On 9 December 2016, the FSB and National Treasury published, for public comment, proposed amendments to the Regulations made under the Short-term and Long-term Insurance Acts which focus on giving effect to the conduct of business reforms.
These conduct of business reforms relate to:
- phase 1 of RDR which proposes a number of improvements to how financial products are distributed and sold;
- improvements to the requirements for binder agreements in support of RDR;
- measures aimed at addressing consumer abuses in the consumer credit insurance market;
- improving policyholder protection in the Ombud system;
- improving complaints management processes;
- ensuring fair and not-misleading communication with potential policyholders;
- appropriate minimum requirements for claims management;
- additional critical protections for policyholders;
- alignment with international standards;
- alignment with the Financial Advisory and Intermediary Services Act;
- closing regulatory gaps and effecting technical improvements to clarify the intent and purpose of certain provisions; and
- changes to the maximum causal event charges that apply to legacy contractual savings policies (entered into before January 2009) in the life insurance sector.
Please see the below links to the relevant documents published by the FSB and National Treasury:
- To view the Media Statement, click here.
- To view the Explanatory Document relating to the amendments, click here.
- To view the draft Government Notice relating to amendments to the LTIA, click here.
- To view the draft Government Notice relating to amendments to the STIA, click here.
The public is invited to comment on the proposed reforms by 22 February 2017.
The targeted effective date of the proposed reforms is 1 May 2017.
The FSB and National Treasury also indicated that amendments to the Policyholder Protection Rules will be released on 15 December 2016 for public comment by 22 February 2017.