The Namibia Financial Institutions Supervisory Authority (Namfisa) has reiterated that in terms of its prudential supervision of medical aid funds, it does not necessarily prevent the liquidation or voluntary dissolution of such funds.
Namfisa stated that its function is merely to reduce the likelihood of liquidation or dissolution as other unforeseen factors may also adversely impact the business of a medical aid fund.
This comes after it was brought to the attention of Namfisa about speculation and circulation of information, regarding the financial status and future sustainability of one of the medical aid funds, namely BankMed Namibia, which is currently registered with the watchdog in terms of the MAF Act.
In terms of section 30 of the Namibia Financial Institutions Supervisory Authority Act, 2001, (Act No. 3 of 2001), Namfisa may not disclose to any person information relating to the affairs of a medical aid fund.
Corporate Communications Practitioner, Joanette Eises said that Namfisa is unable to comment on the financial condition, future sustainability or any other aspect of BankMed Namibia.
However, she explained that Namfisa supervises the medical aid funds industry under the Medical Aid Funds Act No. 23 of 1995 (“MAF Act”), Medical Aid Funds Regulations made under the MAF Act as well as other applicable legislations administered by Namfisa.
“Namfisa’s supervision of medical aid funds entails robust monitoring and corrective enforcement actions that enable Namfisa to proactively identify (at an early stage) and address potential issues in respect of each medical aid fund and within the medical aid funds sector as a whole,” said Eises.
This supervisory approach includes regular onsite and offsite inspections, risk assessments and, thereafter, taking appropriate corrective enforcement actions, when necessary, to resolve an identified issue.
However, corrective enforcement actions taken by Namfisa vary according to the risk profile and the specific circumstances of a particular medical aid fund.
Namfisa distinguishes between risks consistent with a dynamic and efficient medical aid fund and those that need to be regularly monitored to achieve its financial stability objective. The fund only intervenes swiftly, if a medical aid fund’s non-compliance with the prudential supervision requirements in the pieces of legislation undermines its financial sustainability and adversely impacts the members of the medical aid fund.
Eises therefore, argues that the medical aid fund industry is expected to comply with both the letter and spirit of the applicable legislation, as well as take into account Namfisa’ssupervisory assessment of a medical aid fund’s prudential status, which includes its financial condition, governance and risk management.
Meanwhile, the Namibia Financial Institutions Supervisory Authority supervises financial institutions and financial services and advises the Minister of Finance on matters relating to financial institutions and
financial services in terms of the Namibia Financial Institutions Supervisory Authority Act, 2001 (Act No. 3 of 2001).
Namfisa is further responsible for supervising and enforcing compliance with the Financial Intelligence Act, 2012 (Act No. 13 of 2001) concerning all accountable and reporting institutions supervised by Namfisa in terms of the Namfisa Act. The non-banking financial institutions supervised by Namfisa are inter alia, Long and Short-Term Insurers and Reinsurers, Investment Managers, Unit Trusts (Collective Investment Schemes), Pension Funds, Medical Aid Funds, Public Accountants and Auditors, Stock Exchanges, Brokers and Agents, Friendly Societies, Money lenders and Microlenders.