THE Namibia Financial Institutions Supervisory Authority (Namfisa) wants the provisional appointment of a curator for the insurance company FIS Life Assurance to secure the survival of the company, which has been beset by serious infighting amongst its shareholders and directors.
This is said by Namfisa Chief Executive Officer Phillip Shiimi in an affidavit filed with the High Court in Windhoek, where an order provisionally placing FIS Life Assurance under the control of a curator, Michael Leech, was given by Judge Dave Smuts last week.
With the order of Judge Smuts FIS Life Assurance has been taken out of the control of its current management and directors, and placed under the control and management of Leech until January 16 at this stage.
Curatorship, unlike liquidation, gives an opportunity to keep the company alive, in the interest of its policyholders, Shiimi says in his affidavit.
FIS has agreements with the Namibian Defence Force and with the Namibian Police to provide funeral insurance to NDF members and to members of the Namibian Police’s Special Field Force, Shiimi has informed the court.
Shiimi is claiming that the company has since 2005 failed to carry out numerous directives from Namfisa to get its business in line with the provisions of the Long-Term Insurance Act.
One of Namfisa’s main concerns over the operations of FIS has been that, despite the fact that the company is not registered to provide disability insurance and that Namfisa has pointed this out to FIS repeatedly, it has been offering disability insurance to NDF members.Namfisa has had the affairs of FIS investigated three times since 2005, has addressed more than a dozen directives to the company since then as well, warned the company late last year that Namfisa intended to cancel its registration as a long-term insurer, and finally opted to ask the court to have FIS placed under the control of a curator.
Shiimi is claiming that FIS has failed to carry out Namfisa’s directives, and that the company has instead obstructed Namfisa’s attempts to investigate its affairs and to ensure its compliance with the law.
“There is ample evidence that several of the notices and letters addressed to (FIS) met with a hostile and at times obstructive attitude which included unsupported allegations of corruption levelled against Namfisa,” Judge Smuts recounted in his judgement.
Namfisa has also alleged that a general failure of good corporate governance has taken place within FIS due to internal disputes in the company, which resulted in two factions of shareholders and directors being at loggerheads with each other over an extended period, the judge also noted.
A wealth of documentation was placed before the court to support these allegations of a comprehensive failure of proper corporate governance and a failure to comply with Namfisas directives, the judge further remarked.
On behalf of FIS the court was told the internal disputes in FIS had been a significant contributing cause of the company’s problems, and that these disputes have now been settled between the two factions, with a new board and a new principal officer for the company appointed.
Judge Smuts said that in his view the fact that FIS has been continuing to provide disability insurance despite not being registered to do so, coupled with other issues where the company has not given a time frame for its undertakings to comply with Namfisa’s directives, tends to show that the Registrar of Long-Term insurance has reasonable grounds to believe that it would be desirable to place FIS under curatorship.
Andrew Corbett, instructed by Shikongo Law Chambers, represented Namfisa with the hearing of its application. Andries van Vuuren and senior counsel Raymond Heathcote, instructed by Fisher, Quarmby & Pfeifer, represented FIS.