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Schlettwein loses first round of reinsurance battle

2018-09-21  Roland Routh

Schlettwein loses first round of reinsurance battle

WINDHOEK - Windhoek High Court Judge Thomas Masuku yesterday stayed the provisions of the Namibia Reinsurance Act that makes it compulsory for Namibian insurance companies to reinsure a portion of their premiums with state-owned NamibRe.

The Act established NamibRe (Namibia National Reinsurance Corporation).
The judgement follows an urgent application by finance minister Calle Schlettwein and NamibRe to compel eight defiant insurance companies, mostly of South African origin, to re-insure with NamibRe as per the provisions of the NamibRe Act 22 of 1998. Schlettwein and NamibRe dragged the eight companies, Hollard Insurance, Hollard Life, Sanlam Namibia Limited, Santam Namibia Limited, Trustco Insurance Limited, Trustco Life Limited, Outsurance Insurance, Old Mutual Life Assurance and their respective CEOs to court after they refused to re-insure a percentage of their insurance premiums with the State-owned company as required by the Act. 

The insurance firms launched an application in the High Court to challenge the constitutionality of the Act and is refusing to re-invest with NamibRe, pending the finalisation of their application.

The judge further ordered that the minister and NamibRe pay the costs of the application on the scale of one instructing and two instructed legal counsel.

The insurance companies launched a collateral attack on the minister’s application compelling them to reinsure with NamibRe. They argued that the urgent application was premature as a constitutional challenge against the impugned notices was launched in the High Court earlier. 

The minister and NamibRe asked the High Court to order that pending the outcome of the review application, the companies are obliged to comply with the provisions of the Act, the notices and the regulations with immediate effect. 
Judge Masuku however held that pending the outcome of the review and the action proceedings, the decision of the minister to compel the insurance companies to reinsure with NamibRe must be stayed to allow the matters, which have already been launched, to be ventilated and decided by the court. 

He further said that in the circumstances, the insurance companies are entitled - in law – to treat the decision as void and await developments, meaning that they do not do anything until the matter has been decided by the High Court.
With regards to the application by the minister and NamibRe to strike out certain scandalous and vexatious language used in the replying affidavit of the insurance companies, the judge ordered it struck out and further ordered the insurance companies to pay for the costs of the strike out application. 

Judge Masuku said the rule of law, as a constitutional concept, is at the centre of this judgment. He said that it is of national interest that the parties involved move with haste and finalise the pending matters for clarity on the validity and constitutionality of the minister’s measures. 

“Whatever the true picture is, and which can be seen with all the evidence being in, it is necessary for these matters to be dealt with on their real merits as soon as possible, eschewing in the process, unnecessary point-taking and counter-productive interlocutory applications,” Judge Masuku ruled.

He further said the sooner these issues are resolved, the clearer the shores will be on the permissible and impermissible, which will assist all parties, including the minister, to know when they eventually set the ball rolling, that the new approach carries the court’s blessing. 

“There can be no better feeling and atmosphere to operate in than when one knows that the steps they take have the court’s stamp of approval,” Judge Masuku stated.

He concluded by saying that everyone was watching with bated breath as these matters develop.
Advocate Raymond Heathcote represented the Hollard companies, Sanlam, Santam, and Outsurance, assisted by Advocate Ramon Maasdorp. 

Trustco were represented by Advocate Reinhardt Tötemeyer and Old Mutual by Advocate Mathew Chaskalson from South Africa. 
The minister and NamibRe were represented by Advocate Jeremy Gauntlett from South Africa, assisted by South African Advocate Luke Kelly and local lawyer Sisa Namandje.

2018-09-21  Roland Routh

Tags: Khomas
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