financial Markets and as defined in section 78 includes—

(i)an authorised user of an exchange;

(ii)an authorised representative of an authorised user;

(iii)a nominee of an authorised user;

(iv)a stockbroker;

(v)an investment manager;

(vi)a linked investment service provider;

(vii)a portfolio manager of an investment manager;

(viii)a portfolio manager of a linked investment service provider;

(ix)a securities advisor;

(x)an authorised advisor of a securities advisor;

(xi)a securities dealer;

(xii)an authorised representative of a securities dealer;

(xiii)a participant;

(xiv)a nominee of a participant;

(xv)a securities rating agency;

(c)for the purposes of Chapter 4 on Collective Investment Schemes and as defined in section 168 includes—

(i)a manager of a collective investment scheme;

(ii)an authorised representative of a manager;

(iii)a designated representative of an authorised representative;

(iv)a nominee company;

(v)a trustee or custodian;

(d)for the purposes of Chapter 5 on Retirement Funds, includes a fund administrator;

(e)for the purposes of Chapter 6 on Friendly Societies, includes a society administrator and an individual or entity that controls the affairs of a friendly society;

(f)for the purposes of Chapter 7 on Medical Aid Funds includes—

(i)a fund administrator;

(ii)a medical aid fund broker as defined in section 321; and

(g)includes a person or entity declared by the Minister by notice under subsection (5)(b) to be a financial intermediary;

"financial product" means—

(a)a policy issued by an insurer or a reinsurer pursuant to Chapter 2;

(b)a benefit provided by—

(i)a retirement fund or a beneficiary fund pursuant to Chapter 5;

(ii)a friendly society pursuant to Chapter 6; or

(iii)a medical aid fund to the members of the medical aid fund by virtue of membership pursuant to Chapter 7;

(c)a security, derivative instrument, money market instrument or other instrument referred to in Chapter 3;

(d)a participatory interest in a collective investment scheme;

(e)a foreign currency denominated investment instrument;

(f)any other product essentially similar in nature and character to a financial product referred to in paragraphs (a) to (e);

(g)any product combining two or more of the financial products referred to in paragraphs (a) to (f); or

(h)any product issued by a foreign entity and marketed in Namibia, which in nature and character is essentially similar or corresponding to a financial product referred to in paragraphs (a) to (g);

"financial service" means—

(a)the service of providing a financial product or financial advice; or

(b)a service determined by NAMFISA after consultation with the advisory committee by notice under subsection (4)(a) to be a financial service;but does not include—

(i)the collection or accounting by a banking institution of premiums or other moneys payable by a client to a financial institution or financial intermediary in respect of a financial service, where the banking institution acts merely as a conduit between a client and the financial institution or financial intermediary; or

(ii)any other service exempted from the provisions of this Act by NAMFISA, by notice under subsection (4)(b);

"financial services law" means—

(a)this Act;

(b)the Public Accountants’ and Auditors’ Act;

(c)the Financial Intelligence Act, 2012 (Act No. 13 of 2012);

(d)the Financial Services Adjudicator Act, 2019 (Act No. of 2019);

(e)the Microlending Act, 2018 (Act No. 7 of 2018);

(f)the NAMFISA Act;

(g)a law that declares itself to be a financial services law for the purposes of this Act; or

(h)a law declared by the Minister by notice under subsection (5)(c) to be a financial services law,

and includes regulations, standards, and other subordinate measures made or issued under any of those laws;"financial year", in relation to a financial institution or financial intermediary, means each period not exceeding 12 months, at the end of which the annual financial statements of the financial institution or financial intermediary are prepared in accordance with the standards;"foreign entity" means an entity incorporated or formed under the laws of a country other than Namibia;"friendly society" means a friendly society as defined in section 284;"fund administrator", in relation to—

(a)a retirement fund, means a fund administrator as defined in section 363; and

(b)a medical aid fund, means a fund administrator as defined in section 363;

"generally accepted accounting practice" means the accounting frameworks adopted by the Institute of Chartered Accountants of Namibia referred to in section 1 of the Public Accountants’ and Auditors’Act;"High Court" means the High Court of Namibia referred to in Article 78(1)(b) of the Namibian Constitution or any judge of that court;"holding company" means a holding company as described in section 1(6) of the Companies Act;"Income Tax Act" means the Income Tax Act, 1981 (Act No. 24 of 1981);"industry association" means a voluntary organisation representing the interests of a group of similar financial institutions or financial intermediaries;"Insolvency Act" means the Insolvency Act, 1936 (Act No. 24 of 1936);"inspector" means a person appointed as an inspector under section 419;"insurer" means an insurer as defined in section 4;"International Auditing Standards" mean the most recent version of the International Standards on Auditing published by the International Auditing Standards Board, as adopted by the Institute of Chartered Accountants of Namibia referred to in section 1 of the Public Accountants’ and Auditors’Act;"legal practitioner" means a legal practitioner, including a candidate legal practitioner, referred to in section 1 of the Legal Practitioners Act, 1995 (Act No. 15 of 1995);"medical aid fund" means a medical aid fund as defined in section 321;"memorandum" means a memorandum as defined in section 1 of the Companies Act;"Minister" means the Minister responsible for finance;"NAMFISA" means the Namibia Financial Institutions Supervisory Authority referred to in section 2 of the NAMFISA Act;"NAMFISA Act" means the Namibia Financial Institutions Supervisory Authority Act, 2021 (Act No. 3 of 2021);"objects of NAMFISA" means the objects of NAMFISA set out in section 3 of the NAMFISA Act;"officer", in relation to—

(a)a corporate body, means any natural person who is designated as an officer by the board of directors of that corporate body; and

(b)any other juristic person or other unincorporated entity, means any natural person who is designated as an officer by the board, members or owners of the entity,and includes—

(i)the members of the board, the principal officer, the person responsible for compliance and the person responsible for finance and investment; and

(ii)any other natural person designated as an officer by NAMFISA by written directive issued to the corporate body or other juristic person, or other unincorporated entity, or a group or class of natural persons designated as officers by NAMFISA by notice under subsection (4)(c);

"permanent resident" means a person who is in possession of a permanent residence permit issued to him or her in terms of section 26 of the Immigration Control Act, 1993 (Act No. 7 of 1993);"prescribed" means prescribed by the Minister under this Act;"principal office" means—

(a)in the case of an entity that is a financial institution or financial intermediary, the main place of business of that entity;

(b)in the case of an individual financial intermediary who is employed by a financial institution or by another financial intermediary, the main place of business of that financial institution or other financial intermediary; and

(c)in the case of an individual financial intermediary who is not employed by a financial institution or by another financial intermediary, the main place of business of that individual;

"principal officer" means the officer of a financial institution, financial intermediary or of the manager of a collective investment scheme appointed as principal officer who—

(a)must be—

(i)the chief executive officer of the financial institution, financial intermediary or of the manager of a collective investment scheme and have the duties and the functions of a chief executive officer; or

(ii)the officer having the duties and functions normally exercised by a chief executive officer; and

(b)must be the officer who is responsible for reporting to the board of directors, board of trustees or other board on behalf of the management of the financial institution, financial intermediary or manager of a collective investment scheme,

and in the case of a financial intermediary that is a natural person, that person is deemed to be the principal officer of that financial intermediary;"Public Accountants’ and Auditors’ Act" means the Public Accountants’ and Auditors’ Act, 1951 (Act No. 51 of 1951);"public company" means a public company referred to in section 20 of the Companies Act;"registered" means registered under this Act;"regulations" means regulations made by the Minister under this Act;"reinsurer" means a reinsurer as defined in section 4;"retirement fund" means a retirement fund as defined in section 249;"securities clearing house" means a securities clearing house as defined in section 78;"self-regulatory organisation" means a self-regulatory organisation as defined in section 78 or a representative self-regulatory organisation referred to in section 432;"society administrator" means a society administrator as defined in section 363;"spouse" means—

(a)a partner in a marriage solemnised in terms of the law of Namibia or of any foreign country;

(b)a common law partner in a union recognised in common law as a life-time cohabitation arrangement;

(c)a partner in a customary union according to customary law or custom;

(d)a partner in a union recognised as a marriage under the tenets of any religion; or

(e)a partner in a relationship in which the parties live together in a manner resembling a marital partnership or customary union;

"standards" means the standards issued by NAMFISA under this Act;"statutory manager" means a person appointed as a statutory manager for a financial institution under section 443;"subsidiary" means a subsidiary of another company as described in section 1(3) of the Companies Act;"this Act" includes—

(a)regulations made, or other subordinate measures made or issued by the Minister, under this Act; and

(b)standards and other subordinate measures issued by NAMFISA under this Act;

"Trust Moneys Protection Act" means the Trust Moneys Protection Act, 1934 (Act No 34 of 1934);"trust property" means any corporeal or incorporeal movable or immovable asset invested, held, kept in safe custody, controlled, administered or alienated by any person on behalf of another person;"undesirable practice", in relation to any practice or manner of conducting business of a financial institution or financial intermediary or the provision of a financial service, means a practice determined under section 407 to be an undesirable practice in relation to that financial institution, financial intermediary or financial service;"valuator" means an actuary or an expert who is a member of a category of professions or persons specified in the standards, appointed or retained as a valuator by a financial institution or financial intermediary or required by NAMFISA to make a valuation report with respect to a financial institution or financial intermediary; and"wholly owned subsidiary" means a wholly owned subsidiary or another company as described in section 1(7) the Companies Act.

(2)Subject to subsection (3), for purposes of this Act, financial advice includes—

(a)any recommendation, guidance, projection or proposal relating to a financial product furnished by any means or medium, to any person who is a client, potential client, or group of clients or potential clients, whether or not specifically sought by that person or group, and irrespective of whether or not such advice results in a transaction being effected—

(i)in respect of buying, selling, handling or exchanging a security;

(ii)in respect of purchasing any other financial product;

(iii)in respect of investing in any financial product; or

(iv)in respect of the variation of any term or condition applying to a financial product or the replacement of a financial product or the termination of any purchase of or investment in a financial product;

(b)insurance advice as defined in section 4; and

(c)securities advice as defined in section 78.

(3)Despite subsection (2), financial advice does not include—

(a)factual information given merely—

(i)on the procedure for entering into a transaction in respect of a financial product;

(ii)in relation to a description of a financial product;

(iii)in answer to routine administrative enquiries;

(iv)in the form of objective information about a particular financial product including information regarding the tax treatment of a particular financial product;

(v)by the display or distribution of promotional material; or

(vi)by way of an analysis or report on a financial product without any express or implied recommendation, guidance or proposal that any particular transaction in respect of the financial product is appropriate to the particular investment objectives, financial situation or particular needs of a client; or

(b)advice given by—

(i)the board or any board member of a retirement fund or by a friendly society to the members of the fund or society on benefits enjoyed or to be enjoyed by those members;

(ii)the board of trustees or any board member of a medical aid fund to the members of the medical aid fund, on health care benefits enjoyed or to be enjoyed by those members;

(iii)a member of a professional association, including without limitation, a legal practitioner or an auditor or actuary, where the advice is for tax purposes or ancillary to some other advice that is not financial advice; or

(c)any other advisory activity exempted from the provisions of this Act by NAMFISA, by notice under subsection (4)(d).

(4)NAMFISA may, for the purposes of—

(a)paragraph (b) of the definition of "financial service", after consultation with the advisory committee, by notice in the Gazette determine any service to be a financial service;

(b)subparagraph (ii) of the definition of "financial service", by notice in the Gazette exempt any service from the application of the provisions of this Act;

(c)subparagraph (ii) of the definition of "officer", by notice in the Gazette designate a group or class of natural persons as officers; and

(d)subsection (3)(c), by notice in the Gazette, exempt any advisory activity from the application of the provisions of this Act.

(5)The Minister may, for the purposes of—

(a)paragraph (k) of the definition of "financial institution", by notice in the Gazette declare any person or entity to be a financial institution;

(b)paragraph (g) of the definition of "financial intermediary", by notice in the Gazette declare any person or entity to be a financial intermediary; and

(c)paragraph (h) of the definition of "financial services law", by notice in the Gazette declare any law to be a financial services law.

(6)NAMFISA may issue standards, guidelines, bulletins, rules, directives or other subordinate measures or take any other measures that NAMFISA is authorised or has been authorised to issue or take under this Act or the NAMFISA Act in order to give effect to any action that NAMFISA has taken under subsection (4) or the Minister has taken under subsection (5).

(7)The Minister may make regulations, issue other subordinate legislation or measures or take other measures that the Minister is authorised to issue or take under this Act or the NAMFISA Act in order to give effect to any action that NAMFISA has taken under subsection (4) or the Minister has taken under subsection (5).

2. Objects of Act

The objects of this Act are to foster—

(a)the financial soundness of financial institutions and financial intermediaries;

(b)the stability of the financial institutions and markets sector;

(c)the highest standards of conduct of business by financial institutions and financial intermediaries;

(d)the fairness, efficiency and orderliness of the financial institutions and markets sector;

(e)the protection of consumers of financial services;

(f)the promotion of public awareness and understanding of financial institutions and financial intermediaries; and

(g)the reduction and deterrence of financial crime.

3. Control over corporate bodies

(1)For the purposes of this Act, each of the following is considered as having control over a corporate body or other entity—

(a)in the case of a corporate body—

(i)a person that has the power to appoint a director or member of the board of directors;

(ii)a person whose consent is needed for the appointment of a director or member of the board of directors;

(iii)a person that, either alone or with one or more associates, holds 20% or more of the voting rights attached to shares or other securities in the corporate body; and

(iv)a person that, either alone or with one or more associates, has the power to control 20% or more of the voting rights attached to shares or other securities in the corporate body; and

(b)in the case of an entity that is not a corporate body, a person who is in a position to control or influence in essentially the same measure as a person referred to in paragraph (a), the business or financial operations of the entity.

(2)For the purposes of this Act, a person referred to in any provision of subsection(1)(a) who is considered as having control over a corporate body is also considered as having control over any subsidiary of that corporate body.

(3)Where a corporate body is a financial institution, for the purposes of subsection (1)(a)(iii) or (iv), the Minister may by notice in the Gazette determine a lower percentage than 20%, to apply either generally or to a class of financial institutions.

