Directives for 2003 Levies, Financial Reporting and Namibianization

[LOGO] NAMFISA NAMIBIA FINANCIAL INSTITUTIONS SUPERVISORY AUTHORITY — Safeguarding the Nation's Wealth! —

December 31, 2002

The Chairperson Adv. V. Rukoro LAAN Windhoek

Attention: All Principal Officers Long-term Insurance Companies

RE: DIRECTIVES FOR 2003

Our invitation to the consultative meeting dated December 5, 2002 refers.

Due to non-attendance of all the representatives of the industry, with exception of Investment Solutions, we cancelled the meeting. The following points are however worth noting.

1. Levies

• We are still busy with our budget and will finalize it in January to determine what the cost will be for regulating the long-term insurance industry.
• Based on the first draft budget, we anticipate an increase in the levies for the levy year 2003/2004. However, it will not exceed the 0.2% as prescribed in Section 4 (a)(ii) of the Government Notice No. 154 of 2002 (Amendment of GN No. 82 of 2002).
• Kindly, budget at 0.2% to make adequate provision for the levies.
• We are also estimating/projecting an increase in the liabilities under un-matured long-term policies, based on the previous year figures. However, it will be highly appreciated, if you could give as your projected final liabilities under un-matured long-term policies for the financial year 2002/2003.

2. Attached is a circular on the following:

• Financial Reporting
• Namibianization

We are planning a meeting in January to inform you about the levies, once we have completed our budget exercise and determined the cost of regulating the industry.

Yours truly,

[Signature] FRANS VAN RENSBURG CHIEF EXECUTIVE OFFICER

• P.O. Box 21250 Windhoek NAMIBIA * 154 Independence Avenue * 8th Floor, Sanlam Centre
• Tel: (+264 61) 290 5000 * Fax: (+264 61) 256303 * E-Mail: info@namfisa.com.na

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[LOGO] NAMFISA NAMIBIA FINANCIAL INSTITUTIONS SUPERVISORY AUTHORITY — Safeguarding the Nation's Wealth! —

December 31, 2002

Enquiries: J Uusiku

TO: PRINCIPAL OFFICERS LONG-TERM INSURANCE COMPANIES

CIRCULAR: PI/LT/1/2003

PART 1- FINANCIAL REPORTING

In terms of section 6 of the Long-term Insurance Act, 1998 (Act No. 5 of 1998) the Registrar herewith requires all registered insurers to submit to the Registrar quarterly returns subject to the terms and conditions set out in the Schedule below. The return must be submitted 30 days after the end of the quarter.

SCHEDULE

For the purposes of prudential supervision, the Registrar is hereby requiring all insurers to submit quarterly returns as prescribed hereunder, effective January 1, 2003.

1.1 The prescribed return must be submitted by all insurers registered to transact Long-term Insurance business in terms of the Long-term Insurance Act, 1998.

1.2 For the sake of consistency and completeness of statistical information compiled from the returns, it is essential that insurers complete all items which are applicable.

1.3 No item(s) may be deleted and other item(s) inserted in the place thereof.

1.4 How to complete and submit the quarterly spreadsheet: a) The spreadsheet must be completed in LOTUS 123 (release 5 for windows or later) or Excel. b) The return is cumulative from the start of the insurer's financial year to the latest quarter end. c) The return must be submitted for the last quarter of the insurer's financial year end. d) Income and expenditure figures should exclude value added tax (VAT). e) All figures should be rounded off to the nearest thousand Namibian dollars.

• P.O. Box 21250 Windhoek NAMIBIA * 154 Independence Avenue * 8th Floor, Sanlam Centre
• Tel: (+264 61) 290 5000 * Fax: (+264 61) 256303 * E-Mail: info@namfisa.com.na

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f) An originally signed copy of the return must be submitted and the electronic return must be e-mailed to juusiku@namfisa.com.na.

1.5 Required figures or information to be entered:

Assets: To be reflected at fair value.

Fund: Means "fund policy" as defined in section 1 of the Act.

Group business: Means insurance where a Long-term policy is issued to a policyholder other than an individual that covers a group of persons identified by reference to their relationship to the entity buying the contract, provided that this excludes grouped individual business.

