Namfisa investigates Lewis for selling insurance

The Namibia Financial Institutions Supervisory Authority (Namfisa) says it is aware of complaints against South African furniture franchise, Lewis.

Lewis has been accused of acting as an intermediary for products regulated by the Long-Term Insurance Act, while it is not registered under the Act to do so.

Namfisa says investigations into the complaints have commenced and it will use all mechanisms at its disposal and provided for in the law.

According to a company called ISG Namibia, who represents an aggrieved Lewis customer who has instituted criminal proceedings against Lewis, the furniture store acted as an intermediary for Mutual and Federal, when at the time of the specific incident in September 2013 it was only registered as a short-term insurance company under the Short-Term Insurance Act.

In a lengthy letter to the Namibia Competition Commission (NaCC), ISG Namibia’s Eben de Klerk alleges that after investigations his company could find no documentary proof to show their client entered into a written insurance agreement with Lewis, which is required by the statutes regulating insurance products.

In fact, ISG’s client denies ever being informed she is buying insurance and is adamant she never signed any insurance policy.
“The only document she admits to having signed is a document presented to her by the Lewis driver upon delivery of the item, which document she was required to sign at the gate of her residence and which document contained the following phrase: I confirm that I was not forced to take the policy provided by Lewis Stores and that I accept the insurance offered by Mutual and Federal Insurance Company,” said De Klerk.

He said Lewis and other alleged transgressors of the law owe people in Namibia millions of dollars.
De Klerk addressed his letter to the NaCC to oppose the proposed N$250 million merger between Lewis, Ellerines and Beares.
“We pray that the NaCC will consider this submission in the serious light it deserves and recognise the substantial increased risk to the public if the merger is approved.”

He further urged the commission to investigate “the numerous recent allegations… against the practices employed by lewis in South Africa”.

De Klerk argues that no terms of the alleged insurance policy were provided to his client, either in writing (as required by law) or verbally.

“Again, a one-page document containing general terms was only provided during the course of our investigation,” said De Klerk, who is representing the aggrieved customer on a pro-bono basis.

ISG Namibia, therefore, accused Namfisa as the regulator of micro-lenders, including in-store credit providers, as well as insurers and insurance intermediaries, of regulatory failure and exposing the public to substantial risk.

“The allegation is unfortunate and untrue. The authority at all times acts in the interest of the consumers and of the industry. Through Namfisa’s consumer education interventions, which take place through newspapers, radio and television, consumers are constantly informed and encouraged to deal only with entities registered in terms of the law,” said Namfisa spokesperson Isak Hamata.

Hamata clarified that in September 2014, Namfisa directed all natural and legal persons to first be registered with the authority before they are permitted to sell insurance products.

“This means all sales force (people) of retail outlets (supermarkets, dealerships, furniture shops, clothing shops, etc.) need to be registered with Namfisa. He said to ensure consumer protection and the safety of the financial sector, Namfisa conducts regular on- and off-site inspections on regulated entities, which include micro-lenders.

“Where irregular conduct and non-compliance to the financial laws are detected, remedial actions are taken in terms of the provisions of those laws,” he said.

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