(4)NAMFISA may in a particular case determine that a person does or does not control a financial institution, subject to such terms and conditions as may be specified in such determination.

(5)NAMFISA may not make a determination that a person controls a financial institution pursuant to subsection (4) unless—

(a)the person has been given notice of the proposed determination and a reasonable opportunity to make representations to NAMFISA on the matter; and

(b)NAMFISA is satisfied that the person is in a position to control or influence the business or financial operations of the financial institution in essentially the same measure as a person referred to in subsection (1)(a).

Chapter 2
INSURANCE

Part 1 – GENERAL

4. Definitions for this Chapter

(1)In this Chapter, unless the context indicates otherwise—"actuarial basis", in relation to a policy, means the underlying actuarial rules, specifications and formulae, approved by the valuator of the registered insurer or reinsurer, in terms of which a policy operates and is executed as contemplated by this Act;"capital adequacy requirement" means an amount which a registered insurer or reinsurer is required to have continuously in accordance with the requirements of the standards;"class of insurance" means a class or classes of insurance described in section 8, and a reference in this Act to a particular class of insurance is a reference to the insurance of risks falling within that particular class determined in accordance with section 8;"domestic policy" means a policy issued in Namibia and which is payable in Namibia in the currency of Namibia, and, in the case of a long-term policy, includes a policy which was issued—

(a)on or after March 21, 1990 but before July 1, 1998, other than such a policy in respect of which the policyholder has in writing requested the registered insurer concerned that it must not be made payable in Namibia in the currency of Namibia; or

(b)before March 21, 1990 and which the policyholder has not requested that the policy be made payable outside Namibia in a currency other than that of Namibia or the policyholder has specifically made the policy to be payable in Namibia in Namibian currency;

"due date", in relation to—

(a)a premium, means—

(i)in the case of a new policy, the inception date of the policy;

(ii)in the case of an existing policy which has been renewed, the renewal date of the policy; and

(iii)in the case of any extension of, or other change to, an existing policy, the inception date of such extension or other change; and

(b)an instalment of a premium, means the commencement date of the period in respect of which the instalment is payable;

"foreign insurer" means a foreign entity that is authorised by or under the laws of a country other than Namibia to carry on the business of insurance in that country or in another country;"foreign reinsurer" means a foreign reinsurer that is authorised by or under the laws of a country other than Namibia to carry on reinsurance business in that country or in another country;"gap insurance" means gap insurance as defined in the regulations;"insurance" means long-term insurance or short-term insurance, and includes micro-insurance;"insurance advice" means any recommendation, guidance, projection or proposal on insurance furnished by any means or medium, to any person who is a client, potential client or policyholder or group of clients, potential clients or policyholders, whether or not specifically sought by that person or group, and irrespective of whether or not such advice results in a transaction being effected in respect of insurance but does not include—

(a)factual information given merely—

(i)on the procedure for entering into a transaction in respect of insurance;

(ii)in relation to the description of an insurance product;

(iii)in answer to routine administrative enquiries;

(iv)in the form of objective information about a particular insurance product, including information regarding the tax treatment of a particular insurance product;

(v)by the display or distribution of promotional material; or

(vi)by way of an analysis or report on insurance without any express or implied recommendation, guidance or proposal that any particular transaction in respect of insurance is appropriate to the particular insurance or investment objectives, financial situation or particular needs of a client;

(b)advice given by a member of a professional association, including without limitation, a legal practitioner or an auditor or actuary, where the advice is for tax purposes or ancillary to some other advice that is not insurance advice; or

(c)any other advisory activity exempted from the provisions of this Chapter by NAMFISA by notice under subsection (2);

"insurance intermediary" means an insurance agent or an insurance broker as defined in section 53;"insurer" means a person carrying on the business of insurance or reinsurance;"long-term insurance" means insurance of a class or classes described in section 8 as long-term insurance;"Long-term Insurance Act" means the Long-term Insurance Act, 1998 (Act No. 5 of 1998);"micro-insurance" means micro-insurance as defined in the regulations;"participating policy" means a policy issued by a registered insurer or reinsurer that entitles its holder to participate in the profits of the registered insurer or reinsurer;"participating policyholder" means the holder of a participating policy;"policy" means a document that is a written contract of insurance or reinsurance and includes a certificate of coverage, interim receipt renewal receipt or any other document evidencing a contract of insurance;"policy benefits" means one or more sums of money, services or other benefits under a policy and includes an annuity;"policyholder" means the person who enters into a domestic policy with an insurer or reinsurer;"premium" means the consideration given or to be given in return for an undertaking to provide insurance;"registered insurer" means an insurer that is a company registered under section 11 to carry on long-term insurance or short-term insurance, and for the purposes of Part 6, includes Lloyd’s as defined in section 42;"registered insurance intermediary" means a registered insurance agent or a registered insurance or reinsurance broker as defined in section 53;"reinsurance" means the business of insuring an insurer, reinsurer or medical aid fund in respect of the contractual obligations of that insurer, reinsurer or medical aid fund;"reinsurer" means a person carrying on the business of reinsurance;"registered reinsurer" means a reinsurer that is a company registered under section 11 to carry on long-term reinsurance or short-term reinsurance, and that is limited by its certificate of registration to reinsurance, and for the purposes of Part 6, includes Lloyd’s as defined in section 42;"short-term insurance" means insurance of a class or classes described in section 8 as short-term insurance; and"Short-term Insurance Act" means the Short-Term Insurance Act, 1998 (Act No. 4 of 1998).

(2)NAMFISA may, for the purposes of paragraph (c) of the definition of insurance advice, by notice in the Gazette, exempt any advisory activity from the application of the provisions of this Chapter.

5. Prohibitions

(1)A person may not carry on the business of insurance or reinsurance in Namibia, unless that person—

(a)is registered pursuant to section 11 or deemed to be registered pursuant to section 12, and carries on the class or classes of insurance indicated in its certificate of registration as an insurer or reinsurer; and

(b)carries on that business in accordance with this Act.

(2)Despite subsection (1), NAMFISA may, if satisfied that no registered insurer or reinsurer is able, in any particular case, to provide policy benefits under a policy on equitable terms, grant an exemption to any foreign insurer or foreign reinsurer to issue a policy payable in Namibia in the currency of Namibia that provides those policy benefits.

(3)NAMFISA may set out terms and conditions in the standards with respect to foreign insurers or foreign reinsurers referred to in subsection (2).

(4)Subsection (1) does not apply to the activities of—

(a)a retirement fund registered under Chapter 5, if and in so far as it acts in accordance with that Chapter;

(b)a friendly society registered under Chapter 6 or exempted under that Chapter from the requirement to be so registered, if and in so far as it enters into long-term policies in respect of which—

(i)the total value of the policy benefits, other than an annuity, to be provided; or

(ii)the total amount of the premium in return for which an annuity is to be provided,

does not exceed the prescribed maximum amount; or

(c)a medical aid fund registered under Chapter 7, if and in so far as it acts in accordance with that Chapter.

(5)For the purposes of subsection (1), a person, in the absence of evidence to the contrary, is regarded as carrying on the business of insurance or reinsurance in Namibia, if that person performs in Namibia—

(a)any act the object or result of which is that another person enters into or varies a policy in which that first-mentioned person undertakes to provide policy benefits; or

(b)in relation to a policy referred to in paragraph (a), any act directed towards—

(i)maintaining, servicing, surrendering, or otherwise dealing with, or providing a loan in respect of, or on the security of, such policy;

(ii)collecting or accounting for premiums payable under such policy; or

(iii)receiving, submitting, settling, assisting or otherwise dealing with the settlement of a claim under such policy.

(6)A person who contravenes or fails to comply with subsection (1) commits an offence and is liable on conviction to a fine not exceeding N$5 000 000 or to imprisonment for a period not exceeding 10 years or to both such fine and such imprisonment.

6. Restrictions on use of certain designations

(1)A person, other than a registered insurer, a registered reinsurer, a registered insurance intermediary or a Lloyd’s broker, Lloyd’s intermediary, Lloyd’s representative or Lloyd’s underwriter may not carry on business under any name or description which includes any of the following words or a literal translation, derivative or abbreviation of any such words—

(a)"assurer", "assurance", "insure", "insurer", "insurance", "Lloyd’s", "underwriter" or "underwriting"; or

(b)"advisor", "agent", "broker", "consultant", "guarantee" or "indemnity", when used in conjunction or association with the word "assurance" or "insurance".

(2)NAMFISA may issue standards exempting a person or class of persons from the provisions of subsection (1).

(3)A person who contravenes or fails to comply with subsection (1) commits an offence and is liable on conviction to a fine not exceeding N$2 500 000 or to imprisonment for a period not exceeding five years or to both such fine and such imprisonment.

7. Limitations

(1)A registered insurer or reinsurer may not—

(a)carry on the business of insurance or reinsurance in Namibia or elsewhere other than for the class or classes of insurance for which it is registered;

(b)in Namibia issue policies other than written domestic policies; or

(c)vary a domestic policy so that it becomes payable either outside Namibia or in a currency other than the currency of Namibia or both payable outside Namibia and in a currency other than the currency of Namibia.

(2)Despite subsection (1), at the request of a registered insurer or reinsurer concerned and subject to the provisions of any other law, NAMFISA, by notice given to the registered insurer or reinsurer and published in the Gazette and if satisfied that it will not be detrimental to the interests of policyholders and that it is desirable in the public interest, may—

(a)grant prior approval to a registered insurer or reinsurer to effect or renew reinsurance outside Namibia subject to such conditions or limitations contained in the standards and as may be determined by NAMFISA in any particular case;

(b)grant exemption for a class or classes of policies to be issued in a currency other than the currency of Namibia, except that every premium in respect of that policy must be paid in the same currency as that in which the policy is issued; or

(c)allow the registered insurer or reinsurer to carry on a business other than insurance or reinsurance that is ancillary to the class or classes of insurance or reinsurance for which it is registered in accordance with any standards that may be issued on the subject.

(3)For the purposes of subsection (2)(c), an ancillary activity for an insurer or a reinsurer registered for long-term insurance includes, but is not limited to—

(a)providing investment counselling services and portfolio management services;

(b)engaging in the provision of real estate brokerage services;

(c)providing information processing services in Namibia to entities which the insurer or reinsurer controls and that do not provide information processing services to other entities;

(d)acting as a custodian of property; or

(e)issuing unit-linked products.

(4)For the purposes of subsection (3)(e), "unit-linked products" has the meaning and must be subject to the requirements set out in the standards.

(5)Subject to subsection (6), an insurer or a reinsurer may not be registered for classes of insurance that include both long-term insurance and short-term insurance.

(6)Despite subsection (5), an insurer or reinsurer registered to carry on long-term insurance or short-term insurance may also be registered to carry on micro-insurance.

(7)A person who contravenes or fails to comply with subsection (1) commits an offence and is liable on conviction to a fine not exceeding N$5 000 000 or to imprisonment for a period not exceeding 10 years or to both such fine and such imprisonment.

8. Classes of insurance

(1)For the purposes of subsections (2) and (3)—"disability insurance business" means the business of providing or undertaking to provide policy benefits under disability policies;"disability event" means the event of the functional ability of the mind or body of a person or an unborn person becoming impaired;"disability policy" means a contract in terms of which a person, in return for a premium, undertakes to provide policy benefits upon a disability event, and includes a reinsurance policy in respect of such a contract;"fund" means—

(a)a friendly society referred to in Chapter 6;

(b)a medical aid fund referred to in Chapter 7;

(c)a pension fund referred to in section 255;

(d)a retirement fund and a beneficiary fund referred to in Chapter 5;

(e)a permanent fund, approved by the Minister, established for the purposes of providing benefits to its members in the event of sickness, accident or unemployment or of providing benefits to surviving spouses, children, dependants or nominees of deceased members or mainly for these purposes; or

(f)any other prescribed person, arrangement or business;

"fund insurance business" means the business of providing or undertaking to provide policy benefits under fund policies;"fund policy" means a contract in terms of which a person, in return for a premium, undertakes to provide policy benefits for purposes of funding in whole or in part the liability of a fund to provide benefits to its members in terms of its rules, other than such a contract relating exclusively to a particular member of the fund or to the surviving spouse, children, dependants or nominees of a particular member of the fund, and includes a reinsurance policy in respect of such a contract;"funeral insurance business" means the business of providing or undertaking to provide policy benefits under funeral policies;"funeral policy" means a contract in terms of which a person, in return for a premium, undertakes to provide on the death of a particular person policy benefits, not exceeding such amount as may be prescribed, consisting mainly of the provision of a funeral for the deceased person or the granting to another person of some other non-monetary benefit, whether or not the policy provides for—

(a)the payment, at the option of the insurer or the reinsurer or any other person, of a sum of money instead of the provision of such funeral or the granting of such other non-monetary benefit; or

(b)the payment of a sum of money in addition to the provision of such funeral or the granting of such other non-monetary benefit, and includes a reinsurance policy in respect of such a contract;

"health event" means an event relating to the health of the mind or body of a person or an unborn person;"health insurance business" means the business of providing or undertaking to provide policy benefits under health policies;"health policy" means a health policy within the meaning of the regulations;"life insurance business" means the business of providing or undertaking to provide policy benefits under life policies;"life policy" means a contract in terms of which a person, in return for a premium, undertakes to—

(a)provide policy benefits—

(i)on death;

(ii)on the happening of an event or contingency dependent on human life; or

(iii)for a term dependent on human life; or

(b)pay an annuity for a certain period,

and includes a reinsurance policy in respect of such a contract;"long-term insurance business" means the business of providing or undertaking to provide policy benefits under long-term policies, but does not include—

(a)the activities of an association of persons established for the purposes of rendering aid to its members or their dependants, commonly called a friendly society, which is registered under Chapter 6 or which is exempted from registration under that Chapter and which does not at any time after the commencement of this Act employ a person whose main remunerated occupation consists of inducing persons to become members of the association or collecting from those members contributions of subscriptions towards the funds of the association;

(b)the activities of a pension fund, a provident fund or a retirement annuity fund as defined in section 1 of the Income Tax Act, which is registered as a retirement fund under Chapter 5;

(c)the activities of a medical aid fund which is registered under Chapter 7;

(d)any activity connected with and subsidiary to any business other than insurance or reinsurance, which in the opinion of NAMFISA is not long-term insurance business as ordinarily understood; or

(e)any such business as may be prescribed which is considered not to be long-term insurance business for the purposes of this Act;

"long-term policy" means a disability policy, fund policy, funeral policy, health policy, life policy or sinking fund policy or a contract comprising a combination of any of these policies;"sinking fund insurance business" means the business of providing or undertaking to provide policy benefits under sinking fund policies;"sinking fund policy" means a contract, other than a life policy, in terms of which a person, in return for a premium, undertakes to provide one or more sums of money on a fixed or determinable future date as policy benefits, and includes a reinsurance policy in respect of such a contract.