Grouped individual: Means insurance where a long-term policy is issued to a policyholder other than an individual, business under which an identifiable individual or member is the life insured and the policy is entered into by the policyholder for the purpose of providing benefits to the individual or the individual's dependants.

Individual business: Means insurance where a policy is issued to an individual.

Non-recurring: Means all business which is purchased with a single premium or business where the payment of a series of premiums is not obligatory.

Policy liabilities: Estimated liabilities calculated in accordance with the financial soundness valuation basis excluding capital adequacy requirements.

Recurring: Means business where the policyholder is obliged to pay a series of fixed or pre-determined premiums to the Long-term insurer to keep the policy in force.

PART 2: NAMIBIANIZATION

In terms of section 5 of the Long-term Insurance Act, 1998 the Registrar has to ensure that long-term insurance business in Namibia is administered, controlled and regulated efficiently, and carried on in accordance with the provisions of that Act.

Section 19 of the Act makes provision for the establishment of a fully operational Principal Office of an insurer and a fully empowered Principal Officer for such office.. For the purposes of ensuring that the insurers adhere to the provisions of the Act, the Registrar is hereby issuing the following directives effective January 1, 2003.

2.1 Every registered insurer shall appoint a Namibian citizen as the Principal Officer with full authority to act and make business decisions according to the provisions of the Act.

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2.2 Every insurer shall ensure that the Principal Office is fully operational as a separate entity of any Group and/or Parent company not registered and operational in Namibia.

2.3 Every insurer shall ensure that the policy contracts signed with Namibian policy holders are drawn up and signed according to the applicable laws of Namibia.

2.4 Every insurer shall ensure that the said contracts are kept in safe custody at the registered office in Namibia of the insurer.

2.5 Every insurer shall ensure that the policy claims of Namibian policy holders are processed and paid in Namibia in order to meet obligations on time.

Please note that you have six (6) months from the effective date of this circular to rectify and fully comply with Part 2 of this circular.

[Signature] FRANS VAN RENSBURG CHIEF EXECUTIVE OFFICER

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NAMFISA - REGISTRAR OF LONG-TERM INSURANCE

LONG-TERM INSURANCE QUARTERLY RETURN IN TERMS OF THE LONG-TERM INSURANCE ACT, 1998

THE PRESCRIBED RETURN MUST BE SUBMITTED BY ALL INSURERS REGISTERED TO TRANSACT LONG-TERM INSURANCE BUSINESSIN TERMS OF THE LONG-TERM INSURANCE ACT, 1998

FOR THE SAKE OF CONSISTENCY AND COMPLETENESS OF STATISTICAL INFORMATION COMPILED FROM THE RETURNS, IT IS ESSENTIAL THAT THEREOF.

DISCLAIMER: This spreadsheet was designed by NAMFISA and it may be copied.

However, NAMFISA accepts no responsibility for any loss or damage arising from its use, nor for any decision made by the insurer or any other person based on information or calculations made by, or obtained from the spreadsheet

INFORMATION REGARDING THE QUARTERLY RETURN This return does not have to be audited. This return will not be available for public inspection. However, this does not prevent NAMFISA from making available the aggregate figures for the industry in its entirety. This return must be submitted within 30 days of the end of the quarter to which it relates.

HOW TO COMPLETE AND SUBMIT THE QUARTERLY SPREADSHEET:

1. The spreadsheet must be completed in LOTUS 123 (release 5 for windows or later) or Excel.
2. The return is cumulative from the start of the insurer's financial year to the latest quarter end.
3. The return must also be submitted for the last quarter of the insurer's financial year end.
4. Income and expenditure figures should exclude value added tax (VAT).
5. All figures should be rounded off to the nearest thousand Namibian dollars.
6. An originally signed copy of the return must be submitted and the electronic return must be e-mailed to juusiku@namfisa.com.na
7. This information page need not be printed.
8. See the circular for the description of the terms.

NOTE: ONLY SHADED AREAS, e.g. XXXXXXX REQUIRE FIGURES OR NFORMATION TO BE ENTERED WHERE APPLICABLE. ALL OTHER AREAS (PROTECTED CELLS) WILL CONTAIN AUTOMATIC CALCULATIONS, INFORMATION OR DATA OR MUST REMAIN BLANK. NO CHANGES MAY BE EFFECTED TO THESE PROTECTED AREAS (CELLS).

