On Friday, 17 April 2015, the National Treasury and Financial Services Board released the draft Insurance Bill for public comment.
The Bill transpired as a result of the 2008 Global Financial Crisis, which emphasised the necessity to ensure that financial institutions were held to higher standards of conduct. Furthermore, South Africa was required, in terms of the commitments made at the G20 Summit, to ensure that a legal framework that would align the South African insurance industry with international standards was put in place.
The Bill aims to establish a consolidated legal framework for regulation and management of the insurance sector while seeking to amalgamate substantial portions of the Long-term Insurance Act (Act 52 of 1998) and the Short-term Insurance Act (Act 53 of 1998). In doing so, the Bill aims to regulate the insurance industry in a manner that is consistent with international standards to enable insurance companies to operate in foreign countries with ease.
The objective of the Bill is to promote the maintenance of a fair, safe and stable insurance market for the benefit and protection of policyholders by facilitating and monitoring the safety of insurers, increasing access to insurance for all South Africans, and contributing to the stability of the financial system in general.
Comments on the Bill should be submitted by 29 May 2015 and, should no substantial changes to the Bill be made, it is anticipated that the Bill will be tabled in Parliament by June 2015.