Department of Other Financial Institutions Supervision

Department of Other Financial Institutions Supervision

This Department is charged with the responsibility to register, license and regulate non-banking financial institutions. The principal law – Central Bank of Lesotho Act provides the basic mandate and the execution of its various functions is undertaken through the industry specific acts and regulations. It comprises of the following three Divisions:- Pensions and Securities supervision Division, Insurance Supervision Division, and Non- Banks Supervision Division.

Pensions and Securities Supervision Division (PSSD MANDATE)

The Division is responsible for maintenance of financial system stability through regulation and supervision of the Pension Funds and Securities industries in Lesotho. The Division’s mandate is derived from three pieces of legislation, the Central Bank of Lesotho (Collective Investments Schemes) Regulations 2018, the Pension Funds Act 2019 and the Central Bank (Capital Markets) Regulations 2014.

 The Division is responsible for the following:

• Fostering the liquidity, solvency and proper functioning of a stable market-based financial system;
• Protection and providing information to the investing public
• To promote the safe and sound development of the financial system.

 Functions:

• formulation and execution of relevant laws regulating the financial institutions.
• Development of the Financial Sector through building requisite financial infrastructure and participating in other national initiatives;
• undertaking On-site and Off-Site Inspections and publishing relevant supervisory reports on the financial health of the Pension Funds and Securities industry in Lesotho.
• Licensing and registering regulated institutions in the Pension Funds and Securities industry and their intermediaries;
• Undertaking financial consumer protection through handling of Consumer Complaints.

 Insurance Supervision Division Mandate

The Insurance Supervision Division is generally responsible for maintenance of financial system stability through the supervision and regulation of insurance sector in Lesotho. Its mandate is derived from the CBL functions as the Commissioner of Insurance and as contained in the Insurance Act of 2014 and include but not limited to:

• Registration of insurers and insurance intermediaries
• Formulation and enforcement of appropriate directives and codes of conduct of insurance business;
• Promoting healthy competition and sound business cooperation within the local insurance market;
• Offering protection, enlightenment and guidance to policyholders and public in matters of insurance policies and their application or implications; and
• To promote the safe and sound development of the financial system.

 The functions of the Division include the following:

• To formulate, adopt and execute relevant insurance policies and supervisory frameworks;
• To license insurance companies and their intermediaries;
• To develop the insurance sector through building requisite financial infrastructure and participating in other national initiatives with the same aim, e.g. Financial Inclusion;
• To undertake on-site and off-site inspections on the regulated institutions within the insurance sector;

 Non-Banks Supervision Division (NBSD)

Mandate

The Division is generally responsible for maintenance of financial system stability through the supervision and regulation of Nonbanks Financial Institutions (NBFIs) in Lesotho.

 The Division’s mandate is derived from the following CBL functions as contained in the CBL Act of 2000:

• To foster the liquidity, solvency and proper functioning of a stable market-based financial system;
• To license, register and supervise institutions pursuant to the Financial Institutions Act of 2012, the Money Lenders Order of 1989, and the Building Finance Institutions Act of 1976, and the Insurance Act of 1976; and
• To promote the safe and sound development of the financial system.

 NBSD Key Functions:

• formulation, adoption and execution of relevant NBFIs policies and supervisory frameworks;
• formulation and execution of relevant laws regulating the financial institutions.
• Development of the Financial Sector through building requisite financial infrastructure and participating in other national initiatives with the same aim, e.g. Financial Inclusion.
• undertaking On-site and Off-Site Inspections and publishing relevant supervisory reports on the financial health of NBFIs in Lesotho.
• Collection and compilation of NBFIs statistics.
• Licensing and registering NBFIs.
• Undertaking financial consumer protection through handling of Consumer Complaints.