Insurance companies win against Schlettwein
Insurance companies will not be required to comply with government notices and regulations which forces them to reinsure with NamibRe; a High Court Judgement has finally ruled.
The landmark ruling comes in the wake of insurance companies have battled it out with the national reinsurance company, NamibRe and finance minister, Calle Schlettwein, against having to be forced to do business in Namibia alone and not with other countries.
Schlettwein had also threatened the companies with prison should they not comply.
In his ruling, Judge Masuku said the companies are now entitled not to comply with this order until two other court cases that are challenging the order’s legality are finalised.
Schlettwein was pushing for compliance pending those cases.
He reasoned that Namibia was losing billions of monies through the reinsurance that was being channelled to South Africa.
The minister and NamibRe have consequently been instructed to pay the costs of the application upon the employment of one instructing and two instructed lawyers.
The matter has thus been removed from the roll and regarded as finalised.
Meanwhile, the court battle brought with it some daunting revelations into the reinsurance business and exposed how much certain insurance behemoths were exporting outside the country.
Schlettwein disclosed that from 2015, the country has been losing N$1 billion annually, while between 2009 and 2016 a whopping N$6.088 billion was taken out of Namibia.
He said that should insurance companies fail to remit the money to NamibRe; annual losses could reach N$7.116 billion.
He also said Hollard for its own sake was responsible for a capital flight to the value of N$164 million while Old Mutual has exported monies to the tune of N$100 million with Santam Namibia Ltd having the highest figure of N$344 million.
MMI Holdings Namibia was said to have exported N$83 851 million of premium revenue out of Namibia.
The court battle also saw Schlettwein being accused of playing second fiddle to the government by helping it fill its pockets with the reinsurance money.
The defence lawyer, Raymond Heathcote, flipped the blame for the capital flight back in the face of NamibRe, which he said had refused some of the reinsurance sold to it which ended up being exported.
He said insurance companies were only obliged to reinsure outside the country on the condition that they make an offer to NamibRe first.
“If they say no what must we do? We reinsure. You can not complain about the money that you do not want,” he said in light of the billions leaving the country.
The defence council vehemently argued that the minister had no right to tell them who to do business within an open market and lambasted him for “using the sword of fear” via the policies and regulations.
Chief executive officer for Trustco, Quinton van Rooyen prior the judgement also challenged the constitutionality of giving over 12.5 % of insurance to NamibRe.