Medical Aid fund escapes liquidation
Heritage Health Medical Aid Fund’s operations will continue after the Windhoek High Court dismissed the application of the Registrar of Medical Aid Funds to wind up the company due to financial troubles.
The registrar was of the opinion that Heritage was not in a good financial position to continue with its operations. This is after the fund failed on numerous occasions to submit its 2019 financial records to the registrar. As a consequence, Heritage accumulated more than N$1 million in penalties.
“The delay in the submission of the fund’s annual statements, undermines the ability of my office to fully exercise its regulatory functions in terms of the Medical Aid Fund Act,” said Kenneth Matomola, Namibia Financial Institutions Supervisory Authority’s (Namfisa) CEO.
The registrar also claims the fund defied its orders and went ahead with implementing unapproved 2019 members’ contributions and changes - which the registrar deems unlawful. Thus, the registrar published notices to the public that it was unlawful.
However, Windhoek High Court judge Herman Oosthuizen last week said the actions of the registrar were far from its core principles of controlling and promoting medical aid funds.
He said the decision of the registrar’s unreasonable directives in 2019, the subsequent administrative penalties and the public notices it issued, had adverse consequences for the fund and its attempt to run its business on sound business principles and to trade out of its unsound financial condition.
He said in the future, the registrar, in dealing with the affairs of the fund, which mostly caters to pensioners, must be with the purpose of creating circumstances in which it is given the opportunity to improve its financial condition and to trade out of its financial constraints.
“The winding up of the fund in the present circumstances shall be punitive for the lack of regulatory compliance, which it is not intended for. The court is not bound by the registrar’s opinion… In this case, the court is not satisfied that the fund is unable to pay its debts, nor it is just and equitable that the fund should be wound up,” said Oosthuizen.
Oosthuizen ordered the registrar to consider the 2022/2023 proposed member’s contributions and benefits on “merit and not give any negative consideration to the nonapproval of the 2019 contribution and benefits or implementations thereof by the fund”.