MEDIA RELEASE
15 September 2014
2014 ANNUAL REPORT
The Authority is pleased to inform and at the same time it is gratified by the unwavering support
from all its stakeholders in enabling the successful compilation of the 2014 NAMFISA Annual Report.
The theme for the current report, as depicted in the background pictures, is “Growth” and this takes
off from the “the New Dawn” which captivated the background subject of the PMR award winning,
2013 annual report. The NAMFISA 2014 Annual Report theme symbolises the significant strides
made in respect of the Authority’s three-pronged reform process i.e. Regulatory Reform;
Supervisory Reform; and Institutional Reform.
This press release provides highlights on the activities of the Authority for the reporting period
ended 31 March 2014, and the details are contained in the 2014 Annual report.
In general, this 2014 Annual Report contains noticeable improvement on the previous NAMFISA
annual reports, which include among others:





Timely production – this report is produced much earlier than previous annual reports and
well within the timeline of 30 September;
Transparency - the report is more transparent on the activities of the Authority;
Depth and details - the report expanded more on the supervisory activities under taken
during the reporting period and the inclusion of the support functions of the Authority;
People centric – the report depicts all the Authority staff which enhances ownership by
the entire staff of the Authority; and
Look and feel - the enhanced look and feel.
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The following are the key highlights in the 2014 NAMFISA Annual Report:
STAFF COMPLIMENT
The staff complement stood at 107 on 31 March 2014, which was 31.8% up from 73 during the
previous financial year. Compared to 2010, the staff compliment increased significant from about
50 employees and it is envisaged to grow to 150 by 31 March 2015.
The Authority awarded bursaries to eight (8) deserving students to study in the fields of economics,
accounting, commerce, law, finance and mathematical science.
STRATEGY AND PERFORMANCE FOR THE REPORTING PERIOD ENDED 31 MARCH 2014
The Authority’s Strategy contains for key areas of strategic intent which give rise to eight strategic
of objectives. The strategic intent is a follows:




A sound regulatory and supervisory framework that promotes a safe, stable, and trusted
financial sector in Namibia;
Well-informed and financially literate consumers of financial products and services in
Namibia
A well-managed, efficient and effective regulator of financial institutions in Namibia; and
A reliable source of data, research, and policy advice on financial institutions in Namibia
PERFORMANCE OVER THE FINANCIAL YEAR 2013/2014
The Board set priority areas for the 2013/14 financial year towards the end of the financial year
2012/2013. The priorities are set to steer the Authority towards achieving its strategic goals and
objectives. Priority areas, with focus on milestones and strategic initiatives are as summarized
below:
a) Prudently manage financial resources:
The Authority’s total Income for the year ended 31 March 2014 was N$95.8 million and
expenditure was N$73.3 million generating gross surplus income of N$22.5 million. The total
assets of the Authority increased to N$247.7 million, compared to N$217.1 million in the
previous year.
Unqualified financial statements were produced within the prescribed statutory period of three
(3) months.
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b) Build productive relationships with key stakeholders
In our effort to build productive relationship, the Authority successfully hosted conference for
Committee of Insurance, Securities and Non-banking financial Authorities (“CISNA”), which is a
committee of regulatory authority in SADC.
The Authority regularly hosts industry forum and CEO’s dinners with industry players to discuss
pertinent issues related to the financial sector.
Throughout the year, the Authority had several meetings with Bank of Namibia and major of
which had to do with financial stability, and monitoring and evaluation of the Namibia financial
sector strategy.
Also, the Authority in fulfilling one of its core functions as an advisor to the Minister of Finance
had a number of meetings at the Ministry of Finance to give updates on major regulatory and
supervisory developments.
The Authority continues to participate in regional and international organisations such as the
International Association of Insurance Supervisors (“IAIS”) International Association of Pension
Supervisors (“IOPS”), Eastern and Southern Africa Anti-Money Laundering Group (“ESSAAMLG”).
During the reporting period, the Authority conducted a perception survey in respect to its
engagement with the stakeholders and the results of the survey indicated that greater than 80%
of the respondents perceived NAMFISA engagement as positive.
The interaction with the media has enhanced significantly which is evident in the improved
response times to media queries and press conferences to inform the broader public.
c) Produce data, research and policy advice
The Authority collated and published data received from regulated entities in the Quarterly
Statistical Bulletin, Annual Report 2013, Financial Stability Reports and other smaller reports
on activities of NAMFISA. The Financial Stability Reports are produced jointly with the Bank of
Namibia (“BON”). These publications /reports have continued to be appreciated by the
industries and other stakeholders.
The NAMFISA Annual report 2013 received Africa award from PMR Africa as the best annual
report in Namibia.
The Authority’s policy advisory work was spread across the following areas:



