I/LTI/03/2026 & I/STI/03/2026 – Matters Related to the Implementation of FIMA, 2021 (Act No. 2 Of 2021)

CIRCULAR

NO. : I/LTI/03/2026 & I/STI/03/2026 TO : ALL INSURERS AND REINSURERS Date : 13 JULY 2026 EFFECTIVE DATE : IMMEDIATE EFFECT subject : MATTERS RELATED TO THE IMPLEMENTATION OF THE FINANCIAL INSTITUTIONS AND MARKETS ACT, 2021 (ACT NO. 2 OF 2021)

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INTRODUCTION This Circular is issued by virtue of the functions and powers of the Namibia Financial Institutions Supervisory Authority (“NAMFISA”), as the authority responsible for the supervision of financial institutions in terms of section 2 of the Namibia Financial Institutions Supervisory Authority Act, 2021 (Act No. 3 of 2021), read together with the Financial Institutions and Markets Act, 2021 (Act No. 2 of 2021) (“FIMA”). The purpose of this Circular is to notify all insurers and reinsurers of matters relating to the implementation of FIMA, which came into operation on 1 May 2026, and to provide guidance regarding: 1.2.1 Deemed registration; 1.2.2 Transitional arrangements applicable to insurers and reinsurers licensed under the repealed legislation; 1.2.3 Requirements pertaining to the duties and appointment of valuators; 1.2.4 Capital adequacy requirements; 1.2.5 Considerations and requirements on outsourcing of functions; 1.2.6 Annual financial statements reporting requirements; and 1.2.7 Ongoing compliance obligations under FIMA. 1.2.8 Cell Captive Standards 1.2.9 Consequences of Non-compliance 1.2.10 Publication of Standards - Section 12(3) of the Interpretation of Laws Proclamation 37 of 1920 This Circular must be read together with FIMA, all regulations and standards issued under FIMA, and any directives, notices or further circulars issued by NAMFISA. All standards and instruments issued under section 409 of FIMA and published in the Government Gazette constitute binding legal requirements. DEEMED REGISTRATION In terms of section 5(1) of FIMA, a person may not carry on the business of insurance or reinsurance in Namibia, unless that person – 2.1.1 is registered pursuant to section 11 of FIMA or deemed to be registered pursuant to section 12 of FIMA, and carries on the class or classes of insurance indicated in its certificate of registration as an insurer or reinsurer; and 2.1.2 carries on that business in accordance with FIMA. Accordingly, no entity may carry on activities falling within the definition of an insurer or reinsurer in Chapter 2 of FIMA unless registered in terms of section 11 of FIMA or deemed registered in terms of section 12 of FIMA. All insurers and reinsurers must assess their regulatory status and ensure compliance with the requirements of FIMA. TRANSITIONAL ARRANGEMENTS Transitional provisions are provided for in section 467 of FIMA, read together with Schedule 3, to ensure regulatory continuity following the commencement of FIMA. In terms of section 12 of FIMA, an insurer or reinsurer that was registered under the repealed Long-term Insurance Act, 1998 (Act No. 5 of 1998) (“LTI Act”) or the Short-term Insurance Act, 1998 (Act No. 4 of 1998) (“STI Act”) immediately before 1 May 2026 is deemed to be registered under FIMA. Consequently, with effect from 1 May 2026 , all insurers and reinsurers are required to fully comply with the applicable requirements of FIMA and any subordinate measures issued thereunder, subject to any applicable transitional provisions. DUTIES AND APPOINTMENT OF VALUATORS In terms of section 18 of FIMA, a registered insurer or reinsurer must, in accordance with section 402 of FIMA, appoint and at all times have a valuator for the purposes of FIMA. A registered insurer or reinsurer may not appoint as its valuator an employee, officer, director or shareholder of the registered insurer or reinsurer or of an insurance intermediary that is affiliated with the registered insurer or reinsurer. In terms of section 402(2) of FIMA, a valuator must be a fit and proper person within the meaning of the standards and be independent of the financial institution within the meaning of the standards. A registered insurer or reinsurer that was registered under the repealed STI Act, must appoint a valuator within 90 days after 1 May 2026. The valuator of a registered insurer or reinsurer that was registered under the repealed LTI Act, may continue as the valuator of that registered insurer or reinsurer under FIMA as long as the valuator meets the requirements of sections 18(2) and 402(2) of FIMA. Section 18(6) further prescribes that, in addition to the functions and duties assigned to a valuator by section 402 of FIMA, a valuator of a registered insurer or reinsurer must value the actuarial and other policy liabilities of the registered insurer or reinsurer with respect to its insurance or reinsurance business in Namibia as at the end of each financial year and prepare a valuation report thereon for that financial year. Section 402(10)(a) of FIMA prescribes that an insurer or reinsurer must, commencing 12 months after FIMA implementation date (i.e., all financial years ending on or after 1 May 2027), send a copy of its valuation to NAMFISA within 180 days of the end of each financial year. 4.7. In terms of clause 5 of Standard No. GEN.S.10.4 -- Notification for Appointment and Termination of Valuators, a financial institution must, within 30 calendar days after the appointment of a valuator, notify NAMFISA of the appointment. 