Registration of all agents brokers conducting insurance bus

NAMFISA
NAMIBIA FINANCIAL INSTITUTIONS SUPERVISORY AUTHORITY

4 March 2014

To: Principal Officers - All registered insurers and reinsurers All insurance agents and brokers and reinsurance brokers Chairperson - LAAN Chairperson - NIBA Chairperson - AIM Chairperson - NIA

DIRECTIVE: I/STI & LTI/01/2014

Effective date: 1 September 2014

SUBJECT: REGISTRATION OF ALL PERSONS CONDUCTING INSURANCE BUSINESS AS AGENTS AND BROKERS

1. Introduction

1.1 This directive is issued by virtue of NAMFISA's functions and powers, and those of its CEO in his capacity as the Registrar of Long-term and Short-term Insurance, in terms of the Namibia Financial Institutions Supervisory Authority Act No. 3 of 2001, and is applicable to all registered insurers, insurance agents and brokers and reinsurance brokers under the Long-term Insurance Act No. 5 of 1998 ("LTI Act") and the Short-term Insurance Act No. 4 of 1998 ("STI Act").

1.2 It is a legal requirement that every person (juristic or natural) who wishes to conduct insurance business as a broker or agent in Namibia must apply to be registered as such in terms of section 55 of the LTI Act and/or section 53 of the STI Act.

1.3 The purpose of this directive is to direct all persons conducting insurance business as brokers or agents in Namibia, who are either unregistered, incorrectly registered as agents instead of brokers, or brokers who do not fully comply with the prescribed registration requirements, to comply with the requirements as set-out in the LTI and STI Acts.

2. The current insurance practice

2.1 Individual persons selling insurance business for brokerages are incorrectly registered as agents instead of brokers as defined under section 1 of the LTI Act and the STI Act.

2.2 Furthermore, the Registrar has in the past registered individual persons as insurance brokers without such persons complying with the registration requirements under sections 56 and 57 of the LTI Act and sections 54 and 55 of the STI Act.

2.3 These practices will no longer be allowed to continue as they are contrary to the LTI and STI Acts.

3. The law

3.1 In terms of section 55(1) of the LTI Act and section 53(1) of the STI Act, no person shall carry on the business of an insurance agent or broker or a reinsurance broker in Namibia unless such person is registered to carry on such business.

3.2 Any person seeking registration to conduct insurance or reinsurance business as an agent or broker in Namibia must comply with the registration requirements in terms of sections 55, 56 and 57 of the LTI Act and/or sections 53, 54 and 55 of the STI Act.

3.3 In terms of section 66 of the LTI Act read with section 60 thereof and section 65 of the STI Act read with section 58 thereof, no person shall transact long-term or short-term insurance business with an unregistered broker or agent and doing so may result in a criminal conviction.

4. Conclusion

4.1 Both the LTI Act and the STI Act require every person (juristic or natural) who conducts or wishes to conduct insurance business in Namibia as a broker or agent to apply to the Registrar for registration as an agent or broker. It is therefore compulsory and not discretionary for any person carrying on insurance business to register as a broker or agent in terms of the Acts.

5. The directive

5.1 All persons conducting insurance or reinsurance business as agents or brokers in Namibia must be registered in strict compliance with the LTI and STI Acts.

5.2 All insurance and reinsurance brokers working for brokerage firms, including close corporations, and who are incorrectly registered as agents by the Registrar must be registered as brokers in terms of section 55 of the LTI Act and section 53 of the STI Act. These incorrectly registered insurance or reinsurance agents must return their certificates of registration to the offices of NAMFISA and apply afresh for registration as brokers. New certificates of registration shall only be issued once all the requirements for registration as a broker set out under sections 55, 56 and 57 of the LTI Act and sections 53, 54 and 55 of the STI Act have been complied with. Such correct registration must be completed by 30 August 2014 and continued thereafter with effect from the Effective Date stated above.

5.3 All individual insurance and reinsurance brokers registered under the LTI Act and/or the STI Act must ensure that they comply with all registration requirements under sections 55, 56 and 57 of the LTI Act and sections 53, 54 and 55 of the STI Act by 30 August 2014 and with effect from the Effective Date stated above all agents and brokers, whether registered before, on or after the Effective Date must so comply. Such brokers will not be notified individually of any non-compliance and are expected to make certain that they are in full compliance with the LTI Act and the STI Act.

5.4 Any person carrying on insurance or reinsurance business as a broker or agent without being registered as such is contravening section 55 of the LTI Act and/or section 53 of the STI Act, which contraventions constitute criminal offences, and such person shall on conviction be liable in terms of section 69(a)(i) of the LTI Act and/or section 68(a)(i) of the STI Act.

The Registrar therefore requires full cooperation and support in this process by all industry players and stakeholders at large. Should you still need more clarity, please do not hesitate to contact either the Long-term Insurance manager or the Short-term Insurance manager.

Phillip N. Shiimi
CEO of NAMFISA and Registrar of Long-term and Short-term Insurance

Tel: +264 61 290 5000, Fax: +264 61 290 5157, PO Box 21250, Windhoek, Namibia, 154 Independence Ave, Sanlam Centre, www.namfisa.com.na