Omutumwa sent a list of questions to Namibia Financial Institutions Supervisory Authority (NAMFISA) over the disturbing, yet suppressed, news coming from the corridors of Namibian law firms concerning the operations of Legal Shield.
NAMFISA’s manager for corporate communications Ms Victoria Muranda responded as follows:
Question 1 (Omutumwa)
It has come to Omutumwa’s knowledge that there are some legal practitioners who have either taken to court or are contemplating taking the Legal Shield (Trustco) to court for its inability or unwillingness to pay lawyers’ fees for the past 9 nine months. Legal Shield policyholders are, in the event of a lawsuit, entitled to be represented by a legal practitioner who shall be paid by Legal Shield. But whenever a lawyer is instructed to represent a Legal Shield client, and then the lawyer start complaining about non-payment by Legal Shield, Legal Shield simply terminates the instructions and give the instructions to a different law firm – inconveniencing both the Legal Shield policyholder and the legal practitioner.
At this stage, NAMFISA in not able to confirm whether any legal practitioners have taken Legal Shield to court or intend doing so. Be that as it may NAMFISA has however in the past dealt with cases that were lodged by consumers against Legal Shield relating to non-payment of legal fees. NAMFISA has also sent a communiqué to the Law Society of Namibia, requesting lawyers who have unpaid fees by Legal Shield to advice NAMFISA. The purpose of this was to enable NAMFISA to determine what actions, if any, are required. No responses were received from the legal practitioners.
Question 2 (Omutumwa)
The affected legal practitioners are saying that by all indications Legal Shield (Trustco) is insolvent. The lawyers are further advising members of the public to cancel their policies with Legal Shield (Trustco) because there is no guarantee that Legal Shield will ever live up to the terms of the policies.
With regard to the alleged insolvency of Legal Shield we refer you to the published audited financial statements of Trustco Group Holdings (Listed entity) for the year ended 31 March 2019. The said statements depict the solvency information of the insurance segment of Trustco.
In terms of advice provided by legal practitioners to their clients, NAMFISA cannot dictate what advice a legal practitioner should provide to its client. However, we encourage aggrieved consumers to approach NAMFISA should they have complaints that they are unable to resolve with Legal Shield or any other regulated person.
Question 3 (Omutumwa)
The legal practitioners further say that NAMFISA, who is mandated to watch over the affairs of financial insurers in order to protect the public in the event of malpractice or insolvency, is unable/unwilling to do anything. They say that it seems Trustco is bigger than NAMFISA.
NAMFISA’s philosophy is enshrined in its mission and vision statements which is: “To effectively regulate and supervise financial institutions and to give sound advice to the Minister of Finance; and To have a safe, stable and fair financial system contributing to the economic development of Namibia in which consumers are protected.” Our daily supervisory tasks are guided by these two statements and we as an organization can confidently confirm that we have no intent now nor in the future to divert from our mandate.
NAMFISA considers any complaints lodged against a regulated person including Legal Shield. In the past 12 months, NAMFISA has received 1013 complaints against regulated persons and has resolved 937 complaints, which translate into 92%. NAMFISA again reiterates that aggrieved consumers should contact NAMFISA should they be unable to resolve complaints with regulated persons.
Question 4 (Omutumwa)
Legal Shield continues to deduct money from their clients, yet they are not able to live up to the terms of the policies. But NAMFISA is not concerned.
NAMFISA is committed to effectively regulate and supervise financial institutions, and ensure the protection of consumers. Regulated persons are obliged to honor their contractual obligations. As such we again re-iterate that aggrieved consumers should contact NAMFISA at the below contact details:
NAMFISA COMPLAINTS TOLL FREE NUMBER 0800290 500 (office hours)
P.0 Box 21250
Tel: 264 61 290 500
Fax: 264 61 290 5161
CAPTION: NAMFISA’s Manager for Corporate Communications Victoria Muranda