(2)The classes of long-term insurance business in respect of which—

(a)an insurer may be registered to carry on business, other than reinsurance business; and

(b)a reinsurer may be registered to carry on reinsurance business only,

in Namibia are those set out in Part 1 of Schedule 1.

(3)The classes of short-term insurance business in respect of which—

(a)an insurer may be registered to carry on business, other than reinsurance business; and

(b)a reinsurer may be registered to carry on reinsurance business only,

in Namibia are those set out in Part 2 of Schedule 1.

(4)If a registered insurer or reinsurer or a person applying for registration and NAMFISA do not agree as to the class to which any particular long-term or short-term insurance business belongs or if that insurer or reinsurer or person so requests, NAMFISA must determine the class under which the business must be dealt with.

(5)The Minister may on his or her own accord or at the request of NAMFISA, by notice in the Gazette, amend Schedule 1 by adding to or removing from that Schedule any class or classes of long-term or short-term insurance business.

Part 2 – REGISTRATION

9. Application for registration

(1)A public company that intends to carry on business as an insurer or a reinsurer in any particular class or classes of insurance in Namibia must make an application to NAMFISA for registration in respect of that class or those classes of insurance in accordance with subsection (2).

(2)An application for registration as an insurer or a reinsurer must be—

(a)made in the manner and form required by the standards;

(b)include the information with respect to the principal office and principal officer required by the standards;

(c)accompanied by the documents and other information required by the standards;

(d)accompanied by such further information that NAMFISA on reasonable grounds may require in any particular case;

(e)made subject to and in accordance with any other applicable provision of this Act; and

(f)accompanied by the required fee.

(3)Before making an application referred to in subsection (1), the applicant must, at the expense of the applicant, give notice of the proposed application in two newspapers circulating nationally in Namibia, stating—

(a)the name of the applicant;

(b)the place where the application and the memorandum, articles and rules of the applicant may be inspected by members of the public; and

(c)the period within which objections to the application may be lodged with NAMFISA.

10. Registration requirements

(1)Before approving the application and registering the applicant as an insurer or a reinsurer for any class of insurance, NAMFISA must be satisfied on reasonable grounds that the requirements of subsection (3) have been met and that the applicant—

(a)is a public company;

(b)has appointed a principal officer pursuant to section 15 who is a member of the board of directors;

(c)has at least five directors—

(i)at least 50 percent of whom must be Namibian citizens or holders of permanent residence permits and who are resident in Namibia;

(ii)at least one third of whom must be independent within the meaning of the standards; and

(iii)none of whom is a registered insurance intermediary;

(d)has, in respect of such insurance business in Namibia, capital that meets the capital adequacy requirements of the standards;

(e)has paid up capital and surplus in Namibian dollars totalling at least—

(i)N$2 000 000 for registration for one class of long-term insurance;

(ii)N$8 000 000 for registration for more than one class of long-term insurance;

(iii)N$2 000 000 for registration for one class of short-term insurance;

(iv)N$8 000 000 for registration for more than one class of short-term insurance;

(v)N$200 000 for registration for funeral insurance;

(vi)N$200 000 for registration for micro-insurance;

(vii)NS12 000 000 for registration for reinsurance; or

(viii)such greater amount in any of the cases referred to in subparagraphs (i) to (vii) as the Minister may prescribe;

(f)has submitted to NAMFISA a business plan, certified by a valuator, covering a period of three years reflecting the classes of insurance proposed to be undertaken and their respective risk profiles and providing details of projected set-up costs, capital requirements, projected development of business, solvency margins and reinsurance arrangements, and such business plan has been found satisfactory by NAMFISA;

(g)will be in a position to—

(i)carry on the business of insurance or reinsurance in the class or classes for which the application has been made;

(ii)conduct all affairs relating to its insurance or reinsurance business in accordance with sound insurance, reinsurance and financial principles and practices and the provisions of this Act;

(iii)comply with the capital adequacy requirements set out in the standards; and

(iv)protect the interests of policyholders; and

(h)will be in a position to ensure that its organisational or group structure will not be such as to hinder effective supervision by NAMFISA.

(2)For the purposes of subsection (1)(c)(i), the principal officer may not be included in calculating the 50 percent required pursuant to that subsection.

(3)Before approving the application and registering the applicant, NAMFISA must be satisfied on reasonable grounds that—

(a)in relation to the applicant public company—

(i)every shareholder or other owner that controls the applicant, and every director, the principal officer and other officers of the applicant are fit and proper within the meaning of the standards;

(ii)the memorandum, articles or other founding documents of the applicant are not inconsistent with the provisions of this Act;

(iii)the direct or indirect control of the public company is not likely to be contrary to the interest of consumers of the financial services concerned; and

(iv)the applicant will be in a position to ensure that its organisational or group structure will not be such as to hinder effective supervision by NAMFISA;

(b)doing so is not contrary to—

(i)this Act; or[Please note: numbering as in original.]

(iii)the public interest;

(c)the applicant has the attributes reasonably necessary and adequate to—

(i)provide the financial services in question with professional integrity, prudence, proper skill and due diligence;

(ii)maintain a sound financial position and not cause or further instability in the financial system of Namibia; and

(iii)comply with this Act;

(d)the name under which the applicant proposes to conduct business, or a translation, shortened form or derivative of that name is not in contravention of section 391;

(e)the applicant has submitted all other information which, in the opinion of NAMFISA, is necessary to assess the application, and such information has been found satisfactory by NAMFISA; and

(f)the applicant has complied and will continue to comply with any other requirements contained in this Act or in the standards which apply to the applicant.

11. Registration

(1)If NAMFISA is satisfied that the applicant complies with the provisions of sections 9 and 10, and after consideration of any objection received as a result of the notice referred to in section 9(3), NAMFISA must, subject to conditions that may be imposed under subsection (4), register the applicant as an insurer or a reinsurer to carry on the business of long-term insurance or short-term insurance in the class or classes in respect of which registration has been granted.

(2)The registration referred to in subsection (1) must specify—

(a)the principal office of the applicant in Namibia; and

(b)the places in Namibia from which the applicant may operate.

(3)Upon registration of an applicant NAMFISA must issue to the applicant a certificate of registration in a form provided by the standards.

(4)NAMFISA may impose such conditions on the registration of the applicant as it considers necessary, having regard, without limitation, to all the facts and information available to NAMFISA pertaining to the applicant, and any guidelines issued by NAMFISA under this Act.

(5)If an application is refused by NAMFISA or is granted subject to conditions, NAMFISA must advise the applicant of the refusal or conditions by giving notice to the applicant containing the reasons for the refusal or the conditions, and must give the applicant a reasonable opportunity to be heard by specifying a period of not less than 21 days during which the applicant may make representations in writing to NAMFISA.

(6)An insurer or a reinsurer must comply with the conditions subject to which it was registered.

12. Insurers and reinsurers previously registered

An insurer or a reinsurer that was registered under the Long-term Insurance Act or the Short-term Insurance Act on the date of commencement of this Act is deemed to be a registered insurer or reinsurer under section 11 and, subject to such adjustments as may be necessary and any applicable standards, the provisions of this Act apply to that insurer or reinsurer.

13. Application for cancellation or variation of registration

(1)An insurer or a reinsurer may at any time apply to NAMFISA for cancellation of a registration granted pursuant to section 11 or for a variation to the classes of insurance for which it was registered or to the conditions subject to which that registration was granted.

(2)An application made under subsection (1) must be—

(a)made in the manner and form required by the standards;

(b)accompanied by the documents and other information required by the standards;

(c)accompanied by such further information that NAMFISA on reasonable grounds may require in any particular case; and

(d)accompanied by the required fee.

(3)Before making an application pursuant to subsection (1), the applicant must give prior notice of the proposed application in two newspapers circulating nationally in Namibia, at the expense of the applicant, stating—

(a)the name of the applicant;

(b)either—

(i)the reasons for the proposed cancellation;

(ii)the nature of the proposed variation to the classes of insurance for which it was registered; or

(iii)the nature of the proposed variation to the conditions; and

(c)the period within which objections to the application may be lodged with NAMFISA.

(4)Section 11 applies with the changes required by the context to an application for a variation of conditions referred to in subsection (1).

(5)If, after consideration of any objection received as a result of the notice referred to in subsection (3), NAMFISA is of the opinion that it is reasonable to do so and not against the public interest, NAMFISA may, by notice to the insurer or reinsurer concerned—

(a)cancel the registration; or

(b)vary the conditions of registration, including the imposition of additional conditions.

(6)NAMFISA must make public any cancellation of registration or variation of conditions of registration under subsection (5) and the reasons for the cancellation or variation, by notice in the Gazette or by means of any other appropriate public statement.

14. Cancellation or variation of registration

(1)NAMFISA may take any of the actions set out in subsection (2), if NAMFISA acting reasonably, finds that—

(a)a registered insurer or reinsurer has made a material misrepresentation or failed to provide information that was materially relevant in its application for registration;

(b)a registered insurer or reinsurer has failed to comply with this Act;

(c)a registered insurer or reinsurer no longer meets the requirements for registration;

(d)a registered insurer or reinsurer has provided financial services without professional integrity, prudence, proper skill or due diligence;

(e)a registered insurer or reinsurer is in an unsound financial position;

(f)a registered insurer or reinsurer has failed to comply with a directive, request or requirement of NAMFISA issued under this Act;

(g)a registered insurer or reinsurer has failed to give effect to a decision of the Appeal Board;

(h)a registered insurer or reinsurer has ceased to operate or has failed to commence operating within a reasonable time after being registered;

(i)a registered insurer or reinsurer is involved in a financial crime; or

(j)any director, the principal officer, other officer or member of a board of the registered insurer or reinsurer no longer meets the fit and proper requirements within the meaning of the standards or has engaged in conduct identified in the standards as misconduct.

(2)If NAMFISA is satisfied that any of the circumstances described in subsection (1) exist, NAMFISA may take any of the following actions with respect to the registered insurer or reinsurer—

(a)cancel its registration;

(b)vary the conditions of its registration, including the imposition of additional conditions; or

(c)take any other steps that NAMFISA may consider necessary or advisable.

(3)Before taking any action pursuant to subsection (2), NAMFISA must give notice to the registered insurer or reinsurer of its intention to take the action, together with the reasons for taking the action, and must give the registered insurer or reinsurer a reasonable opportunity to be heard by specifying a period of not less than 21 days during which the registered insurer or reinsurer may in writing make representations to NAMFISA on the matter.

(4)Subject to such conditions as NAMFISA may impose, NAMFISA may provisionally suspend the registration or take control of the assets of a registered insurer or reinsurer without giving notice and an opportunity to be heard pursuant to subsection (3), if NAMFISA is satisfied on reasonable grounds that it is urgently necessary to do so in order to prevent or mitigate damage to the interests of financial institutions, financial intermediaries, their clients or the financial system of Namibia, but NAMFISA must—

(a)give the registered insurer or reinsurer the notice and an opportunity to be heard and make representations as soon as reasonably possible; and

(b)having considered any representations received, determine whether the provisional suspension should be continued until further conditions can be imposed or registration cancelled.

(5)On the cancellation of the registration of an insurer or a reinsurer under section 13, subsection (2)(a) or any other applicable provision of this Act, the insurer or reinsurer must be wound-up in accordance with the requirements of Chapter 10, and NAMFISA must take such steps and may impose such conditions as are necessary in the circumstances, which steps may include the transfer of the business of the insurer or reinsurer to another insurer or reinsurer, as appropriate, but no distribution of the assets of the insurer or reinsurer may be made without the prior approval of NAMFISA.

(6)NAMFISA must make public any suspension or cancellation of registration, variation of conditions of registration or any other steps taken under this section and the reasons for the suspension, cancellation or variation, by notice in the Gazette or by means of any other appropriate public statement.

(7)A person who—

(a)continues to operate, or engage in, the business of insurance or reinsurance after the cancellation of registration under section 13(5)(a), subsection (2)(a) or any other applicable provision of this Act or after suspension of registration under subsection (4); or

(b)fails to comply with a condition imposed by NAMFISA under subsection (4),

commits an offence and is liable on conviction to a fine not exceeding N$5 000 000 or to imprisonment for a period not exceeding 10 years or to both such fine and such imprisonment.

Part 3 – ADMINISTRATION

15. Principal office and principal officer

(1)Every registered insurer or reinsurer must—

(a)have a principal office in Namibia where it must hold and maintain the documents referred to in the standards; and

(b)appoint to be its principal officer in Namibia, a fit and proper person within the meaning of the standards, who is—

(i)a Namibian citizen or permanent resident; and

(ii)resident in Namibia.

(2)Despite subsection (1)(b)(i), NAMFISA may, in exceptional circumstances, grant permission that a principal officer referred to in that subsection may, subject to the Immigration Control Act, 1993 (Act No. 7 of 1993), for such period as may be determined by NAMFISA, be a person other than a Namibian citizen or permanent resident.

(3)After the appointment of a principal officer pursuant to subsection (1)(b), a registered insurer or reinsurer must, within the period set out in the standards, in writing notify NAMFISA of the appointment.

(4)NAMFISA may, on the grounds that a principal officer is not a fit and proper person, within the meaning of the standards, and after giving the registered insurer or reinsurer and the principal officer a reasonable opportunity to be heard, direct the registered insurer or reinsurer to appoint some other person to be the principal officer of the registered insurer or reinsurer.

