Some N$1.4 million was paid out to Namibian consumers during the first quarter of 2022 by the Namibia Financial Institutions Supervisory Authority (Namfisa).
The resolution of complaints resulted in consumers receiving a total of N$1 375 042.23 from financial institutions, of which retirement funds, long-term and short-term insurance industries accounted for 98%.
As part of its mandate to ensure consumers are protected from financial institutions, the supervisory authority received 199 complaints from financial services consumers during the quarter under review.
According to Namfisa’s quarterly statistical bulletin released last week, this is a reduction of 8.7% from the fourth quarter of 2021 and 11.9% on an annual basis.
Namfisa stated about 80.4% of the complaints received during the quarter were resolved.
Out of the 199 complaints received, 96.5% originated from four industries: microlending and credit agreements, long-term insurance, short-term insurance and retirement funds.
The N$1.4 million payouts broadly relate to wrongful deductions, non-payment of motor vehicle accident claims, unpaid pension benefits, non-payment of beneficiary benefits and non-payment of funeral benefits.
“During the review period, 69 complaints were lodged against long-term insurance companies. Of these complaints, 57 were resolved, of which 18 were resolved in favour of the complainants. During the current quarter, an amount of N$777 137.24 was recovered on behalf of the complainants,” reads the statistical bulletin.
Also, a total of 32 complaints were received from the short-term insurance industry during the first quarter of 2022.
Of these complaints, 23 were resolved, of which six were resolved in favour of the complainants.
An amount of N$481 501 was recovered on behalf of the complainants.
Looking at the retirement funds industry, in respect of the previous quarter, Namfisa stated the total number of registered funds decreased from 213 to 211, of which 89 were domestic and the remaining 122 were foreign.
Medical aid funds
Furthermore, Namfisa reported that medical aid funds reported a net deficit for the quarter under review: “However, it remained well-capitalised, as it held a high percentage of free assets as at 31 March 2022. As the industry’s reserves level exceeded the minimum prudential reserves level requirement of 25%, it was thus deemed financially sound”.
This industry recorded a loss ratio of 110.5%, which indicates the industry’s total expenditure was higher than its income from contributions for the quarter ended 31 March 2022.
“The higher value of claims reported for the current quarter, compared with the previous quarter, was due to members’ access to new benefits during the first quarter of 2022. The Covid-19 pandemic will be monitored as it persists, and the medical aid fund industry will be required to implement more stringent risk management protocols to avoid threats to the industry’s viability,” explained Namfisa.
At the same time, the impact of other illnesses, such as the common cold and influenza; the impact of these illnesses on other ailments as well as elective procedures will be monitored.
The reported loss ratio for the first quarter of 2022 was higher than the ratio of 98.4% reported for the previous quarter and higher than the 99% loss ratio reported for the corresponding quarter of 2021.
As at 31 March 2022, Namfisa said the medical aid funds industry held 54.3% of their investments in Namibia in compliance with the Medical Aid Funds Act (1995).
This regulation requires all medical aid funds to hold a minimum of 45% of their investment assets in Namibia.
The industry continues to hold the majority of its investments in liquid assets, such as unit trusts and cash and cash equivalents to have sufficient cash to settle unexpected healthcare expenses.