4.8 In accordance with section 402(4) of FIMA, NAMFISA may, on the grounds that the valuator is not a fit and proper person or is not independent within the meaning of the standards, and after giving the financial institution and the valuator a reasonable opportunity to be heard, direct the financial institution to appoint some other person to be the valuator of the insurer or reinsurer. 4.9. Clause 1(b) of Standard No. GEN.S.10.8 -The Independence of Directors, Members of a Board, Trustees, Custodians, Auditors, Valuators, and any Other Person required to be Independent under the Act (GEN.S. 10.8) defines conflict of interest as follows: “conflict of interest” means a situation which a director, key person, auditor, valuator, or any other service provider encounters, while rendering a financial service to a client, if that situation - (i) impairs the objectivity of the director, key person, auditor, valuator, or any other service provider in any aspect of rendering the financial service to the client; or (ii) prevents the director, key person, auditor, valuator, or any other service provider from rendering the financial service to the client in an unbiased and fair manner or from acting in the best interest of the client; ” 4.10. Clause 3(1) of Standard No. GEN.S.10.8 prescribes that: Unless the person can show that there is no direct conflict of interest, the person will not be considered independent in respect of an election or appointment to a position with a financial institution or financial intermediary if the person - is an associate of – the financial institution or financial intermediary; or an entity that is an affiliate of the financial institution or financial intermediary; or derives any benefit in the provision of a financial service to a client, other than through the contractual relationship with the financial institution or financial intermediary in terms of which the election or appointment to the position was made. In terms of clause 4(1) of Standard No. GEN.S.10.8: In addition to the general criteria, unless the person can show that there is no direct conflict of interest, a valuator will not be considered independent if the valuator – is a key person with respect to the financial institution or financial intermediary concerned, or is a key person of an associate or affiliate of that financial institution or financial intermediary; or has any direct or indirect association with the auditor of that financial institution or financial intermediary, or with the member of the firm of auditors designated pursuant to section 401(2) of FIMA, that gives rise to, or may reasonably be perceived as giving rise to, an actual, potential, or perceived conflict of interest. CAPITAL ADEQUACY REQUIREMENTS In terms of section 20 of FIMA, a registered insurer or reinsurer must at all times maintain its business in a financially sound position by – having assets exceeding the capital adequacy requirements as set out in the standards; and generally conducting its business so that it is in a position to meet its liabilities and capital adequacy requirements at all times. For purposes of determining the compliance of each registered insurer or reinsurer with the capital adequacy requirements, the values of the assets and liabilities of each registered insurer or reinsurer must be determined in accordance with the standards. 5.3. The capital adequacy requirements referred to in paragraph 5.1 above are contained in Standard No. INS.S.2.1 - Capital Adequacy requirements for Registered Insurers and Reinsurers and the determination of the values of assets and liabilities of each registered insurer and reinsurer referred to in paragraph 5.2 above are contained in Standard No. INS.S.2.2 - The Determination, Calculation and Valuation of The Assets and Liabilities of Registered Insurers for the Purposes of Capital Adequacy, including Namfisa’s Right to change a Valuation. 5.4. The capital adequacy requirements are applicable with immediate effect and should in the interim be applied on