NAMFISA and Financial Institutions and Markets (FIM) Bills
Financial Services Ombudsman Bill
Consumer Credit Position Paper
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
Standards and regulations to be issued under the FIM bill
d) Educate and bring awareness to the consumers of financial services and products
The Authority has been running a consumer financial education programme that sought to
educate, inform and create awareness among users of financial services and products to
enable them to make informed decisions.
To this end the Authority continued to produce a quarterly NAMFISA Consumer Bulletin which
is well sought after publication. A total of 60,000 copies of the NAMFISA Consumer Education
Bulletin, per edition, were produced and distributed during the year.
e) Develop an efficient and effective regulatory and supervisory framework
THE NAMFISA AND FINANCIAL INSTITUTIONS AND MARKETS BILLS
The drafting of the NAMFISA and Financial Institutions and Markets (FIM) Bills started a few
years ago and have underwent several rounds of consultation with stakeholders including
regulated entities and Cabinet Committee on Legislation.
The Bills are now with the legal drafters in the Ministry of Justice for finalization. Once
promulgated, the new law will provide NAMFISA with adequate regulatory and supervisory
powers. The promulgation of the FIM Bill will play a major role in the deepening and
development of financial markets.
This new legislative instrument allows for the flexibility and swift response to industry
development which will lead to greater innovation in offering financial products and services
to the benefit of both consumers and the financial institutions involved.
FINANCIAL SERVICES OMBUDSMAN
NAMFISA has finalized the 1st draft of the Financial Services Ombudsman (FSO). It will be a
separate piece of legislation from those administered by the Authority and will have its
administration authority headed by the Financial Ombudsman. The Financial Services
Ombudsman is a statutory officer who deals independently with complaints from consumers
about their individual dealings with all financial service providers. The FSO bill is currently
undergoing its final round of reviewing with the Ministry of Finance. This process will be
followed by wide consultations with the stakeholders.
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Regulations and Standards under the FIM Bill
The Authority has completed 79 subordinate legislation to accompany the FIM bill. These
regulations and standards are in layman’s draft format and will be converted into legal drafts.
Once finalised, standards and regulations will go through industry review and consultations.
Regulations 15, 26, 27 28 and 29
Regulations 15, 26, 27, 28 and 29 were promulgated in December 2013 and with the effective
date of 1 January 2014. Regulations 15 and 28 are aimed at curbing excessive capital outflows
and to encourage greater local investments by long-term insurers and pension funds. These
Regulations were amended to allow pension funds and insurers to invest a minimum of 1.75%
and a maximum of 3.5% of the market value of their investments in unlisted investments.
Regulation 26 prescribes the administrate penalties that the Registrar may impose on the
pension funds which fail to comply with the Pension Funds Act while Regulation 27 in turn
prescribes the rate of interest that pension funds should charge on housing loans granted to
their members.
Regulation 29 provides a framework under which pension funds should investments in
unlisted investment. Anyone who wishes to deal in unlisted investments of the pension funds
should be registered and approved by NAMFISA as an Unlisted Investment Manager (UIM). A
Special Purpose Vehicle (SPV) must also be registered as it is through the SPV that funding will
be channeled to the UIM.
Long and short –term Insurance Advisory Committees
During the period under review two insurance advisory committees were established in terms
of the Long- and Short-term insurance Acts to assist the Minister of Finance to execute her
mandate as per the two insurance Acts.
Regulations under Unit Trusts Control Act
The Authority finalized the draft regulations to be issued in terms of the Unit Trusts Control
Act and they are ready for promulgation as envisaged in the Act.
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Conditions for Investment Managers
During 2013, the Authority drafted the Conditions for the regulation and supervision of
investment managers under section 4 (1) of the Stock Exchanges Control Act. These
conditions are envisaged to be promulgated in the ensuing financial year.
