Consumer protection is a vital pillar of regulation and supervision – NAMFISA
The Namibia Financial Institutions Supervisory Authority (NAMFISA) Deputy Executive for Prudential Supervision, Mrs Erna Motinga, presented at the Organisation for Economic Co-operation and Development (OECD) and International Organization for Pension Supervisors (IOPS) Global Forum on private pensions, in Bratislava, Slovak Republic on Consumer Protection.
Sharing the Namibian consumer protection experience at the OECD, Motinga said that consumer protection is an important pillar of regulation and supervision because of imperfect information, low financial literacy, unfair business practices, and consumer behaviour.
These, she said, lead to consumers not being adequately protected.
Motinga shared the main complaints in the Namibian pensions space and said that there seems to be an equal split in terms of resolution decisions between the Pension Funds and the complainants. She attributed the equal split to limited financial literacy levels, leading to information asymmetries, and consumer education initiatives.
Motinga highlighted the need for a Treating Customers Fairly (TCF) Framework that will be introduced under the Financial Institutions and Markets Act 2021 (Act No. 2 of 2021) (FIMA), in the form of a market conduct standard, as a way of improving the market conduct of market participants or regulated entities in the interest of the consumers.
According to Mrs Motinga, this standard has seven desired outcomes, namely: fair treatment culture; appropriate product design and distribution of products and services; provision of clear and relevant information; provision of proper advice; product and services performing as promised at an acceptable standard; absence of unreasonable post-sale barriers; and Protection of consumer privacy and information.
In conclusion, she noted that the Authority effectively participated in the Global Forum on Private Pensions was jointly organised by the OECD, the International Organisation of Pension Supervisors (IOPS), and gathered high-level officials from regulatory and supervisory authorities, leading experts from pension fund industry and research institutes from both OECD and IOPS Member countries and representatives from international organisations.
Discussions focused on pension reforms, pension funds sustainable investments: policy and supervisory issues, designing defined contribution pension plans using the OECD roadmap, ways to set up and supervise employer-sponsored pension arrangements, and how to develop capital markets along with newly created pension funds.