(5)Whenever a principal officer resigns or the appointment of a principal officer is terminated by a registered insurer or reinsurer or by the expiry of a contract of employment, the registered insurer or reinsurer must, within the period set out in the standards, in writing notify NAMFISA and submit to NAMFISA a written statement of the reasons for the termination or in the opinion of the registered insurer or reinsurer, the reasons for the resignation.

(6)The principal officer of a registered insurer or reinsurer must be an ex officio member of the board of the insurer or reinsurer, but the principal officer may not serve as chairperson of the board.

(7)The principal officer of a registered insurer or reinsurer is authorised to act on behalf of the insurer or reinsurer to ensure compliance with this Act, and in any case where a person, including NAMFISA, communicates with that insurer or reinsurer, that person may do so by addressing the communication to the principal officer.

(8)Process in any legal proceedings may be served on a registered insurer or reinsurer by serving a copy of the process at its principal office.

(9)A person who contravenes or fails to comply with subsection (3) commits an offence and is liable on conviction to a fine not exceeding N$1 000 000 or to imprisonment for a period not exceeding two years or to both such fine and such imprisonment.

16. Accounts

A registered insurer or reinsurer must keep in Namibia proper accounts of, and financial information relating to, its insurance or reinsurance business that comply with the requirements of the standards.

17. Appointment of auditor

(1)A registered insurer or reinsurer must, in accordance with section 401, appoint and at all times have an auditor or firm of auditors to be its auditor for its insurance business in Namibia.

(2)A registered insurer or reinsurer may not appoint as its auditor—

(a)an auditor who is; or

(b)a firm of auditors any member of which is,

an employee, officer, director or shareholder of the registered insurer or reinsurer or of an insurance intermediary that is affiliated with the registered insurer or reinsurer.

(3)NAMFISA may direct a registered insurer or reinsurer to change its auditor if NAMFISA is satisfied that the auditor or any member of the firm of auditors appointed as auditor is an employee, officer, director or shareholder of the registered insurer or reinsurer or of an insurance intermediary that is affiliated with the registered insurer or reinsurer.

(4)An auditor appointed under subsection (1)—

(a)must perform the functions and duties assigned to;

(b)must exercise the powers conferred on; and

(c)is subject to the obligations imposed on,

an auditor by section 401.

18. Appointment of valuator

(1)A registered insurer or reinsurer must, in accordance with section 402, appoint and at all times have a valuator for the purposes of this Act.

(2)A registered insurer or reinsurer may not appoint as its valuator an employee, officer, director or shareholder of the registered insurer or reinsurer or of an insurance intermediary that is affiliated with the registered insurer or reinsurer.

(3)A registered insurer or reinsurer that was registered under the Short-term Insurance Act must appoint a valuator within 90 days of the coming into force of this Part.

(4)The valuator of a registered insurer or reinsurer that was registered under the Long-term Insurance Act may continue as the valuator of that registered insurer under this Act as long as the valuator meets the requirements of subsection (2) and section 402(2).

(5)NAMFISA may direct a registered insurer or reinsurer to change its valuator if NAMFISA is satisfied that the person appointed as valuator is an employee, officer, director or shareholder of the registered insurer or reinsurer or of an insurance intermediary that is affiliated with the registered insurer or reinsurer.

(6)In addition to the functions and duties assigned to a valuator by section 402, a valuator of a registered insurer or reinsurer must value the actuarial and other policy liabilities of the registered insurer or reinsurer with respect to its insurance or reinsurance business in Namibia as at the end of each financial year, and prepare a valuation report thereon for that financial year.

(7)The report of the valuator referred to in subsection (6) must include any particulars set out in the standards.

(8)The registered insurer or reinsurer must, within 180 days from the end of the valuation period, and subject to section 402 (10)(a), deposit a copy of the valuation report referred to in subsection (6) with NAMFISA.

(9)Whenever a registered insurer or reinsurer deposits with NAMFISA a copy of a report made by a valuator under this section, it must also deposit with NAMFISA a certificate of the board and of the principal officer of the registered insurer or reinsurer that to the best of their knowledge and belief the information furnished to the valuator for the purposes of the report was correct and complete in every material respect.

(10)A valuator appointed under subsection (1)—

(a)must perform the functions and duties assigned to;

(b)must exercise the powers conferred on; and

(c)is subject to the obligations imposed on,

a valuator by section 402.

(11)Any person who contravenes or fails to comply with subsection (8) or (9) or makes a false or misleading statement when required to issue a certificate pursuant to subsection (9) commits an offence and is liable on conviction to a fine not exceeding N$2 500 000 or to imprisonment for a period not exceeding five years or to both such fine and such imprisonment.

Part 4 – CONDUCT OF INSURANCE BUSINESS

19. Conduct of insurance business

(1)A registered insurer or reinsurer must, in carrying on the business of insurance and conducting its affairs—

(a)in all respects act honestly and in good faith;

(b)employ sound insurance, reinsurance and financial principles and practices; and

(c)comply with the provisions of this Act and any other applicable financial services law.

(2)Every registered insurer or reinsurer must—

(a)hold in strict confidence all information concerning the business and affairs of any client of the registered insurer or reinsurer acquired in the course of the professional relationship with that client and may not divulge any such information unless—

(i)authorised in writing by the client;

(ii)required by this Act or any other law or by an order of the court; or

(iii)as may be necessary in order to arrange or provide for the insurance required by the client;

(b)observe the requirements of this Act and all other relevant rules and legislation regarding the preservation and safekeeping of the property of the client entrusted to the registered insurer or reinsurer and, if there are no such requirements, rules or legislation or the registered insurer or reinsurer is in doubt, take the same care of such property as a careful and prudent person would take of that person’s own property of like description;

(c)not stipulate, charge or accept any fee that is not fully disclosed or the basis for which is not fully disclosed, prior to the service being rendered or which is so disproportionate to the service provided as to be unconscionable;

(d)maintain accounts and financial records in respect of the business carried out for a period of at least five years after the period to which those accounts and records relate;

(e)comply with such instructions as may be issued by NAMFISA with respect to the specific accounting, financial and other records that must be maintained for the particular type of activity in which the registered insurer or reinsurer is engaged.

(3)A registered insurer or reinsurer may not, without the prior written approval of NAMFISA, make additions to or alter the provisions of its memorandum, articles or rules, and any purported addition or alteration without that approval is void, despite any provision in any other law.

20. Financially sound position

(1)A registered insurer or reinsurer must at all times maintain its business in a financially sound position by—

(a)having assets exceeding the capital adequacy requirements as set out in the standards; and

(b)generally conducting its business so that it is in a position to meet its liabilities and capital adequacy requirements at all times.

(2)For the purposes of determining the compliance of each registered insurer or reinsurer with the capital adequacy requirements, the values of the assets and liabilities of each registered insurer or reinsurer must be determined in accordance with the standards.

(3)A registered insurer or reinsurer must be regarded as having failed to comply with subsection (1) if it—

(a)does not have assets as required under this Act; or

(b)has not made provision for the liabilities and the capital adequacy requirements in accordance with this Act and the standards.

(4)A registered insurer or reinsurer may not declare or pay a dividend to its shareholders—

(a)while it fails or is likely to fail to comply with subsection (1);

(b)if the declaration or payment would result in it failing or being likely to fail to comply with subsection (1); or

(c)if, after the declaration or payment, the aggregate value of assets required under this Act would be less than the aggregate value of its liabilities, issued share capital and non-distributable reserves.

(5)A registered insurer or reinsurer may not declare or pay a dividend to its shareholders unless its valuator has certified that the declaration or payment will not be contrary to subsection (4).

(6)A registered insurer or reinsurer may, subject to the provisions of this Act and the regulations, invest its funds in any manner provided by its memorandum, articles or rules.

(7)The Minister may make regulations and NAMFISA may issue standards in respect of the investments by, or of, a registered insurer or reinsurer.

(8)Any person who makes an investment in contravention of, or fails to comply with subsection (1) commits an offence and is liable on conviction to a fine not exceeding N$2 500 000 or to imprisonment for a period not exceeding five years or to both such fine and such imprisonment.

21. Restrictions on pledging assets and borrowing

(1)A registered insurer or reinsurer may not—

(a)pledge, hypothecate or otherwise encumber any of its assets; or

(b)allow any other person to hold any assets on its behalf,

unless the asset in question forms part of assets that are regarded as free assets of the registered insurer or reinsurer as determined in the standards.

(2)Where an asset of a registered insurer or reinsurer is held, pledged, hypothecated or otherwise encumbered as contemplated in subsection (1), the value of that asset must, for the purposes of this Act, be reduced proportionately to the extent to which it is so held, pledged, hypothecated or otherwise encumbered.

(3)A registered insurer or reinsurer may not—

(a)borrow money; or

(b)guarantee to discharge, or bind itself as surety for the discharge of, the debts or other obligations of any person,

unless the borrowing of money or the granting of the guarantee or surety is done or effected against the security of the free assets of the registered insurer or reinsurer as determined in the standards.

(4)A person who contravenes or fails to comply with subsection (1) or (3) commits an offence and is liable on conviction to a fine not exceeding N$5 000 000 or to imprisonment for a period not exceeding 10 years or to both such fine and such imprisonment.

22. Actuarial soundness of policies

(1)A registered insurer or insurer may not—

(a)enter into any policy unless the valuator is satisfied that the premiums, benefits and other values of the policy are actuarially sound;

(b)make a distinction between the premiums, benefits or other values of different policies unless the valuator is satisfied that the distinction is actuarially justified; or

(c)award a bonus or similar benefit to a policyholder unless—

(i)it is done in accordance with the principles and practices of financial management of the registered insurer or reinsurer; and

(ii)the valuator is satisfied that it is actuarially sound and that payment of the bonus will not cause the insurer or reinsurer to be in contravention of section 20.

(2)For the purposes of subsection (1)(c)(i), "principles and practices of financial management" means a statement approved by the board of directors of the registered insurer or reinsurer setting out the discretion retained by the board of directors and the parameters within which that discretion must be exercised in respect of policies where the registered insurer or reinsurer has to exercise its discretion in awarding a bonus or similar benefit.

23. Prohibition against tied selling

(1)Aperson (hereinafter in this section referred to as "the creditor") may not—

(a)lend or offer to lend money;

(b)render or offer to render any service;

(c)lease or offer to lease goods; or

(d)grant or offer to grant credit,

to any person (hereinafter in this section referred to as "the debtor"), on condition that the debtor or any other person must take out insurance from that creditor or from a specific insurer, reinsurer or insurance intermediary nominated by the creditor.

(2)Despite subsection (1), where for the purposes of securing a debt or other obligation arising from a transaction contemplated in that subsection it is reasonable, having regard to—

(a)the creditworthiness of the debtor;

(b)any other security furnished or offered by the debtor; and

(c)any other relevant consideration,

for the creditor to require the debtor or other person concerned to take out insurance, the creditor must provide the debtor, before the transaction is entered into, with a written statement indicating, in bold face type of at least 15 points, that the debtor or other person concerned has—

(i)no obligation to acquire such insurance from the creditor or from a specific insurer, reinsurer or insurance intermediary nominated by the creditor; and

(ii)a reasonable period of time, which must not be less than 48 hours, to provide other alternative sources for such insurance from one or more registered insurers or reinsurers or insurance intermediaries.

24. Policies: miscellaneous provisions

(1)Despite anything to the contrary contained in any domestic policy or any document relating to such policy, any such policy issued before or after the commencement of this Act may not be invalidated, and the obligation of a registered insurer or reinsurer under that policy may not be excluded or limited, and the obligations of the policyholder may not be increased, on account of any non-disclosure or any representation made to the registered insurer or reinsurer which is not true, whether or not the representation has been warranted to be true, unless the incorrectness of such representation is of such a nature as to be likely to have materially affected the assessment of the risk under the policy at the time—

(a)of its issue;

(b)of any reinstatement or renewal of the policy;

(c)a material change is made to the policy; or

(d)the policy is converted to another policy.

(2)For the purposes of subsection (1), a representation or non-disclosure is material if a reasonable and prudent person would consider that the particular information constituting the representation or which was not disclosed ought to have been correctly disclosed to the registered insurer or reinsurer so that the registered insurer or reinsurer could form its own view as to the effect of such information on the assessment of the relevant risk.

(3)A policy issued by a registered insurer or reinsurer before or after the commencement of this Act will not be invalidated on account of the non-compliance by the registered insurer or reinsurer with a provision of any law applying to that policy.

(4)Interest on an unpaid premium or on a loan or advance made by a registered insurer or reinsurer on the sole security of a policy under which the registered insurer or reinsurer is liable, will cease to accrue when that interest has accumulated to an amount equal to the amount of that unpaid premium, loan or advance.

(5)In the case of a policy issued after 31 December 1973, a debt arising out of an unpaid premium or out of a loan or advance referred to in subsection (4), will not become prescribed before the liability of the registered insurer or reinsurer under that policy becomes prescribed.

25. Publication of statements of capital

(1)A registered insurer or reinsurer may not publish any statement concerning its authorised, subscribed or paid up capital other than that shown in its audited financial statements.

(2)A person who contravenes or fails to comply with subsection (1) commits an offence and is liable on conviction to a fine not exceeding N$2 500 000 or to imprisonment for a period not exceeding five years or to both such fine and such imprisonment.

26. Prohibition against securing business for unregistered person

(1)A person may not induce or attempt to induce any other person to enter into or to make an application to enter into a domestic policy with a third person who is not a registered insurer or reinsurer.

27. Restriction on acquisition of shares or other interests

(1)In this section "registered insurance intermediary" means a registered insurance broker as defined in section 53, a registered reinsurance broker as defined in section 53 and a Lloyd’s broker as defined in section 42.

(2)Except with the prior written approval of NAMFISA—

(a)a registered insurance intermediary the main business of which includes providing any financial service in connection with short-term insurance or the principal officer or a representative of that insurance intermediary may not acquire or hold shares in an insurer or a reinsurer that is registered to carry on short-term insurance;

(b)an insurer or a reinsurer that is registered to carry on short-term insurance may not acquire or hold shares or interests in a registered insurance intermediary the main business of which includes providing any financial service in connection with short-term insurance;

(c)a registered insurance intermediary the main business of which includes providing any financial service in connection with long-term insurance or the principal officer or a representative of that insurance intermediary may not acquire or hold shares in an insurer or a reinsurer that is registered to carry on long-term insurance; and

(d)an insurer or a reinsurer that is registered to carry on long-term insurance may not acquire or hold shares or interests in a registered insurance intermediary the main business of which includes providing any financial service in connection with long-term insurance.

