The Government of Lesotho has introduced an important suite of financial regulatory reforms through Government Gazette No. 95 of 14 November 2025, comprising the Financial Consumer Protection (Disclosure of Information on Insurance and Investment Products) Regulations 2025, the Financial Consumer Protection (Complaints Handling) Regulations 2025, and the Financial Consumer Protection (Administrative Penalties) Regulations 2025. Together, these measures form a new and comprehensive consumer-protection framework that applies to insurers, banks, investment providers, intermediaries, digital financial-services platforms, and all institutions offering financial products in Lesotho. The Regulations are intended to strengthen fairness, transparency and accountability within the financial sector and introduce enhanced safeguards for consumers while imposing new compliance duties on providers.
The Disclosure Regulations establish mandatory standards of transparency for all insurance and investment products. Financial service providers must now furnish consumers with full, accurate and timely information to support informed decision-making. A central requirement is the introduction of the Key Facts Statement, which provides a clear and concise summary of each product’s essential terms, including costs, fees, premiums, risks, exclusions, benefits, claims procedures and complaint mechanisms. The Key Facts Statement must be presented in plain language, in a legible format, and must be available through various channels including websites, branch offices and authorised representatives. Where a product is marketed or concluded through a digital platform, providers are required to follow strict procedures such as verifying the consumer’s identity, issuing disclosures before collecting personal information and keeping recordings of digital interactions for a minimum of five years. These measures ensure that consumers receive reliable and comparable information regardless of the platform or method they use.
The Complaints Handling Regulations introduce a structured and formalised complaints-management framework that all financial service providers must implement. Each institution is required to establish a dedicated complaints office responsible for receiving, acknowledging, registering and resolving consumer complaints within the timelines prescribed by the Regulations. Providers must assign reference numbers to complaints, maintain both physical and electronic avenues for lodging complaints and categorise each complaint according to its nature and complexity. A complaints-handling policy approved at Board level must be adopted and communicated throughout the institution. The Regulations further require providers to analyse complaints data on an ongoing basis in order to identify recurring issues or systemic risks. Quarterly reports must be submitted to the Regulator, enabling oversight and facilitating early detection of compliance or operational deficiencies. Consumers who remain dissatisfied after a provider has issued its decision may appeal directly to the Regulator within twelve months, unless the matter is already before a court, contains false information or amounts to an unlawful demand.
To reinforce these obligations, the Administrative Penalties Regulations empower the Regulator to impose financial sanctions on institutions that fail to comply with the Act or its Regulations. Enforcement begins with a written notice that outlines the alleged contravention and invites the institution to make representations. When determining the appropriate penalty, the Regulator may consider the seriousness of the breach, whether the conduct was negligent, reckless or deliberate, whether consumers suffered financial harm, the institution’s compliance history and any other relevant factor. Penalties may reach up to one million maloti for serious violations. If a penalty is not paid within the stipulated time, interest of one percent per day may be imposed, and the Regulator may take further enforcement steps after thirty days. These measures confirm the importance of strong internal compliance systems and well-designed governance frameworks across the financial sector.
Taken together, the 2025 Regulations mark a substantial advancement in Lesotho’s financial regulatory landscape. Consumers now benefit from clearer disclosures, more predictable avenues for complaint resolution and enhanced rights of recourse. Financial institutions must in turn strengthen their disclosure processes, review product documentation, upgrade digital onboarding mechanisms and implement robust complaints-management structures. Early compliance not only mitigates regulatory exposure but also builds trust and credibility in a competitive and evolving financial marketplace.
Mayet and Associates is available to assist institutions in understanding and implementing these new obligations, drafting compliant disclosure and complaints-handling frameworks, reviewing internal policies and advising on governance standards that meet regulatory expectations. Our firm remains committed to supporting both industry stakeholders and consumers as Lesotho transitions into this strengthened era of financial consumer protection.
--
Read the original publication at Mayet & Associates
.jpg)
