"By transacting with or getting involved in the business practices of U-Care, such participating members of the public may equally become liable, since they will be contravening the Banking Institutions Act and the Long-term Insurance Act and this could result in prosecution under these laws.
According to the statement, the business model of U-Care was found to be in contravention of section 55A of the Banking Institutions Act of 1998, as amended based on the following key principles:
U-Care also stands accused of contravening the amended Long-term Insurance Act by acting as a funeral insurance intermediary without approval from the Registrar of Long-term Insurance.
In a joint media statement released this week, the central bank and Namfisa said the operations of U-Care in the country are in contravention of both the Banking Institutions Act, 1998 as amended and the Long-term Insurance Act, 1998, as amended.
The statement read: "On 27 April 2011, BON directed U-Care to refrain from pursuing any further business activities in Namibia.
The Bank of Namibia and the Namibia Financial Institutions Supervisory Authority (NamFisa) have declared that U-Care, a funeral insurance intermediary, did not have the necessary approvals to do business and has been banned from operating in Namibia.
The head of Trustco's Namibia operations said that it earned NAD17,630 in the three months it worked with U-Care. It stopped as soon as it was informed by the NamFisa to terminate its partnership.
Trustco stated that although it was under no regulatory obligation to do a background check, it had looked into the antecedents of U-care in South Africa and found nothing amiss.
U-Care, a Namibian entity that describes itself as a charity funding body, has asked the Bank of Namibia to approach the court to legalise the operations of the company.
The Bank of Namibia has warned the public about dealing with U-Care, as it believes the company has contravened various laws, one of them being taking over of the role of funeral intermediary without approval from the Registrar of Long Term insurance.