(3)Subsection (2) does not apply to shares or interests that are acquired or held as a result of—

(a)an amalgamation;

(b)the demutualisation of a registered insurer or reinsurer that is a mutual company; or

(c)having received such shares or interests in payment of a debt.

(4)A person who contravenes or fails to comply with subsection (2) commits an offence and is liable on conviction to a fine not exceeding N$5 000 000 or to imprisonment for a period not exceeding 10 years or to both such fine and such imprisonment.

28. Participating policies

(1)The holder of one or more participating policies issued by a registered insurer or reinsurer is entitled to attend meetings of policyholders, or of shareholders and policyholders, of the insurer or reinsurer and is entitled to one vote at any such meeting.

(2)The board of directors of a registered insurer or reinsurer that issues participating policies, must—

(a)before issuing any participating policies; or

(b)in the case of a registered insurer or reinsurer that was registered under the Long-term Insurance Act, within 12 months after the coming into force of this Part,

establish, in accordance with the standards, a policy for determining the dividends and bonuses to be paid to the participating policyholders.

(3)A registered insurer or reinsurer, the directors of which establish or vary a dividend policy under subsection (2), must, within 30 days after the establishment or variation, send a copy of the dividend policy to NAMFISA.

29. Plain language

Such policies, certificates of coverage, related documents and any other documents specified in the standards must be written in plain language as described in the standards.

30. Misleading, false and deceptive statements: consequences of conviction

(1)Where a registered insurer or reinsurer is convicted of an offence under section 406—

(a)the registered insurer or reinsurer may not enforce a policy which a person was induced to enter into unless so requested in writing by the person induced;

(b)the person who was induced to enter into the policy may cancel that policy and recover from the registered insurer or reinsurer any money or other property paid or transferred by the person under such policy, together with such compensation for any loss sustained as a result of such payment or transfer as the person and the registered insurer or reinsurer may agree upon or as a court may determine, but if that person exercises the right of recovery under this subsection, he or she will not receive any benefits under the policy and must repay any benefits already received; or

(c)a person who was induced to exercise or refrain from exercising any rights under a policy referred to in paragraph (a) may, not more than 90 days after the conviction of the registered insurer or reinsurer—

(i)nullify the action the person was induced to take; and

(ii)exercise or refrain from exercising such rights in such manner as the person may determine regardless of a time limit that may have existed in the policy in respect of the exercise of those rights.

(2)Subsection (1) does not limit any other right of a person to enforce any other rights infringed by any action for which a registered insurer or reinsurer is convicted under this Act.

Part 5 – CERTAIN LONG-TERM POLICIES

31. Life policies: minors

(1)A person who has attained the age of 18 years may, without the consent or assistance of his or her guardian—

(a)effect a life policy on his or her life;

(b)pay any premium due under the life policy with money which the minor has earned or with any other money at his or her disposal;

(c)give an undertaking to maintain the life policy for a specified period and cede his or her present or future earnings as security for such undertaking; and

(d)cede, pledge or surrender the life policy.

(2)If any money becomes payable to a person who has attained the age of 18 years under a life policy effected by that person on his or her own life, the registered insurer or reinsurer that is liable under the life policy must pay that money to that person, and that person may deal therewith as he or she thinks fit without the consent of his or her guardian.

(3)Any discharge given by a person referred to in subsection (1) to a registered insurer or reinsurer without the consent or assistance of his or her guardian with regard to a payment made in terms of subsection (2), will be of full force and effect.

32. Life policies: married persons

Despite the provision of any law, including the law relating to community of property or donation between spouses, but subject to the provisions of this Part, a married person—

(a)may effect and own a life policy;

(b)may hold and, by way of gift or otherwise, acquire from or dispose of to any person, including a spouse, any right or interest in a life policy;

(c)becomes the owner of—

(i)any moneys paid by a registered insurer or reinsurer in respect of any right or interest held by that person in a life policy or any assets acquired with those moneys; and

(ii)any moneys or assets acquired in respect of the disposal of any right or interest held by that person in a life policy or any assets acquired with those moneys; and

(d)may dispose of moneys or assets referred to in paragraph (c) to any person, including a spouse, by way of gift or otherwise, in all respects as if that person were a single person of full age and capacity, and any such policy, right, interest, assets or money may be excluded from any joint estate, whether or not it was effected, acquired or paid before or during the marriage.

33. Persons married in community of property

If a premium paid under a life policy effected by a spouse married in community of property or under a life policy in which that spouse holds any right or interest, was paid out of moneys which belonged to the joint estate of both spouses and the liabilities of both spouses continuously exceeded the value of their assets from the time of the payment of any such premium until their joint estate was sequestrated, the spouse by whom the life policy was effected or by whom the right or interest is held, must pay into the insolvent estate the amount of every such premium in so far as its payment created or increased the excess of liabilities over assets in the joint estate.

34. Life policy on own life: protection during life

(1)A life policy effected by a person on his or her own life which has endured for a period of at least three years from the date of the payment of the first premium and which—

(a)is attached in execution of a judgment or an order of any court at the instance of a judgment creditor of that person; or

(b)becomes part of that person’s insolvent estate during the lifetime of that person,

is, to the extent specified in subsection (2), protected against any creditor of that person and against any claim in connection with the attachment or the insolvency.

(2)The protection afforded in respect of a life policy referred to in subsection (1) extends to so much of the realisable value of the life policy as does not exceed the prescribed amount, except that—

(a)where there are two or more such life policies, the protection will extend only to the amount determined in accordance with this subsection; and

(b)where a life policy referred to in that subsection is pledged or ceded as security for any liability, the realisable value of the policy which forms the security for the liability in respect of which the life policy was pledged or ceded, may not be included as part of the amount determined in accordance with this subsection.

(3)Where a life policy is afforded protection in the circumstances contemplated in subsection (1), the policyholder, the judgment creditor or the trustee of the insolvent estate must notify the registered insurer or reinsurer who is liable under that policy in writing of the protection, whereupon the registered insurer or reinsurer must issue an endorsement to the policy to the effect that during the time that the judgment debt remains unsettled or the owner of that policy remains an unrehabilitated insolvent, that policy may be dealt with only with the permission of the judgment creditor or the trustee or, if there is no judgment creditor or trustee, of a court.

(4)For the purposes of this section—

(a)a life policy issued by a registered insurer or reinsurer in exchange for or in consideration of the surrender of another life policy under which the registered insurer or reinsurer was previously liable, is deemed to have been effected on the date on which the surrendered life policy was issued, if no payment other than—

(i)the value of the surrendered life policy; and

(ii)any premium or premiums that would have become payable under that policy if it were not surrendered;

was received by the registered insurer or reinsurer as consideration for the new life policy; and

(b)a life policy issued by a registered insurer or reinsurer under section 38(3) is deemed to have been effected on the date on which the surrendered life policy for which it is substituted was issued.

35. Life policy on own life: protection on death

(1)If a person has effected a life policy on his or her own life which at the date of that person’s death has endured for a period of at least three years from the date of the payment of the first premium, and—

(a)on the death of that person, and subject to the provisions of subsection (2), his or her liabilities exceed his or her assets, whether or not that person has been declared an insolvent; and

(b)that person has left a surviving spouse, child or parent,

any money payable to the deceased estate of that person under any such life policy must be paid to that estate.

(2)Money paid to an estate pursuant to subsection (1)—

(a)must, to the extent that it does not in the aggregate exceed the prescribed amount, devolve upon the surviving spouse, child or parent in accordance with the provisions of a valid testamentary disposition of that person or, if there is no valid testamentary disposition, by right of intestate succession; and

(b)is, to the extent that it does not in the aggregate exceed the prescribed amount, not liable to be attached in execution of a judgment or an order of any court at the instance of a judgment creditor of that person or of any other person.

(3)When calculating whether the liabilities of a deceased person exceed his or her assets, any life policy effected by the deceased person on his or her own life and which has endured for a period of at least three years from the date of the payment of the first premium, may not be included as assets of the deceased estate to the extent that the realisable value of such life policy or the aggregate realisable value of all such life policies does not exceed the prescribed amount.

36. Life policies: spouses and children

(1)Subsection (3) does apply in the situation where a person—

(a)cedes a life policy effected on his or her own life to, or in favour of, any person referred to in subsection (2);

(b)effects a life policy on his or her own life or on the life of his or her intended spouse whom he or she thereafter marries or on the life of his or her spouse in favour of any person referred to in subsection (2); or

(c)nominates his or her intended spouse (whom, for the purposes of this section, he or she thereafter marries), spouse or child as the beneficiary of a life policy mentioned in paragraph (a) or (b).

(2)The persons referred to in subsection (1)(a) and (b) are the person’s—

(a)intended spouse; or

(b)spouse, and additionally or alternatively, child or children, including an unborn child.

(3)A life policy referred to in subsection (1) or money becoming due under that life policy, subject to the provisions of this section and to the terms and conditions on which the person may have ceded or effected the policy or may have made the nomination—

(a)is not liable for attachment in execution of a judgment or an order of any court at the instance of a judgment creditor of the person to whom such life policy was ceded or in whose favour it was effected or who has been nominated as beneficiary of the policy;

(b)may not become part of the insolvent estate of the person to whom such life policy was ceded or in whose favour it was effected or who has been nominated as beneficiary of the policy, but—

(i)the protection afforded in terms of this section may, together with the protection afforded in respect of life policies in terms of any other provision of this Act, not exceed the prescribed amount; and

(ii)where the life policy is pledged or ceded as security for any liability, the realisable value of the policy which forms the security for the liability in respect of which the life policy was pledged or ceded, must not be included as part of the amount determined in accordance with subparagraph (i).

(4)The entitlement to a benefit conferred or purported to be conferred upon an intended spouse, a spouse or child under a life policy in any of the circumstances contemplated in this section is, despite—

(a)any agreement to the contrary between the registered insurer or reinsurer liable under such policy and the person by whom such policy was effected; or

(b)the fact that the intended spouse, spouse or child has not accepted that benefit and is not a party to the life policy,

but subject to the terms and conditions on which such policy was ceded or effected or the nomination was made, enforceable against such registered insurer or reinsurer at the instance of the intended spouse, spouse or child or the legal representative of the intended spouse, spouse or child.

37. Protected life policies: selection for realisation

If—

(a)two or more life policies in respect of which protection is afforded under section 34, 35 or 36, are the property of one person and the life policies are attached in execution of a judgment or an order of any court at the instance of a judgment creditor of the policyholder; or

(b)the estate of the policyholder of two or more life policies referred to in paragraph (a) is sequestrated, and a part only of the aggregate realisable value of those life policies is so protected,

the creditor or the trustee of the insolvent estate of the policyholder may determine which life policy or policies will be realised wholly or partly in order to make available to the creditor or trustee so much of the aggregate realisable value as is not so protected.

38. Protected life policies: partial realisation

(1)A judgment creditor of the holder of a life policy or the trustee of the insolvent estate of that policyholder who is entitled to a part of the realisable value of the life policy may, if the creditor or trustee is in possession of the life policy, deliver that policy to the registered insurer or reinsurer who is liable under the life policy for the purposes of the payment to the creditor or trustee of the amount to which that creditor or trustee is entitled.

(2)If a judgment creditor or trustee referred to in subsection (1) is not in possession of a life policy in respect of which the creditor or trustee is entitled to a part of the realisable value, the holder of the life policy or any other person in possession of the policy must, at the request of the creditor or trustee, deliver the life policy to the registered insurer or reinsurer who is liable under the life policy for the purposes of the payment to that creditor or trustee of the amount to which the creditor or trustee is entitled.

(3)On receipt of a life policy delivered to a registered insurer or reinsurer under subsection (1) or (2), the registered insurer or reinsurer must—

(a)at the request of the judgment creditor or trustee referred to in subsection (1), pay to that creditor or trustee an amount equal to the part of the realisable value of the life policy to which the creditor or trustee is entitled; and

(b)pay the remaining part of the realisable value to the holder of the life policy, if at that time the full realisable value of the life policy is less than the full sum insured under that life policy, including any bonus which may have accrued in connection therewith; or

(c)at the request of such policyholder, issue to the policyholder a new life policy with the same provisions, but for a sum insured equal to the difference between—

(i)the full sum insured under the original life policy, including any bonus which may have accrued in connection therewith; and

(ii)an amount which bears the same ratio to the full sum insured under the original life policy, including any bonus which may have accrued in connection therewith, as the amount paid by the registered insurer or reinsurer to such creditor or trustee bears at that time to the full realisable value of the original life policy, whereupon the original life policy will lapse.

39. Life policies ceded or trust policies not kept up

(1)If a person who—

(a)has effected or ceded a life policy for the benefit of his or her spouse, and additionally or alternatively of his or her child or children or of any of them; or

(b)holds a life policy in trust for any other person and is obliged to pay the premiums under that policy,

is or has been unable to pay the premiums, that person may, with the consent of any person who holds or has acquired any right or interest in the life policy or if the last-mentioned person is a minor, with the consent of that minor’s guardian or of the Master of the High Court, agree with the registered insurer or reinsurer liable under such policy as set out in subsection (2).

(2)A person referred to in subsection (1) may agree with the registered insurer or reinsurer liable under the policy concerned—

(a)to convert the life policy into a paid-up life policy of a value determined in accordance with the current tariff of the registered insurer or reinsurer payable, at the time and in the manner specified in the original policy, to the person entitled to the sum insured by the original policy;

(b)to borrow from the registered insurer or reinsurer upon security of such policy sums of money as may be necessary to keep such policy in force or to revive it; or

(c)to apply the value of any bonus which may have accrued in connection with the life policy to a temporary or permanent reduction of premiums or to the payment of any premiums which have fallen due.

