New Ombudsman to crack the whip on financial sector
As part of the Namibian Financial Services regulatory and supervisory reform, the Namibian Financial Institutions Supervisory Authority (Namfisa) is currently finalising the drafting of its Financial Institutions and Markets (FIM) Bill.
The bill will see the establishment of the Complaints Adjudicator, a quasi-judicial body, which will adjudicate on complaints made against providers of financial services, as well as modernise the financial services sector’s legislation and repeal current outdated laws that do not talk to contemporary market practices and Namibian socio-economic imperatives.
Chief Executive Officer of Namfisa, Phillip Shiimi said the decision for the establishment of the Complaints Adjudicator was amongst other things necessitated by the pivotal role that the financial sector plays in the country’s economy, especially in the socio-economic development of the country..
He maintained that through participation in the financial sector, funds are availed for investment in productive sectors of the economy resulting in increased economic activity and employment opportunities.
“The Complaints Adjudicator will amongst other things, ensure that the rights of users of financial services are maintained and justice is not denied merely due to the inability to afford legal costs of engaging lawyers,” Shiimi said adding that the envisaged Ombudsman will be for free.
“Namibians are provided with the opportunity to create wealth and they are provided with the finances for future needs, for example, funds to cater for retirement and for adverse events, such as disability,” Shiimi said.
The Complaints Adjudicator will further ensure swift conclusion to complaints pertaining financial services through specialised financial services adjudication that brings prompt finality to matters and whose directives are legally binding.
Also, through the Complaints Adjudicator, the financial services complaints service will be availed nationwide beyond the current consumer complaints department at Namfisa, The Villager was told.
“It is important for Namibians to have confidence and participate fully in the local financial system. Amongst others, a well functioning Complaints Adjudicator will create an environment, which instils confidence in our financial sector and encourages maximum participation as the rights of users of financial services are protected,” Shiimi emphasised.
The work of the envisaged adjudicator will not only cover the insurance industry but also the banking industry and other sectors regulated by Namfisa, such as micro and money lenders, asset managers, unit trusts, stockbrokers, medical aid funds and pension funds as well as friendly societies.
“The adjudicator will deal with complaints against institutions and intermediaries by considering and disposing these complaints in a procedurally fair, economical and expeditious manner with due regard to the contractual arrangements, the law and equity considerations,” he said. To this end, the adjudicator is expected to be independent and impartial.
Annual report for the financial year 2010/2011 of Namfisa states that a total of 521 complaints were received by the authority’s consumer complaints department during the year under review. This represented an 11% decrease from the 2009/2010 season.
“We deal with a variety of issues. These do not only pertain to unpaid claims but also to complaints regarding poor quality of service, unfair treatment of clients,” he adds.
However, it is not surprising that the micro lending industry is responsible for the lion’s share of the complaints with complaints on this sector reaching 226 last year alone.
It is followed by the Long-Term Insurance sector with 133 complaints and the pension funds with 76 complaints.
The Short-Term Insurance sector clocked 65 complaints with capital markets and medical fid funds claiming responsibility for 9 and 1 of the complaints respectively.
No complaints have been registered on Unit Trusts since 2006 and only 22 complaints have been levelled against Investment Managers – all of them only in 2008.
Statistics reveal that the Long-Term Insurance sector recorded the most complaints each in 2007, 2008 as well as 2009 with 121, 221 and 186 complaints respectively. Overall second highest in the number of registered complaints is the Short-Term Insurance sector, which recorded 70, 115 and 184 complaints respectively over the same period.
Through the complaints statistics, according to Namfisa, the Authority has been able to detect supervisory problem areas and regulatory risks. The Authority maintained that it is evident from the complaints received that there is a lack of understanding of financial services and products amongst consumers.
The typology of the complaints received; according to Namfisa is wide and in some cases, the Authority received complaints in respect of financial institution not regulated by the Authority.