the International Financial Reporting Standards (“IFRS”) 4 data in terms of section 414(3) of FIMA, until such a time that the Standards have been amended to provide for IFRS 17. OUTSOURCING REQUIREMENTS Standard No. GEN.S.10.10 - Outsourcing of Functions and Responsibilities by Financial Institutions and Financial Intermediaries (“the Outsourcing Standard”) prescribes the requirements pertaining to the outsourcing of functions and responsibilities by financial institutions and financial intermediaries. Clause 4(1) and 4(2) of the Outsourcing Standard prescribes that the board and senior management of a financial institution or financial intermediary is ultimately responsible for ensuring compliance with the standard and that the board and senior management must designate employees responsible for continuously identifying, reporting and mitigating risk strategies of outsourced arrangements. In terms of clause 2, read together with clause 6(1) of the Outsourcing Standard, a financial institution or financial intermediary may not outsource its principal business, but may outsource their material business functions, provided that any outsourcing is done in compliance with the Outsourcing Standard. Schedule 2 to the Outsourcing Standard specifies that assessing, determining, and deciding on claims, and assessing and deciding to accept or decline risk are principal business functions or activities that may not be outsourced by insurers or reinsurers. The following seven principles on the outsourcing of a material business function are provided for in the Outsourcing Standard which must be applied according to the degree of materiality and that of the risks introduced by the outsourcing to the financial institution or financial intermediary: Principle 1: Due diligence on selection and performance monitoring; Principle 2: The contract with a service provider; Principle 3: Information technology security, business resilience, continuity, and disaster recovery; Principle 4: Confidentiality; Principle 5: Concentration of outsourcing arrangements; Principle 6: Access to data, premises, and personnel; and Principle 7: Termination of outsourcing. In terms of clause 15(1) of the Outsourcing Standard, a financial institution or financial intermediary must demonstrate to NAMFISA, as required, that in assessing the options for outsourcing, they have – Complied with the Outsourcing Standard and considered all seven outsourcing principles specified under the Outsourcing Standard; and ensured that – risks associated with the outsourcing are appropriately assessed, monitored, managed, and regularly reviewed; and an internal audit function, or in situations where internal audit capabilities do not exist, an alternative arrangement is in place to review any proposed outsourcing, and to regularly review and report to the board, audit committee or senior management on the financial institution’s or financial intermediary’s compliance to their outsourcing policy. In terms of clause 17(2) of the Outsourcing Standard, a financial institution or financial intermediary must, prior to entering into an off-shoring arrangement with a service provider – seek written approval from NAMFISA and provide detailed justification why the function or activity cannot be feasibly conducted in Namibia; and assess and ensure that the risks of the off-shoring arrangement are adequately addressed in the financial institution’s or financial intermediary’s risk management framework. A financial institution or financial intermediary must notify NAMFISA, in writing not later than 30 business days after entering into an outsourcing agreement, of such agreement in accordance with clause 18(1), and must further notify NAMFISA, in writing not later than 30 business days after an extension, renewal or amendment of an outsourcing agreement, of such extension, renewal or amendment in accordance with clause 18(2). In terms of clause 18(3), any notification made to NAMFISA in terms of sub-clauses (1) or (2) must also be accompanied by a summary of the key risks involved with the outsourcing, and the mitigation strategies put in place to address those risks. Clause 19(1) and 19(2) of the Outsourcing Standard provides a transitional period of 12 months from 1 May 2026 in respect of existing outsourcing arrangements. ANNUAL FINANCIAL STATEMENTS REPORTING REQUIREMENTS In accordance with section 401(11) and (12) of FIMA, commencing 12 months after FIMA implementation date (i.e., all financial years ending on or after 1 May 2027), insurers and reinsurers are required to submit a copy of their annual financial statements and the auditor’s report to NAMFISA within 90 days after the end of their financial year. CELL CAPTIVE STANDARDS Insurers are hereby directed to continue submitting consolidated industry reporting data in the same manner as previously reported, notwithstanding the requirement to report Cell Captive business on an individual cell basis in terms of section 414(3) as read with clause 7 of Standard No.S.2.8 - Matters with Respect to Entities commonly known as Cell Captives. Pending the finalisation and implementation of the Cell Captive reporting forms, insurers shall maintain the current consolidated reporting approach for industry reporting purposes. The Cell Captive reporting forms are currently under development and upon issuance of the Cell Captive reporting forms, further guidance will be provided regarding the submission requirements and reporting timelines. CONSEQUENCES OF NON-COMPLIANCE Section 387 provides that no person may provide a financial service requiring registration unless that person is registered or deemed to be registered under FIMA. Section 387(5) further provides that: ” A person who contravenes section 387(1) commits an offence and is liable on conviction to a fine not exceeding N$5 million or imprisonment for up to 10 years, or both.” PUBLICATION OF STANDARDS - SECTION 12(3) OF THE INTERPRETATION OF LAWS PROCLAMATION 37 OF 1920 NAMFISA hereby reiterates the procedure for the publication of Standards in terms of section 409 of FIMA, as follows: The Standards issued under section 409 of FIMA underwent a pre-consultation phase; The consultation phase was followed by publication in the Government Gazette for stakeholder inputs. Standards in terms of which comments were received and considered were subsequently re-published in the Gazette after the incorporation of the necessary amendments. This publication was done in terms of section 12(3) of the Interpretation of Laws Proclamation 37 of 1920. The publication of Standards in Government Gazettes No. 8902 to 8909 of 30 April 2026 constitutes the final publication of the Standards for purposes of section 409(1) of FIMA. EFFECTIVE DATE This Circular take effect on the date of its issue. For any further information or clarification regarding this Circular, stakeholders may contact the Legal Officer: Insurance and Medical Aid Funds Division, Ms. Nasilele Siyambango, at nsiyambango@namfisa.com.na and/or telephone number 061 290 5116.

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KENNETH S. MATOMOLA CHIEF EXECUTIVE OFFICER