40. Life policies ceded or premiums paid with intent to defraud creditors

(1)Nothing contained in this Part may be construed as derogating from the power of the High Court to set aside in terms of any law relating to insolvency, a cession of a life policy made with intent to benefit any person at the expense of a creditor of the cedent.

(2)If a premium under a life policy was paid with intent to benefit any person at the expense of a creditor of the person making the payment, the High Court may order the person so benefiting to pay an amount equal to the aggregate of all premiums so paid, with interest on the amount of each premium so paid as from the date of its payment, to the creditor to whose detriment one or more premiums were paid or if the estate of that creditor is sequestrated, to the trustee of the insolvent estate of that creditor.

(3)An order of the High Court contemplated in subsection (2) has the effect of pledging, in security for payment of the amount payable under that order, the life policy in question to the creditor entitled to the payment until the payment is made, and while the life policy is so pledged that creditor may possess the life policy.

41. Application of provisions to funeral, disability and health policies

The provisions of sections 31 to 40 apply with the changes required by the context to policies of funeral, disability and health insurance.

Part 6 – PROVISIONS RELATING TO LLOYD'S

42. Definitions for this Part

In this Part, unless the context indicates otherwise—"Lloyd’s" means the association of underwriters generally known as Lloyd’s which is incorporated by the Lloyd’s Act of 1871 (34 Vict. c21), passed by the Parliament of the United Kingdom of Great Britain and Ireland;"Lloyd’s broker" means a person permitted by the Lloyd’s Council to perform any act as a broker at Lloyd’s;"Lloyd’s Council" means the council known as the Council of Lloyd’s established by the Lloyd’s Act, 1982, passed by the Parliament of the United Kingdom of Great Britain and Northern Ireland, to manage and superintend the affairs of Lloyd’s;"Lloyd’s intermediary" means a person who performs any act relating to the placing of short-term insurance business with, or the issue of policies or the collection of premiums in respect of such business or assists with claims in respect of such business for or on behalf of, a Lloyd’s broker or an underwriter at Lloyd’s, whether or not as an agent of such broker or underwriter at Lloyd’s;"Lloyd’s representative" means the person appointed in terms of section 45(1) and includes an alternate representative while acting as the Lloyd’s representative as contemplated in that section;"Lloyd’s underwriter" means an underwriting member of Lloyd’s; and"trust account" means the trust account opened pursuant to section 46(1).

43. Authorisation of underwriters at Lloyd’s

(1)Subject to this Part, Lloyd’s underwriters are authorised to carry on short-term insurance business in Namibia.

(2)NAMFISA may issue standards determining the provisions of this Act that are applicable to Lloyd’s underwriters and intermediaries and to the Lloyd’s representative.

44. Change to constitution, powers, rights, obligations and bye-laws

(1)If there is—

(a)enacted any law governing Lloyd’s whereby a material change is made to the constitution, powers, rights or obligations of Lloyd’s or of Lloyd’s underwriters; or

(b)passed any bye-law by Lloyd’s whereby the rights or obligations of Lloyd’s underwriters are materially changed,

the Lloyd’s representative must, within 21 days after the enactment of such law or the passing of such bye-law, notify NAMFISA accordingly.

(2)If NAMFISA considers that, as a result of a law or bye-law referred to in subsection (1), Lloyd’s will no longer be able to comply with the provisions of this Act, NAMFISA may take any action referred to in section 49.

45. Appointment of Lloyd’s representative

(1)The Lloyd’s Council must appoint, and at all times have, a natural person permanently resident in Namibia as its representative and another natural person so appointed as an alternate representative to act in Namibia as such representative in the event of the Lloyd’s representative for any reason not being able to act as such representative.

(2)The appointment of the Lloyd’s representative or alternate representative does not take effect unless—

(a)the Lloyd’s Council has notified NAMFISA of the appointment of a representative or alternate representative who is fit and proper within the meaning of the standards;

(b)NAMFISA has not sent a notice pursuant to subsection (3) to the effect that the appointee is not acceptable; and

(c)Lloyd’s has, subject to such conditions as may be determined by NAMFISA in the standards, opened a trust account pursuant to section 46.

(3)NAMFISA may by notice in writing within a period of 30 days after the notice to NAMFISA referred to in subsection (2)(a) indicate to the Lloyd’s Council that the representative or alternative representative appointed is not acceptable on the grounds that the appointee is considered by NAMFISA not to be a fit and proper person in accordance with the requirements of the standards.

(4)The Lloyd’s representative must—

(a)have a principal place of business in Namibia;

(b)notify NAMFISA in writing of the physical address of that principal place of business; and

(c)if that address changes, notify NAMFISA in writing not more than 30 days after the change.

(5)When a process in any legal proceedings against Lloyd’s or a Lloyd’s underwriter is required to be served, such process may be served by delivering a copy of the process at the address referred to in subsection (4).

(6)The Lloyd’s representative must ensure that Lloyd’s complies with this Act.

(7)The Lloyd’s representative and alternate representative in office at the date of commencement of this Act is deemed to have been appointed pursuant to this section.

46. Trust account to be kept by Lloyd’s representative

(1)The Lloyd’s representative must open and maintain in accordance with the requirements set out in the standards, a trust account in the name of Lloyd’s at a banking institution or building society into which must be deposited such amounts of money that are required to be deposited in terms of the standards.

(2)On an on-going basis, the Lloyd’s Council must ensure that the value of the funds in the trust account may not be less than as required under the standards.

(3)Prior to seeking exchange control approval from an authorised dealer in foreign exchange, Lloyd’s must submit to NAMFISA such particulars regarding its business in Namibia as NAMFISA may require in the standards.

47. Returns to be submitted by Lloyd’s representative

(1)The Lloyd’s Council or the Lloyd’s representative must furnish NAMFISA with returns in respect of the short-term insurance business carried on by Lloyd’s underwriters in Namibia—

(a)in the medium and form;

(b)containing the information; and

(c)by the date and within the period,

set out in the standards.

(2)Despite the provisions of subsection (1), the Lloyd’s representative must, if at any time so requested in writing by NAMFISA, submit to NAMFISA a return in respect of the trust account referred to in section 46(1) as at any other day specified by NAMFISA.

(3)Prior to making any deposit for the purposes of section 46(2) the Lloyd’s representative must submit to NAMFISA—

(a)an audited annual return relating to the insurance business of Lloyd’s in Namibia; and

(b)a return showing the calculation of the trust fund requirements for Lloyd’s in the form set out in the standards.

(4)The Lloyd’s representative must continuously maintain and furnish NAMFISA with a list of the names of all Lloyd’s intermediaries and must notify NAMFISA of any change in such list within 30 days.

48. Application of certain provisions of Chapter to Lloyd’s representative

The provisions of section 17 relating to the appointment of an auditor apply with the changes required by the context to the Lloyd’s representative in respect of the trust account referred to in section 46(1) as if the Lloyd’s representative were a registered insurer.

49. Imposition of prohibition on activities of Lloyd’s underwriters

(1)If—

(a)NAMFISA concludes that as a result of a law or bye-law referred to in section 44, Lloyd’s will no longer be able to comply with the provisions of this Act;

(b)Lloyd’s or a Lloyd’s representative fails to comply with the duties referred to in section 45; or

(c)a Lloyd’s underwriter fails to comply with that underwriter’s duties under this Part or in respect of the short-term insurance business carried on by Lloyd’s underwriters in Namibia,

NAMFISA may, subject to subsections (2) and (3), prohibit Lloyd’s underwriters or the underwriter concerned from carrying on short-term insurance business in Namibia.

(2)Before exercising the powers contemplated in subsection(1), NAMFISA must give notice in writing to the Lloyd’s Council and the Lloyd’s representative of NAMFISA’s intention to do so and the reasons for the action, and allow at least 30 days during which representations may be made in respect of the matter.

(3)If NAMFISA decides to proceed with the prohibition, NAMFISA must give notice to that effect in the Gazette specifying the date from which the prohibition will take effect.

50. Registration of Lloyd’s intermediaries

(1)A person may not be registered as a Lloyd’s intermediary unless that person is registered as an insurance intermediary under this Act.

(2)The registration, operation and duties of a Lloyd’s intermediary in Namibia must be as required by the applicable standards.

51. Claims against underwriters at Lloyd’s

(1)Any claim against an underwriter at Lloyd’s arising from a policy entered into by virtue of an act performed by a Lloyd’s intermediary is justiciable by any competent court in Namibia.

(2)In any action or other proceedings instituted in terms of subsection (1) the Lloyd’s representative may be cited as nominal defendant or respondent.

(3)The Lloyd’s representative may institute and conduct any proceedings in a competent court in Namibia as nominal plaintiff or applicant on behalf of any Lloyd’s underwriter in relation to a short-term insurance policy.

(4)When the Lloyd’s representative is cited as a nominal party, the Lloyd’s underwriter may, at any time before or after judgment, be substituted—

(a)with leave of a court; or

(b)on production to the registrar or clerk of a competent court of an affidavit setting out the true parties and their normal citation, if a copy has previously been furnished to the other party.

52. Payment of claims against underwriters at Lloyd’s

(1)Any claim against a Lloyd’s underwriter arising from an insurance policy entered into by a Lloyd’s intermediary may be disbursed from moneys standing to the credit of the trust account referred to in section 46(1).

(2)If the payment of a claim contemplated by subsection (1) results in the said trust account falling to a level below that determined in terms of section 46(2), the Lloyd’s representative must—

(a)immediately notify NAMFISA of such fact; and

(b)cause the trust account to be restored to the credit level required by the standards within 14 days from the date on which the shortfall occurred.

(3)On the production to him or her of—

(a)a writ of execution issued by a court against a Lloyd’s underwriter in respect of a claim contemplated in subsection (1); or

(b)a certificate issued by NAMFISA that the amount stated therein is lawfully due by Lloyd’s to NAMFISA in respect of levies or fees,

the Lloyd’s representative must immediately cause the amount due by Lloyd’s to be paid out from the money standing to the credit of the said trust account to the creditor concerned, and the provisions of subsection (2) apply to such payment with the changes required by the context.

Part 7 – AGENTS AND BROKERS

53. Definitions for this Part

In this Part, unless the context indicates otherwise—"insurance agent" means a person who, on behalf of an insurer, or acting on behalf of an insurer, deals directly with the public in soliciting insurance or acting or aiding in any manner in connection with the negotiation, continuance or renewal of insurance and, where applicable, includes a corporate insurance agent;"insurance broker" means a person who, on behalf of a member of the public, deals directly with an insurer or a person acting on behalf of an insurer, in arranging insurance or acting or aiding in any manner in connection with the negotiation and, continuance or renewal of insurance or provides consulting services with respect to insurance or insurance claims and, where applicable, includes a corporate insurance broker and a person whose activities include the placing of reinsurance, commonly known as a reinsurance broker;"corporate insurance agent" means an entity that is an insurance agent;"corporate insurance broker" means an entity that is an insurance broker;"registered corporate insurance broker" means a corporate insurance broker that is registered pursuant to section 59;"registered insurance agent" means an insurance agent who is registered pursuant to section 55;"registered insurance broker" means a broker that is registered pursuant to section 59, and includes a registered corporate insurance broker;"registered reinsurance broker" means a reinsurance broker that is registered pursuant to section 59 and, where applicable, includes a registered corporate reinsurance broker;"reinsurance broker" means a person who on behalf of any insurer negotiates reinsurance business with one or more reinsurers.

54. Unregistered person may not act as agent or broker

(1)A person may not, for compensation, commission or any other thing of value, carry on any of the activities of an insurance agent in Namibia except, in accordance with and to the extent authorised by an insurance agent’s registration or a corporate insurance agent’s registration issued under section 55 or where the person is deemed to be registered under section 60.

(2)A person may not, for compensation, commission or any other thing of value, carry on any of the activities of an insurance broker or a reinsurance broker in Namibia except, in accordance with and to the extent authorised by an insurance broker’s or a reinsurance broker’s registration or a corporate insurance broker’s registration issued under section 59 or where the person is deemed to be registered under section 60.

(3)Without limiting the application of any other remedies available under this Act, NAMFISA may direct a person acting in violation of subsection (1) or (2) to cease and desist from such conduct but must give that person a period of time within which to apply for the requisite registration upon that person giving an undertaking to comply with the direction.

(4)If a person referred to in subsection (3)—

(a)does not obtain registration within the period; or

(b)violates the undertaking,

referred to in that subsection, that person becomes ineligible to apply for registration until such time as NAMFISA may waive that ineligibility in writing.

(5)Despite subsections (1) and (2), an insurance agent or broker may not charge any commission or other thing of value or receive any compensation for having rendered a service to any person except the commission determined in the standards.

(6)A person who contravenes or fails to comply with subsection (1), (2) or (5) commits an offence and is liable on conviction to a fine not exceeding N$5 000 000 or to imprisonment for a period not exceeding 10 years or to both such fine and such imprisonment.

55. Registration as insurance agent and renewal of registration

(1)A registered insurer may apply to NAMFISA for the registration of certain entities as corporate insurance agents by submitting a copy of the list maintained by that registered insurer of those entities, together with any required registration fee for each such entity (hereafter called "listed entity" in this section and section 56).

(2)A registered insurer may apply to NAMFISA for the registration of certain individuals as insurance agents by submitting a copy of the list maintained by the insurer of those persons, together with any required registration fee for each such individual (hereafter called "listed individual" in this section and section 56).

(3)A registered insurer must have in place a code of conduct and applicable systems relevant to listed individual insurance agents employed by it or by its corporate insurance agents in order to be reasonably satisfied with respect to each of those insurance agents that—

(a)the individual is at least 18 years of age;

(b)the individual has met the requirements for an insurance agent that may be included in the standards from time to time;

(c)the individual is not in a position to offer inducement or use coercion or undue influence in order to control, direct or secure business;

(d)the individual has not been refused registration, authorisation or acceptance or had such registration, authorisation or acceptance suspended or revoked under this Act or any other applicable financial services law;

(e)the individual has not been convicted of an offence the nature of which renders him or her, in the opinion of NAMFISA, unfit to hold a registration under this Act;

(f)the individual is fit and proper within the meaning of the standards;

(g)there are reasonable grounds for believing that the individual will carry on with integrity and honesty the activities of an insurance agent;

(h)the individual has met, and there is no reason to believe that the individual will not be able to meet, any other requirements of this Act, and any instructions and guidelines issued by NAMFISA under this Act or issued by the registered insurer concerned that apply to insurance agents;

(i)there is no reason to believe that the individual is likely to engage in conduct of a kind identified in the standards as misconduct;

(j)the individual is ordinarily resident in Namibia and is in a position to comply with the law relating to his or her residency in Namibia and with any other applicable laws of Namibia; and

(k)any required fee has been paid.

