Title: PRESENTATION TO: THE PORTFOLIO COMMITTEE ON FINANCE
1PRESENTATION TO THE PORTFOLIO COMMITTEE ON
FINANCE
- PRESENTED BY DEON VAN STADEN
2DEFINITIONS LT(Clause 2)
ST (Clause 26(b))
- Managing Executive
- Reason Fit and Proper
- Current definition not clear Interpreted
differently - Amendment necessary to make it clear
- Chief Executive Officer
- Managing Executive
- Senior Managers
3MISLEADING ADVERTISING MATERIAL LT(Clause 3)S4
ST (Clause 27)S4
- Section deals with powers of Registrar to direct
persons to change or amend advertising material. - This section is expanded to ensure that
advertising material that relates to an insurance
policy includes the name of the insurer that
underwrites the policy.
- Afford public to verify contents
- Prevent unregistered insurance business
- Was in old insurance Act
4NAME OF INSURER LT(Clause 4)S8
ST(Clause 27) S8
- Registrar must approve name of insurer and
changes to name. - Amendment is to also approve
- Translation
- Shortened form or
- Derivative
- (acceptable, records, closely related)
5REINSURANCE LT(Clause 6)S15A
ST(Clause
29)S15A
- - Composite reinsurers only reinsurance business
- - Amendment to do business directly with a fund
- - A fund is - Friendly Society
- - Pension Fund
- - Medical Scheme
- - Other approved by Registrar
6Notification of certain appointments,
terminations and registrations LT(Clause
7)S18 ST (Clause31)S18
- Currently insurers must inform Registrar of
- - Appointment and
- - Terminations of directors and Managing
Executive together with reasons for appointment
or termination
7Clause 7 cont.
- Amendment to also require above if directors,
Managing Executive resign. - Currently this section only requires reason for
termination, resignation to be given by insurer. - The amendment will further give the registrar
the option to request reasons from the director
or Managing Executive if the Registrar so wish.
8DIFFERENT CLASSES OF ORDINARY SHARES LT(Clause
8 )s24 ST (Clause 32)s23
- Registrar must give approval
- This is to regulate insurers who conduct their
business on a cell basis - The objective of cell business is to
differentiate between profits to different
shareholders, which is achieved through the
issuing of different classes of shares
9LT(Clause 16) S39
- Rectifies a textual error
10FREE CHOICE IN CERTAIN CIRCUMSTANCES LT(Clause
17)S44
- Banks/Money lenders security -insurance policy
- Free choice of insurer
- Short-term insurer no free choice (mortgage)
- Long-term insurers lend money to policyholders on
the security of the value of the policy
11CASH PREMIUMS LT(Clause 18)S47 LT Only
- Long-term Insurance Act Receipt if premium is
paid in cash containing name of insurer - Banks cannot comply and is continuously breaching
the Act - Purpose was to protect against brokers
- Banking system enough protection
12MATERIALITY OF MISREPRESENTATION LT(Clause
19)S59 ST (Clause36)S53
- wrong disclosure
- Repudiation of claims
- no disclosure
- reasonable insurer(court) (objective
test) - Materiality test
- insurer in question
(subjective test)
13IN DUPLUM- RULE LT(Clause 20)S61
- Unpaid interest on a capital amount due, only
accumulates up to an amount equal to the capital.
(Common law principle) - Should not apply to policy loans as it will have
a negative effect on other policyholders - For the above reason the in duplum rule was
overruled by the now repealed Insurance Act, 1943
in 1999. - The amendment is to restore the position as it
was up to 31 December 1998
14DEFINITIONS (Clause 26)
- Lloyds underwriter means an underwriter or
non-underwriting member of Lloyds - Managing executive as explained
- Representative means a natural person employed
15(Clause 27)
- Same as Long-term Already explained
- Advertising Material
16FUNERAL POLICIES ST(Clause 28)S8
-
- This amendment is to make sure that Short-term
insurers do not sell funeral or burial policies
because it is long-term insurance business
17- Clause 29 Reinsurance (same as with long-term
insurance - Clause 30 Name (same as with long-term
insurance) - Clause 31 Notification of certain appointments
termination and resignations (same as with
long-term insurance)
18(Clause 32b)
- As explained different classes of ordinary
shares
19ST(Clause 35)S47
- Free copy of insurance policy
- To be the same as the long-term Insurance Act
20(CLAUSE 36)S53
- As explained clause 19 of LT
- Materiality of Misrepresentation
21ST(Clause 39)Schedule 3
- 39(a) Rectifies textual error
- 39(a) That transitional provisions will cease to
apply in the event of either the one or the other
occurrence not both.