f) Ensure operational efficiency of all business processes
The Authority embarked on a path to achieve operational efficiency to enhance service
delivery. In particular, the Authority continued to refine its supervisory instruments and
practices by developing supervisory plans, ladder of supervisory intervention and service
level commitments resulting in significantly improved supervisory activities.
g) Develop a performance-oriented culture
The Authority is continuing with a drive of performance oriented culture. Through this
drive a leadership creed and institutional values are being enforced which resulted in
better productivity.
The activities aimed at enhancing a performance-oriented culture include: monthly
feedback sessions to drive strategy and inculcate our values: review and approval of
human resources policies by the Executive; in-house technical training sessions; and the
development and implementation of job profiles for all positions.
h) Develop Appropriate IT Systems
For the Authority, to achieve its goal of a well-managed, efficient and effective regulator,
the Authority drafted a high-level IT strategy and implementation plan in year 2011/12
which is reviewed annually. Consequently, cost savings on the usage of paper ensued.
The Authority continued with the usage and enhancement of the Electronic Regulatory
System (ERS) in order to increase operational efficiency that resulted in improved
turnaround times.
A well designed IT infrastructure is not only important for operational efficiency, but also
for regulatory effectiveness.
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CONSOLIDATED REGULATED INDUSTRIES’ DATA SUMMARIES
a)
Total number of regulated entities
The Authority regulated a sector that is significant by any measure and is comprised of a number of
different institutions and intermediaries. As at 31 December 2013, the number of regulated entities
was as follows:
Type of Institution
Long-Term Insurance Companies
(Intermediaries)
Short-Term Insurance Companies
(Intermediaries)
Medical Aid Funds-active
Pension Funds-active
Collective Investment Schemes
Investment Managers
Microlenders
Stock Exchanges
Stock Brokers (exclude sponsors of SB)
Friendly Societies
Total
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Number of
Number of
% Change
Institutions
Institutions
2012
2013
18 (2 782)
17 (2 265)
-6% (-19%)
14 (464)
13 (572)
-7% (23%)
11
121
12
41
275
1
4
3
501 (3 246)
9
113
13
33
281
1
4
3
486 (2 837)
-18%
-7%
8%
-20%
2%
0%
0%
0%
-3% (-13%)
b)
Assets sizes of regulated entities
As at 31 December 2013, the assets of and assets managed by financial institutions, size of
the capital markets and loans disbursed by microlenders relative to the gross domestic
product (“GDP”) of Namibia, were as follows:
Financial Institutions
Long-Term Insurance
Short-Term Insurance
Medical Aid Funds
Pension Funds
Collective Investment
Schemes
Investment Management
Micro-lending
Financial Markets:
-Local market
capitalization
-Local debt Issued
Total
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31 Dec 12
Assets (N$
million)
31 654
3 002
858
85 757
32 106
31 Dec 13
Assets (N$
million)
36 424
3 461
1 002
105 267
37 267
109 407
1 752
31 Dec 13
% of GDP
31 Dec 13
% Change
10.5
1.0
0.3
30.3
10.7
15
15
17
23
16
123 322
2 616
35.5
0.8
13
49
11 057
18 729
15.6
69
17 125
252 424
19 077
347 165
15.9
289.2
11
38
Note: The total assets in the financial sector regulated by the Authority amounts to N$178
899 million compared to the figure of N$347 165 million above which includes significant
overlap where, for instance investment managers manage assets of Pensions Funds. The
nominal Gross Domestic Product was recorded at N$120 028 million.
c)
Registrations and deregistration during year 2013
Institution
Long-Term Insurance Companies
(Intermediaries)
Short-Term Insurance Companies
(Intermediaries)
Reinsurers
Medical Aid Funds
Pension Funds
Collective Investment Schemes
Investment Managers
Microlenders
Stock Exchanges
Stock Brokers (exclude sponsors
of SB)
Friendly Societies
Total
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Registered
entities as
at
31/12/12
New
Registered
entities
during
year 2013
16(3820)
0(124)
Deregistered
entities
during year
2013
Registered
Entities as
at
31
December
2013
0(1693)
16(2265)
12(446)
0(161)
0(35)
12(572)
2
9
121
12
41
267
1
4
0
0
2
1
0
28
0
0
0
0
12
0
13
22
0
0
2
9
111
13
28
273
1
4
2
487(4266)
0
31(285)
0
47(1728)
2
471(2837)
d)
Supervisory ladder stages of entities as at 31 December 2013
Supervisor Pension Medical Friendly MicroCapital
Shorty Ladder
Funds
Aid
Societie lenders Markets
term
Funds
s
Insuran
ce
Stage 1 –
73
2
0
141
26
10
no
significant
problems
Stage 2 –
20
4
0
44
2
2
early