(4)A registered insurer must have in place a code of conduct and applicable systems relevant to its individual listed insurance agents in order to be reasonably satisfied with respect to each of those insurance agents that—

(a)the individual is at least 18 years of age;

(b)the individual has met the requirements for an insurance agent that may be included in the standards from time to time;

(c)the individual is not in a position to offer inducement or use coercion or undue influence in order to control, direct or secure business;

(e)the individual has not been convicted of an offence the nature of which renders him or her, in the opinion of NAMFISA, unfit to hold a registration under this Act;

(f)the individual is fit and proper within the meaning of the standards;

(g)there are reasonable grounds for believing that the individual will carry on with integrity and honesty the activities of an insurance agent;

(i)there is no reason to believe that the individual is likely to engage in conduct of a kind identified in the standards as misconduct;

(j)the individual is ordinarily resident in Namibia and is in a position to comply with the law relating to his or her residency in Namibia and with any other applicable laws of Namibia; and

(k)any required fee has been paid.

(5)A registered insurer must, in addition to complying with subsection (3) or (4), in respect of each listed entity that is to be registered as a corporate insurance agent ensure that—

(a)the entity is registered in accordance with the relevant law requiring the registration of such entities in Namibia;

(b)it has in its possession the following information or documents in respect of the entity:

(i)certified copy of the memorandum and articles of association or founding statements, constitution or any other founding documents of the entity;

(ii)certified copies of share certificates or members’interest or any other documents proving ownership; and

(iii)any other document that the applicant considers relevant or that NAMFISA may require;

(c)the entity has met the requirements for a corporate insurance agent that may be included in the standards from time to time;

(d)the individuals who will carry on activities of the kind to which the registration relates on behalf of the entity will be registered as insurance agents;

(e)the entity is not in a position to offer inducement or use coercion or undue influence in order to control, direct or secure business;

(f)the entity has not been refused registration, authorisation or acceptance or had such registration, authorisation or acceptance suspended or revoked under this Act or any other applicable financial services law;

(g)there are reasonable grounds for believing that the entity will carry on with integrity and honesty the activities of a corporate insurance agent;

(h)the entity has met, and there is no reason to believe that the entity will not be able to meet, any other requirements of this Act, and any instructions and guidelines issued by NAMFISA under this Act or issued by the registered insurer concerned that apply to corporate insurance agents;

(i)there is no reason to believe that the entity is likely to engage in conduct of a kind identified in the standards as misconduct; and

(j)any required fee has been paid.

(6)A registered insurer must provide NAMFISA with such other information and material regarding its listed individuals as may be specified in the standards, and in the case of a listed entity, the insurer must provide NAMFISA with such other information and material regarding that entity as may be specified in the standards.

(7)NAMFISA must register each entity and each individual whose name appears on the list of corporate insurance agents or insurance agents maintained by the registered insurer.

(8)A registered insurer that has submitted a list to NAMFISA pursuant to subsection (1) or (2) must submit to NAMFISA an update of that list when there has been an addition or deletion, together with—

(a)in the case of additional listed entities to be registered that have been added to the list referred to in subsection (1); or

(b)in the case of additional listed individuals to be registered that have been added to the list referred to in subsection (2),

the required fee for each additional listed entity or listed individual and the information and material referred to in subsection (5), and upon receipt by NAMFISA of an updated list containing the names of additional listed entities and listed individuals, the provisions of subsections (6) and (7) apply.

(9)If a registered insurer removes an entity from the list referred to in subsection (1) or removes an individual from the list referred to in subsection (2), it must, at the same time when submitting the update of the list as required by subsection (8), provide NAMFISA with a statement indicating the reason that the entity or individual has been removed from the list.

(10)A registered insurer may not remove a listed entity or an individual from the list as referred to in subsection (9) unless the insurer has given the entity or individual concerned the reasons for the proposed removal and a reasonable opportunity to be heard.

(11)The term of registration as an insurance agent or a corporate insurance agent under this section expires on March 31 of each year or on such other date as NAMFISA may specify, but if the appropriate renewal fee as determined by NAMFISA in respect of each insurance agent is paid to NAMFISA in the manner set out in the standards, the registration must, subject to compliance with any requirements that may be set out in the standards, be renewed for a period of 12 months as from the expiry date.

(12)The renewal fee is payable within the period set out in the standards, and any payment received after that period bears interest at a rate determined by NAMFISA in the standards, which rate may not exceed the rate prescribed for this purpose.

(13)If—

(a)the renewal fee is not received within the period contemplated in subsection (12); or

(b)the requirements of the standards referred to in subsection (11) have not been complied with,

NAMFISA may not renew the registration of the insurance agent or corporate insurance agent and must remove or direct the registered insurer to remove the name of the insurance agent or corporate insurance agent whose renewal fee was not paid or in respect to whom the requirements of the standards have not been complied with from the list kept by NAMFISA or submitted to NAMFISA.

(14)A person who continues to operate, or to engage in, the business of an insurance agent or a corporate insurance agent after the non-renewal of registration under subsection (13), commits an offence and is liable on conviction to a fine not exceeding N$5 000 000 or to imprisonment for a period not exceeding 10 years or to both such fine and such imprisonment.

56. Remedial action

(1)NAMFISA may take any of the actions set out in subsection (2), if NAMFISA acting reasonably, finds that any of the following circumstances exist with respect to a registered corporate insurance agent or a registered insurance agent—

(a)in the case of a listed individual, any of the requirements referred to in section 55(3) or (4) have not been met;

(b)the copy of the list submitted under section 55 or the accompanying information and material contained information concerning the listed entity or individual that was not materially accurate or omitted information that was materially relevant;

(c)the listed entity or individual no longer meets the requirements for an insurance agent;

(d)the listed entity or individual has suspended activities for a period of at least 12 months;

(e)the listed entity or individual is not in compliance with a requirement of this Act; or

(f)the listed entity or individual has engaged in conduct of the kind that has been identified in the standards as misconduct.

(2)If NAMFISA is satisfied that any of the circumstances described in subsection (1) exist, NAMFISA may take or direct the registered insurer to take remedial action including, without limitation—

(a)directing the insurer to provide further information with respect to the listed entity or individual;

(b)directing the insurer to provide further training for the listed entity or individual;

(c)directing the insurer to take disciplinary action against the listed entity or individual;

(d)directing the insurer to make changes to the code of conduct and systems referred to in section 55(3) or (4);

(e)requiring an undertaking from the listed entity or individual pursuant to section 436;

(f)requiring an undertaking from the insurer pursuant to section 436;

(g)directing the listed entity or individual to undertake specific actions or refrain from specific actions pursuant to section 439(4)(c);

(h)directing the insurer to undertake specific actions or refrain from specific actions pursuant to section 439(4)(c); or

(i)imposing on the insurer any penalty that may be specified in the standards, if the insurer has been negligent in satisfying itself with respect to the provisions of section 55(3) or (4).

(3)If on receipt of evidence that the required action has been taken pursuant to subsection (2), NAMFISA acting reasonably, finds that any of the circumstances referred to in subsection (1) continue to exist, NAMFISA may direct the insurer to remove the name of the listed entity or individual from the list referred to in section 55(1), (2) or (8).

(4)Before directing that the name of a listed entity or individual be removed from a list pursuant to subsection (3), NAMFISA must give both parties a reasonable opportunity to be heard.

(5)If a registered insurer fails to remove the name of a listed entity or individual from the list when required to do so by NAMFISA, NAMFISA may, after giving the listed entity or individual a reasonable opportunity to be heard, itself remove the name of the entity or individual from the list.

(6)If the name of a listed entity or individual is removed from a list by an insurer or NAMFISA, the registration of that entity or individual as an insurance agent or a corporate insurance agent is cancelled and the entity or individual may not act as an insurance agent or a corporate insurance agent or be included by a registered insurer on any list a copy of which is submitted under section 55 for such period as NAMFISA may determine.

(7)A person who continues to operate, or to engage in, the business of an insurance agent or a corporate insurance agent after the cancellation of registration under subsection (6), commits an offence and is liable on conviction to a fine not exceeding N$5 000 000 or to imprisonment for a period not exceeding 10 years or to both such fine and such imprisonment.

57. Application for registration as insurance broker

(1)An individual or entity may, in accordance with subsection (2), make an application for registration as an insurance broker or a reinsurance broker or a corporate insurance or reinsurance broker to NAMFISA.

(2)An application for registration as an insurance broker or a reinsurance broker or a corporate insurance or reinsurance broker must be—

(a)made in the manner and form required by the standards;

(b)where applicable, include the information with respect to the principal office and principal officer required by the standards;

(c)accompanied by the documents and other information required by the standards;

(d)accompanied by such further information that NAMFISA on reasonable grounds may require in any particular case;

(e)made subject to and in accordance with any other applicable provision of this Act; and

(f)accompanied by the required fee.

58. Registration requirements

(1)Before approving an application and registering an individual as an insurance broker or a reinsurance broker, NAMFISA must be satisfied that the requirements of subsections (3) and (4) have been met and that, in the case of an individual applicant—

(a)the individual is at least 18 years of age;

(b)the individual has met the requirements for registration that may from time to time be included in the standards;

(c)the individual is not in a position to offer inducement or use coercion or undue influence in order to control, direct or secure insurance business;

(e)the individual has not been convicted of an offence the nature of which renders him or her, in the opinion of NAMFISA, unfit to hold a registration under this Act;

(f)the individual is fit and proper within the meaning of the standards;

(g)there are reasonable grounds for believing that the individual will carry on with integrity and honesty the activities of an insurance broker;

(h)the individual has met, or will be able to meet, any other requirements of this Act and any instructions and guidelines issued by NAMFISA under this Act that apply to insurance brokers or reinsurance brokers;

(i)the individual does not, and will not be likely to, engage in conduct of a kind identified in the standards as misconduct;

(j)the individual is ordinarily resident in Namibia and is in a position to comply with the law relating to his or her residency in Namibia and with any other applicable laws of Namibia; and

(k)any required fee has been paid.

(2)Before approving an application and registering an entity as a corporate insurance or reinsurance broker, NAMFISA must be satisfied that the requirements of subsections (3) and (4) have been met and that—

(a)the individuals who will carry on activities of the kind to which the registration relates on behalf of the entity will be registered as insurance brokers or reinsurance brokers;

(b)the entity has met, or will be able to meet, the requirements of section 72;

(c)if applicable, the entity is registered in accordance with the relevant law requiring the registration of such entities in Namibia; and

(d)any required fee has been paid.

(3)Before approving the application and registering the applicant as an individual insurance broker or a corporate insurance or reinsurance broker, NAMFISA must be satisfied that—

(a)where the applicant is an entity—

(i)every shareholder or other owner that controls the applicant, and every director, the principal officer and other officers of the applicant and, where applicable, members of any board of trustees or other board are fit and proper within the meaning of the standards;

(ii)the memorandum, articles and rules or other founding documents of the applicant are not inconsistent with the provisions of this Act;

(iii)the direct or indirect control of the entity is not likely to be contrary to the interest of consumers of the financial services concerned; and

(iv)the applicantwill be in a position to ensure that its organisational or group structure will not be such as to hinder effective supervision by NAMFISA;

(b)doing so is not contrary to—

(i)this Act; or

(ii)the public interest;

(c)the applicant has the attributes reasonably necessary and adequate to—

(i)provide the financial services concerned with professional integrity, prudence, proper skill and due diligence;

(ii)maintain a sound financial position and not cause or further instability in the financial system of Namibia; and

(iii)comply with this Act;

(d)the name under which the applicant proposes to conduct business, or a translation, shortened form or derivative of that name is not in contravention of section 391;

(e)the applicant has submitted all other information which, in the opinion of NAMFISA, is necessary to assess the application, and such information has been found satisfactory by NAMFISA; and

(f)the applicant has complied and will continue to comply with any other requirements contained in this Act or in the standards which apply to the applicant.

(4)In addition to the applicable requirements for a registration set out in subsections (1), (2) and (3) if an application for a registration is made after a date determined by the Minister by notice in the Gazette an individual or entity may not be granted a registration as an insurance broker or a reinsurance broker or a corporate insurance or reinsurance broker, unless NAMFISA is satisfied that—

(a)an insurance policy is in place providing errors and omissions coverage in respect of the activities of the individual or entity as broker, in a form approved by NAMFISA and in an amount that has been prescribed in respect of any one occurrence, with extended coverage for fraudulent acts or some other financial guarantee affording comparable protection acceptable to NAMFISA; and

(b)if the individual or entity will have employees carrying on the activities of a broker, a fidelity insurance policy is in place providing coverage in respect of losses arising from dishonesty of employees, in a form approved by NAMFISA and in an amount that has been prescribed in respect of any one occurrence.

59. Registration and renewal of registration

(1)If NAMFISA is satisfied that the applicant complies with the requirements of section 58, NAMFISA must register the applicant as an insurance broker or a reinsurance broker or a corporate insurance or reinsurance broker, subject to any conditions which NAMFISA may consider appropriate pursuant to subsection (4).

(2)The registration referred to in subsection (1) must specify—

(a)the principal office of the applicant in Namibia;

(b)the places in Namibia from which the applicant may operate.

(3)Upon registration of an applicant NAMFISA must issue to the applicant a certificate of registration in a form provided for in the standards.

(4)NAMFISA may impose such conditions on the registration of the applicant as it considers necessary having regard, without limitation, to all the facts and information available to NAMFISA pertaining to the applicant, and any guidelines issued by NAMFISA under this Act.

(6)An insurance broker or a reinsurance broker or a corporate insurance or reinsurance broker must comply with the conditions subject to which it was registered.