THE RETURN MUST BE PRINTED AND SUBMITTED, EVEN IF NIL.

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Page 1

NAMFISA	SCHEDULE 1: CURRENT QUARTER
	LONG-TERM INSURANCE ACT, 1998	LTQ
NAME OF INSURER:
UNAUDITED RETURN FOR THE PERIOD		TO
Prepared by:		Telephone No. and ext.
REVENUE ACCOUNT - TOTAL	N$'000	MOVEMENT STATISTICS - INDIVIDUAL &
GROSS:	Premiums received and outstanding
	Claims paid and outstanding
NET:	Premiums received and outstanding
	- Recurring	0
	- Non-recurring
	LESS: Claims paid and outstanding(net)	0
	- Annuities
	- Surrenders/withdrawals
	- Other lumpsums
	Commission(net)
	Reinsurance Premium
	Management expenses
	ADD: Investment income
	Realised investment surplus(loss)
	Unrealised investment surplus(loss)
	Other income/(expenses)
	Excess of income over expenses	0
	LESS: Taxation
	LESS: Transfer to (from) shareholder fund
	INCREASE/(DECREASE) IN LONG-TERM FUND	0
	FINANCIAL POSITION STATEMENT	N$'000
	Linked	Non-linked
	Assets:
	Cash
	Balances with banks
	Gilts
	Policy loans
	Mortgage bonds
	Debentures
	Claims/Debtors
	Shares: Listed
	Shares: Unlisted
	Fixed assets
	Foreign assets-CMA
	Foreign assets-Offshore
	Total assets	0
	Liabilities:
	Policy liabilities
	Current liabilities
	CAR
	Excess assets	0

1. Give the minimum and maximum percentages of the gross exposure (positive and negative) that derivative transactions had to the value of total assets during the past quarter. Positive: Minimum | Maximum Negative: Minimum | Maximum
2. Has any trading in derivatives taken place outside the mandate provided by the board of directors? Yes/No
3. Has the mandate provided by the board of directors changed? Yes/No If yes to either 2 or 3, furnish details:

PRINCIPAL OFFICER (sign:) | DATE

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Page 2

NAMFISA	SCHEDULE 2: YEAR-TO-DATE FIGURES (CUMULATIVE)
	LONG-TERM INSURANCE ACT, 1998	LTQ
NAME OF INSURER:
UNAUDITED RETURN FOR THE PERIOD		TO
Prepared by:		Telephone No. and ext.
REVENUE ACCOUNT - TOTAL	N$'000	MOVEMENT STATISTICS - INDIVIDUAL &
GROSS:	Premiums received and outstanding
	Claims paid and outstanding
NET:	Premiums received and outstanding
	- Recurring	0
	- Non-recurring
	LESS: Claims paid and outstanding(net)	0
	- Annuities
	- Surrenders/withdrawals
	- Other lumpsums
	Commission(net)
	Reinsurance Premium
	Management expenses
	ADD: Investment income
	Realised investment surplus(loss)
	Unrealised investment surplus(loss)
	Other income/(expenses)
	Excess of income over expenses	0
	LESS: Taxation
	LESS: Transfer to (from) shareholder fund
	INCREASE/(DECREASE) IN LONG-TERM FUND	0
	FINANCIAL POSITION STATEMENT	N$'000
	Linked	Non-linked
	Assets:
	Cash
	Balances with banks
	Gilts
	Policy loans
	Mortgage bonds
	Debentures
	Claims/Debtors
	Shares: Listed
	Shares: Unlisted
	Fixed assets
	Foreign assets-CMA
	Foreign assets-Offshore
	Total assets	0
	Liabilities:
	Policy liabilities
	Current liabilities
	CAR
	Excess assets	0

1. Give the minimum and maximum percentages of the gross exposure (positive and negative) that derivative transactions had to the value of total assets during the past quarter. Positive: Minimum | Maximum Negative: Minimum | Maximum
2. Has any trading in derivatives taken place outside the mandate provided by the board of directors? Yes/No
3. Has the mandate provided by the board of directors changed? Yes/No If yes to either 2 or 3, furnish details:

PRINCIPAL OFFICER (sign:) | DATE