warning
Stage 3 –
8
3
0
14
0
0
risk to
viability or
solvency
Stage 4 –
8
0
0
22
1
0
future
viability in
serious
doubt
Stage 5 –
2
0
2
64
4
1
entity not
viable or
solvency
imminent*
*
Total
111
9
2
285
33
13
regulated
entities
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Longterm
Insuran
ce
15
0
0
2
1
18
e)
Supervisory interventions during year 2013
Supervisory
Interventio
ns
Inspections
12
26
2
Micro
lender
s
59
Notices to
cancel
135
0
1
38
8
9
27
218
0
0
0
22
13
0
1 352
1
387
13
0
0
0
4
32
21
70
2
3
0
166
2
0
2
175
66
1
0
0
0
4
3
74
Actual
Cancellation
s
Voluntary
cancellation
s
Complaints
Resolved
Penalties
imposed
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Pension Medical Friendly
Funds
Aid
Societies
Funds
Capital
Market
s
Longterm
Insuranc
e
9
Total
8
Shortterm
Insuranc
e
4
120
f) Statistics on penalties imposed on regulated entities per industry during the financial year
2013/14
Type of institution
Amount (NS)
Long-term Insurance Companies (Intermediaries)
896 000 (-)
Short-term Insurance Companies (Intermediaries)
134 000 (225 000)
Medical Aid Funds - active
-
Pension Funds - active
1 524 520
Collective Investment Schemes
-
Microlenders
-
Stock Exchanges
-
Stock Brokers (exclude sponsors of Stock Brokers)
-
Friendly Societies
-
Total
2 573 520 (225 000)
g) Complaints status for 2013
Industry
Received
Resolved
Microlenders
167
166
1
99%
Long-term Insurance
95
91
4
96%
Short-term Insurance
43
40
3
93%
Pension Funds
56
51
5
91%
Collective Investment
schemes (Unit Trusts)
0
0
0
-
Capital Markets
2
2
0
100%
Medical Aid Funds
3
3
0
100%
Friendly Societies
0
0
0
366
353
13
Total
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In-Progress
% resolved
96%
NAMFISA recovered an amount of N$ 1 437 684 in benefits claims and refunds paid by the
financial institutions to customers who lodged complaints in 2013.
Strategic themes and objectives on priorities areas for 2014/15
Strategic themes
Objectives
Financial literate leading to improved financial Consumers:
decision making
Foster –
o Protection
o Promotion of awareness
Financial stability with sound principles; and
Financial institutions and intermediaries:
Foster-
Reliable source data and information for
research and policy advise
o Stability
o Fairness, efficiency and orderliness
o Reduction of financial crime
Sound regulatory and supervisory frameworks
o Prudential standards
o Market conduct
Regulate and supervise
o Financial institutions & intermediaries,
money lenders & credit providers
Foster –
o Financial soundness
o Highest standards of conduct of
business
Effective operations
o Operational efficiency across the
Authority
o Effective risk management
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Notes to the Editors
Legislative provisions for the Annual Report
The abridged version was prepared in terms of section 28(1)(b) of the Namibia Financial
Institutions Supervisory Authority Act No. 3 of 2001 (NAMFISA Act), which requires the Chief
Executive Officer of the Authority, not later than 3 months, to submit to the Minister of Finance
in respect of the financial year a report on the activities of the Authority during that financial
year. In addition, this report serves to fulfill the provisions of section 26(1) of the State-Owned
Enterprises Governance Act, No. 2 of 2006. This report, therefore, provides a comprehensive
overview on the activities of the Authority for the financial year end 31 March 2014 and is
available for the public.
NAMFISA’s Mandate
NAMFISA was established by the Namibia Financial Institutions Supervisory Authority
Act (“NAMFISA Act”), 2001 (No. 3 of 2001). In terms of the NAMFISA Act, the functions of
the Authority are to:
1. Exercise supervision over the business of financial institutions and over financial
services; and
2. Advise the Minister of Finan ce on matters re late d to f in an c ia l institutions
and financial services.
In fulfillment of those statutory obligations, NAMFISA regulates and supervises a broad range of
institutions, which include:

pension and retirement Funds;

long-term Insurance and short-term Insurance;

medical aid schemes;

friendly societies;
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
unit trust or management schemes;

the Namibian Stock Exchange;

asset or investment managers;

participation bond schemes;

credit providers such as micro lenders,
It is worth noting that NAMFISA is an important component in the Namibian economic
landscape, being responsible for the regulation and supervision of about 486 financial
institutions and 2837 intermediaries. These institutions collectively manage assets in excess of
N$170 billion.
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