(7)The term of registration as an insurance broker, a reinsurance broker or a corporate insurance or reinsurance broker under this section expires on March 31 of each year or on such other date as NAMFISA may specify, but if the appropriate renewal fee as determined by NAMFISA in respect of each insurance or reinsurance broker is paid to NAMFISA in the manner set out in the standards, the registration must subject to compliance with any requirements that may be set out in the standards, be renewed for a period of 12 months as from the expiry date.

(8)The renewal fee is payable within the period set out in the standards, and any payment received after that period bears interest at a rate determined by NAMFISA in the standards, which rate may not exceed the rate prescribed for this purpose.

(9)If—

(a)the renewal fee is not received within the period contemplated in subsection (8); or

(b)the requirements of the standards referred to in subsection (7) have not been complied with,

NAMFISA may not renew the registration of an insurance broker, a reinsurance broker, corporate insurance or reinsurance broker whose renewal fee was not paid or in respect to whom the requirements of the standards have not been complied with.

(10)A person who continues to operate, or to engage in, the business of an insurance broker or a reinsurance broker after the non-renewal of registration under subsection (9), commits an offence and is liable on conviction to a fine not exceeding N$5 000 000 or to imprisonment for a period not exceeding 10 years or to both such fine and such imprisonment.

60. Agents, brokers previously registered

(1)An agent or broker who was registered under the Long-term Insurance Act or the Short-term Insurance Act on the date of commencement of this Part is deemed to be registered under this Act as an insurance agent, insurance broker, a corporate insurance broker or a reinsurance or corporate reinsurance broker, as applicable.

(2)Despite subsection (1), a person or an entity referred to in that subsection must, within 12 months after the date of commencement of this Chapter, make an application to NAMFISA pursuant to section 55 or 57 for registration as an insurance agent, insurance broker, a corporate insurance broker or a reinsurance or corporate reinsurance broker, as applicable.

(3)If a person or an entity referred to in subsection (1) fails to make an application to NAMFISA for registration within the period referred to in subsection (2), the deemed registration of that person or entity is cancelled.

(4)A person who continues to operate, or engage in, the business of an insurance agent or an insurance broker or a reinsurance broker after the cancellation of registration under subsection (3), commits an offence and is liable on conviction to a fine not exceeding N$5 000 000 or to imprisonment for a period not exceeding 10 years or to both such fine and such imprisonment.

61. Principal office and principal officer

(1)Every registered insurance or reinsurance broker or corporate insurance or reinsurance broker must—

(a)have a principal office in Namibia where it must hold and maintain the documents referred to in the standards; and

(b)where applicable, appoint to be its principal officer in Namibia, a fit and proper person within the meaning of the standards, who is—

(i)a Namibian citizen or permanent resident; and

(ii)resident in Namibia.

(3)After the appointment of a principal officer pursuant to subsection (1)(b), a registered insurance or reinsurance broker or corporate insurance or reinsurance broker must, within the period set out in the standards, in writing notify NAMFISA of the appointment.

(4)NAMFISA may, on the grounds that a principal officer is not a fit and proper person within the meaning of the standards, and after giving the registered insurance or reinsurance broker or corporate insurance or reinsurance broker and the principal officer a reasonable opportunity to be heard, direct the registered insurance or reinsurance broker or corporate insurance or reinsurance broker to appoint some other person to be the principal officer of the registered insurance or reinsurance broker or corporate insurance or reinsurance broker.

(5)Whenever a principal officer resigns or the appointment of a principal officer is terminated by a registered insurance or reinsurance broker or corporate insurance or reinsurance broker or by the expiry of a contract of employment, the registered insurance or reinsurance broker or corporate insurance or reinsurance broker must, within the period set out in the standards, in writing notify NAMFISA and submit to NAMFISA a written statement of the reasons for the termination or, in the opinion of the registered insurance or reinsurance broker or corporate insurance or reinsurance broker, the reasons for the resignation.

(6)The principal officer of a registered insurance or reinsurance broker is authorised to act on behalf of the insurance or reinsurance broker to ensure compliance with this Act, and in any case where a person, including NAMFISA, communicates with that insurance or reinsurance broker, that person may do so by addressing the communication to the principal officer.

(7)Process in any legal proceedings may be served on an insurance broker or a reinsurance or corporate broker by serving a copy of the process at its principal office.

(8)A person who contravenes or fails to comply with subsection (3) commits an offence and is liable on conviction to a fine not exceeding N$1 000 000 or to imprisonment for a period not exceeding two years or to both such fine and such imprisonment.

62. Accounts

A registered insurance or reinsurance broker or corporate insurance or reinsurance broker must keep in Namibia proper accounts of, and financial information relating to, its insurance business that comply with the requirements of the standards.

63. Insurance to be in place

Every registered insurance or reinsurance broker or corporate insurance or reinsurance broker must have in place the insurance referred to in section 58(4) to the extent applicable to it, as from a date determined by the Minister by notice in the Gazette.

64. Only one registration

(1)A person may not be registered as an insurance agent and an insurance broker at the same time.

(2)Subject to subsection (3), a registered insurance agent may only be registered as either an agent for short-term insurance or an agent for long-term insurance and may not act as agent for more than one registered insurer or represent himself or herself to the public by advertisement or otherwise as the registered insurance agent of more than one registered insurer.

(3)Despite subsections (1) and (2)—

(a)if an insurer is registered under this Chapter for long-term insurance, and an affiliate of that registered insurer is registered under this Chapter for short-term insurance, an agent of that first insurer who has been registered for long-term insurance pursuant to section 55, may, on application by that second insurer, obtain a second registration as an agent for short-term insurance provided he or she meets all the other requirements of this Act; and

(b)if an insurer is registered under this Chapter for short-term insurance, and an affiliate of that registered insurer is registered under this Chapter for long-term insurance, an agent of that first insurer who has been registered for short-term insurance pursuant to section 55, may, on application by that second insurer, obtain a second registration as an agent for long-term insurance provided he or she meets all the other requirements of this Act.

65. Application for cancellation or variation of registration

(1)A registered insurance or reinsurance broker or corporate insurance or reinsurance broker may at any time, apply to NAMFISA for cancellation of a registration granted pursuant to section 59 or for a variation of the conditions subject to which that registration was granted.

(2)An application made under subsection (1) must be—

(a)made in the manner and form required by the standards;

(b)accompanied by the documents and other information required by the standards;

(c)accompanied by such further information that NAMFISA on reasonable grounds may require in any particular case; and

(d)accompanied by the required fee.

(a)the name of the applicant;

(b)either—

(i)the reasons for the proposed cancellation; or

(ii)the nature of the proposed variation; and

(c)the period within which objections to the application may be lodged with NAMFISA.

(4)Section 59 applies with the changes required by the context to an application for a variation of conditions referred to in subsection (1).

(a)cancel the registration; or

(b)vary the conditions of registration, including the imposition of additional conditions.

(6)NAMFISA must make public any cancellation of registration or variation of conditions of registration under subsection (5) and the reasons for the cancellation or variation, by notice in the Gazette and by means of any other appropriate public statement.

66. Cancellation or variation of registration

(1)NAMFISA may take any of the actions set out in subsection (2), if NAMFISA acting reasonably, finds that any of the following circumstances exist with respect to a registered insurance or reinsurance broker or corporate insurance or reinsurance broker:

(a)it has made a material misrepresentation or failed to provide information that was materially relevant in its application for registration;

(b)it has failed to comply with this Act;

(c)it no longer meets the requirements for registration;

(d)it has provided financial services without professional integrity, prudence, proper skill and due diligence;

(e)it is in an unsound financial position;

(f)it has failed to comply with a directive, request or requirement of NAMFISA issued under this Act;

(g)it has failed to give effect to a decision of the Appeal Board;

(h)it has ceased to operate or has failed to commence operating within a reasonable time after being registered;

(i)it is involved in a financial crime;

(j)in the case of an individual, the individual no longer meets the fit and proper requirements within the meaning of the standards or has engaged in conduct identified in the standards as misconduct; or

(k)in the case of a corporate insurance or reinsurance broker or corporate insurance or reinsurance broker, any director, the principal officer, other officer or member of a board no longer meets the fit and proper requirements within the meaning of the standards or has engaged in conduct identified in the standards as misconduct.

(2)If NAMFISA is satisfied that any of the circumstances described in subsection (1) exist, NAMFISA may take any of the following actions with respect to the registered insurance broker or reinsurance broker or corporate insurance or reinsurance broker—

(a)cancel its registration;

(b)vary the conditions of its registration, including the imposition of additional conditions; or

(c)take any other steps that NAMFISA may consider necessary or advisable.

(3)NAMFISA must give notice to the registered insurance or reinsurance broker or corporate insurance or reinsurance broker of the intention of NAMFISA to take any action referred to in subsection (2), together with the reasons for taking the action, and must give the registered insurance or reinsurance broker or corporate insurance or reinsurance broker a reasonable opportunity to be heard by specifying a period of not less than 21 days during which the registered insurance or reinsurance broker or corporate insurance or reinsurance broker may make representations to NAMFISA on the matter.

(4)Subject to such conditions as NAMFISA may impose, NAMFISA may provisionally suspend the registration or take control of the assets of a registered insurance or reinsurance broker or corporate insurance or reinsurance broker without giving notice and an opportunity to be heard pursuant to subsection (3) if NAMFISA is satisfied on reasonable grounds that it is urgently necessary to do so in order to prevent or mitigate damage to the interests of financial institutions, financial intermediaries, their clients or the financial system of Namibia, but NAMFISA must—

(a)give the registered insurance or reinsurance broker or corporate insurance or reinsurance broker the notice and an opportunity to be heard and make representations as soon as reasonably possible; and

(b)having considered any representations received, determine whether the provisional suspension should be continued until further conditions can be imposed or registration cancelled.

(5)On the cancellation of the registration of an insurance or a reinsurance broker under section 60(3), section 65, subsection (2)(a) or any other applicable provision of this Act, the insurance or reinsurance broker must be wound-up in accordance with the requirements of Chapter 10, and NAMFISA must take such steps and may impose such conditions as are necessary in the circumstances, which steps may include the transfer of the business of the insurance or reinsurance broker to another insurance or reinsurance broker, as appropriate, but no distribution of the assets of the insurance or reinsurance broker may be made without the prior approval of NAMFISA.

(6)NAMFISA must make public any suspension or cancellation of registration, variation of conditions of registration or any steps other taken under this section and the reasons for the suspension, cancellation, variation or steps, by notice in the Gazette and by means of any other appropriate public statement.

(7)A person who—

(a)continues to operate, or engage in, the business of insurance or reinsurance broker after the cancellation of registration under section 60(3), section 65(5)(a), subsection (2)(a) or any other applicable provision of this Act or after suspension of registration under subsect (4) ; or

(b)fails to comply with a condition imposed by NAMFISA under subsection (4),

commits an offence and is liable on conviction to a fine not exceeding N$5 000 000 or to imprisonment for a period not exceeding 10 years or to both such fine and such imprisonment.

67. Confirmation of cover by registered brokers

(1)After placing a policy of insurance, every registered insurance or reinsurance broker must ensure that the policyholder concerned is, within the period specified in the standards, provided with a policy or a certificate of coverage certifying that the

Financial Institutions and Markets Act, 2021

Act 2 of 2021

Financial Institutions and Markets Act, 2021

Act 2 of 2021

Chapter 1PRELIMINARY

1. General definitions

2. Objects of Act

3. Control over corporate bodies

Chapter 2INSURANCE

Part 1 – GENERAL

4. Definitions for this Chapter

5. Prohibitions

6. Restrictions on use of certain designations

7. Limitations

8. Classes of insurance

Part 2 – REGISTRATION

9. Application for registration

10. Registration requirements

11. Registration

12. Insurers and reinsurers previously registered

13. Application for cancellation or variation of registration

14. Cancellation or variation of registration

Part 3 – ADMINISTRATION

15. Principal office and principal officer

16. Accounts

17. Appointment of auditor

18. Appointment of valuator

Part 4 – CONDUCT OF INSURANCE BUSINESS

19. Conduct of insurance business

20. Financially sound position

21. Restrictions on pledging assets and borrowing

22. Actuarial soundness of policies

23. Prohibition against tied selling

24. Policies: miscellaneous provisions

25. Publication of statements of capital

26. Prohibition against securing business for unregistered person

27. Restriction on acquisition of shares or other interests

28. Participating policies

29. Plain language

30. Misleading, false and deceptive statements: consequences of conviction

Part 5 – CERTAIN LONG-TERM POLICIES

31. Life policies: minors

32. Life policies: married persons

33. Persons married in community of property

34. Life policy on own life: protection during life

35. Life policy on own life: protection on death

36. Life policies: spouses and children

37. Protected life policies: selection for realisation

38. Protected life policies: partial realisation

39. Life policies ceded or trust policies not kept up

40. Life policies ceded or premiums paid with intent to defraud creditors

41. Application of provisions to funeral, disability and health policies

Part 6 – PROVISIONS RELATING TO LLOYD'S

42. Definitions for this Part

43. Authorisation of underwriters at Lloyd’s

44. Change to constitution, powers, rights, obligations and bye-laws

45. Appointment of Lloyd’s representative

46. Trust account to be kept by Lloyd’s representative

47. Returns to be submitted by Lloyd’s representative

48. Application of certain provisions of Chapter to Lloyd’s representative

49. Imposition of prohibition on activities of Lloyd’s underwriters

50. Registration of Lloyd’s intermediaries

51. Claims against underwriters at Lloyd’s

52. Payment of claims against underwriters at Lloyd’s

Part 7 – AGENTS AND BROKERS

53. Definitions for this Part

54. Unregistered person may not act as agent or broker

55. Registration as insurance agent and renewal of registration

56. Remedial action

57. Application for registration as insurance broker

58. Registration requirements

59. Registration and renewal of registration

60. Agents, brokers previously registered

61. Principal office and principal officer

62. Accounts

63. Insurance to be in place

64. Only one registration

65. Application for cancellation or variation of registration

66. Cancellation or variation of registration

67. Confirmation of cover by registered brokers

Chapter 1
PRELIMINARY

Chapter 2
INSURANCE