LEWIS Stores has defended its insurance fees in Namibia following a dispute with a customer.
In 2013, Linda Diergaardt bought a product from Lewis Namibia for an amount of N$3 999 on credit and left the store that same day, allegedly owing Lewis Namibia a total of N$10 020,72. The figures were given to The Namibian Consumer by Eben de Klerk of ISG Risk Services CC, who is representing Diergaardt in the dispute.
Included in the amount is an item, added by Lewis, referred to as ‘customer protection insurance’ charged at N$2 759, 95 for a two-year term insurance on a product costing only N$3 999 on which finance charges calculated at 18,8% per annum of approximately N$573 was also added.
According to De Klerk, a total of N$3 332,95 was therefore payable only in respect of insurance apart from a further N$954, 50 payable in terms of an extended warranty on the product itself.
Diergaardt does not recall having agreed in writing to any insurance policy, and after several enquiries with Lewis and Mutual and Federal, no insurance policy or even policy number in respect of Diergaardt’s alleged insurance cover could be provided.
De Klerk said approximately 33% of the debt owed to Lewis is in respect of insurance, including death and disability insurance.
He argued that death and disability insurance are clearly insurance products regulated by the long-term insurance act.
De Klerk said Lewis sells products regulated by the Long-term Insurance Act, on behalf of Mutual and Federal, while it has never been registered as an agent or insurance broker under the act.
“Lewis Stores Namibia therefore committed fraud, under the guise of an insurance licence held by Mutual and Federal,” he said.
De Klerk suspects that thousands of Namibians owe the company millions as a result of this practice and said ISG will take the matter to court.
In response, Mervyn McLoughlin of Lewis Stores in South Africa who is a registered agent for Mutual Federal Insurance Company, said the complaint regarding the Namibian Long-term Insurance Act and Short-term Insurance Act ought primarily to be directed against the insurer.
“In regard to the complaint by Mr de Klerk that Lewis is selling products to consumers in breach of the Long-term Insurance Act this is simply not true. The Short-term Insurance Act in terms of which Mutual Federal Namibia, and Lewis as its agent, sell insurance cover, permits the sale of death and disability insurance by a short-term insurer, or its registered agent. Any suggestion to the contrary, and in particular the suggestion that Lewis has committed fraud in relation to the sale of such insurance products, is entirely false,” said McLoughlin.
He said Diergaardt was indeed issued with a certificate of insurance, confirming the conclusion of the insurance policy between herself and Mutual Federal together with the terms and conditions attaching to that policy, both of which were part of the suite of agreements.
McLoughlin said copies of these documents were sent to de Klerk on 22 June this year.
Namibia Financial Institutions Supervisory Authority (Namfisa) in a directive sent on 16 July identified that whilst short-term insurers are permitted to sell death and disability insurance cover arising from accidents, they are not permitted to do so in relation to death caused by an event other than an accident.
Namfisa called upon all short-term insurers to advise their clients that, in respect of any renewal of a short-term insurance policy or any new short-term insurance policy concluded, the only death or disability cover that may be provided is cover relating to death or disability as a result of an accident, or disability as a result of disease.
“Notwithstanding this, all current policies in force remain unaffected. Mutual Federal Namibia, and certainly Lewis as the registered agent will comply fully with this request but it suffices to record that the sale of insurance cover for injury or death caused by accident are expressly permitted in terms of the Short-term Insurance Act,” said McLoughlin.
LEWIS Stores has defended its insurance fees in Namibia following a dispute with a customer.
In 2013, Linda Diergaardt bought a product from Lewis Namibia for an amount of N$3 999 on credit and left the store that same day, allegedly owing Lewis Namibia a total of N$10 020,72. The figures were given to The Namibian Consumer by Eben de Klerk of ISG Risk Services CC, who is representing Diergaardt in the dispute.
Included in the amount is an item, added by Lewis, referred to as ‘customer protection insurance’ charged at N$2 759, 95 for a two-year term insurance on a product costing only N$3 999 on which finance charges calculated at 18,8% per annum of approximately N$573 was also added.
According to De Klerk, a total of N$3 332,95 was therefore payable only in respect of insurance apart from a further N$954, 50 payable in terms of an extended warranty on the product itself.
Diergaardt does not recall having agreed in writing to any insurance policy, and after several enquiries with Lewis and Mutual and Federal, no insurance policy or even policy number in respect of Diergaardt’s alleged insurance cover could be provided.
De Klerk said approximately 33% of the debt owed to Lewis is in respect of insurance, including death and disability insurance.
He argued that death and disability insurance are clearly insurance products regulated by the long-term insurance act.
De Klerk said Lewis sells products regulated by the Long-term Insurance Act, on behalf of Mutual and Federal, while it has never been registered as an agent or insurance broker under the act.
“Lewis Stores Namibia therefore committed fraud, under the guise of an insurance licence held by Mutual and Federal,” he said.
De Klerk suspects that thousands of Namibians owe the company millions as a result of this practice and said ISG will take the matter to court.
In response, Mervyn McLoughlin of Lewis Stores in South Africa who is a registered agent for Mutual Federal Insurance Company, said the complaint regarding the Namibian Long-term Insurance Act and Short-term Insurance Act ought primarily to be directed against the insurer.
“In regard to the complaint by Mr de Klerk that Lewis is selling products to consumers in breach of the Long-term Insurance Act this is simply not true. The Short-term Insurance Act in terms of which Mutual Federal Namibia, and Lewis as its agent, sell insurance cover, permits the sale of death and disability insurance by a short-term insurer, or its registered agent. Any suggestion to the contrary, and in particular the suggestion that Lewis has committed fraud in relation to the sale of such insurance products, is entirely false,” said McLoughlin.
He said Diergaardt was indeed issued with a certificate of insurance, confirming the conclusion of the insurance policy between herself and Mutual Federal together with the terms and conditions attaching to that policy, both of which were part of the suite of agreements.
McLoughlin said copies of these documents were sent to de Klerk on 22 June this year.
Namibia Financial Institutions Supervisory Authority (Namfisa) in a directive sent on 16 July identified that whilst short-term insurers are permitted to sell death and disability insurance cover arising from accidents, they are not permitted to do so in relation to death caused by an event other than an accident.
Namfisa called upon all short-term insurers to advise their clients that, in respect of any renewal of a short-term insurance policy or any new short-term insurance policy concluded, the only death or disability cover that may be provided is cover relating to death or disability as a result of an accident, or disability as a result of disease.
“Notwithstanding this, all current policies in force remain unaffected. Mutual Federal Namibia, and certainly Lewis as the registered agent will comply fully with this request but it suffices to record that the sale of insurance cover for injury or death caused by accident are expressly permitted in terms of the Short-term Insurance Act,” said McLoughlin.
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