Namfisa targets Legal Shield

THE insurance industry regulator yesterday attempted to take over the management of Namibia’s biggest legal insurance company, a step usually taken to protect policy holders’ funds.

The Namibia Financial Institutions Supervisory Authority (Namfisa) and the registrar of short-term insurance launched an urgent High Court application asking to appoint curators to run the affairs of Legal Shield. The application was not granted on urgency, and has been deferred to November 11 to give Legal Shield an opportunity to respond to the Namfisa challenge.On the same date the High Court will also hear Legal Shield’s opposition to Namfisa attempt to close down the popular Winna Mariba Show, a lottery-like game for policy holders.The exact details of the Namfisa application curatorship were not immediately clear.Marcelina !Gaoses, Namfisa General Manager:Provident Institutions, said yesterday:”Our responsibility is to protect the public against unscrupulous elements or to ensure that policy holders are not being treated unfairly.”We have reason to believe that whatever is happening, we have the right to go to court in order to prevent public money from being lost.”She did not disclose the exact reasons Namfisa wanted to take over the management of Legal Shield.A source close to the insurance regulator claimed:”The way they are doing business is such that it benefits the individual and not the policy holders.”Quinton van Rooyen, Managing Director and owner of Legal Shield, alleged yesterday that the Namfisa application was motivated by personality clashes between himself and Namfisa Chief Executive Officer Frans van Rensburg.”He [Van Rensburg] told us to stop Winna Mariba and we didn’t,” said Van Rooyen in an interview yesterday.”That’s where it all started.It’s got nothing to do with financial issues,” he charged.On yesterday’s urgent application for curators, Van Rooyen said:”This is a total ambush.We don’t know what the allegations are.It’s typical of South African lawyers to use ex parte (in the interests of one side only) applications.Luckily our courts said ‘no’.This cannot go on like that.”It is understood that Namfisa earlier this year investigated how the funds of the policy holders were being handled, and whether sufficient money is kept in reserve for claims on Legal Shield.Namfisa last year instructed Legal Shield to end the Winna Mariba game show following complaints that the show was enticing people to sign up for policies, something prohibited by regulations.Other reports suggested that the show may be contrary to gambling laws.Legal Shield was started in 2001 with 15 000 members in the first year.That has grown to 100 000 to date.Legal Shield members pay nearly N$90 a month for policies that guarantee them legal advice.!Gaoses said Namfisa planned to appoint an independent curator who will control Legal Shield and report to the High Court.”It doesn’t help for people to take out insurance when they cannot buy food and then whenever they want to” call up the insurance company for service they cannot get help, said !Gaoses as an example why Namfisa and the registrar for short-term insurance closely monitor the companies.The application was not granted on urgency, and has been deferred to November 11 to give Legal Shield an opportunity to respond to the Namfisa challenge.On the same date the High Court will also hear Legal Shield’s opposition to Namfisa attempt to close down the popular Winna Mariba Show, a lottery-like game for policy holders.The exact details of the Namfisa application curatorship were not immediately clear.Marcelina !Gaoses, Namfisa General Manager:Provident Institutions, said yesterday:”Our responsibility is to protect the public against unscrupulous elements or to ensure that policy holders are not being treated unfairly.”We have reason to believe that whatever is happening, we have the right to go to court in order to prevent public money from being lost.”She did not disclose the exact reasons Namfisa wanted to take over the management of Legal Shield.A source close to the insurance regulator claimed:”The way they are doing business is such that it benefits the individual and not the policy holders.”Quinton van Rooyen, Managing Director and owner of Legal Shield, alleged yesterday that the Namfisa application was motivated by personality clashes between himself and Namfisa Chief Executive Officer Frans van Rensburg.”He [Van Rensburg] told us to stop Winna Mariba and we didn’t,” said Van Rooyen in an interview yesterday.”That’s where it all started.It’s got nothing to do with financial issues,” he charged.On yesterday’s urgent application for curators, Van Rooyen said:”This is a total ambush.We don’t know what the allegations are.It’s typical of South African lawyers to use ex parte (in the interests of one side only) applications.Luckily our courts said ‘no’.This cannot go on like that.”It is understood that Namfisa earlier this year investigated how the funds of the policy holders were being handled, and whether sufficient money is kept in reserve for claims on Legal Shield.Namfisa last year instructed Legal Shield to end the Winna Mariba game show following complaints that the show was enticing people to sign up for policies, something prohibited by regulations.Other reports suggested that the show may be contrary to gambling laws.Legal Shield was started in 2001 with 15 000 members in the first year.That has grown to 100 000 to date.Legal Shield members pay nearly N$90 a month for policies that guarantee them legal advice.!Gaoses said Namfisa planned to appoint an independent curator who will control Legal Shield and report to the High Court.”It doesn’t help for people to take out insurance when they cannot buy food and then whenever they want to” call up the insurance company for service they cannot get help, said !Gaoses as an example why Namfisa and the registrar for short-term insurance closely monitor the companies.