Insurance Bill Sent to NCOP

National Assembly

The Insurance Bill has been passed by the national assembly and sent to the national council of provinces for concurrence.

The bill was tabled in parliament in January 2016.

The proposed legislation aims to put a legal framework in place for the prudential supervision of insurance businesses in South Africa that meets international standards for insurance regulation and supervision.

It also seeks to promote financial inclusion and financial transformation through the introduction of a micro-insurance regulatory framework.

The policy objectives of the bill include:

•    Enhancing access to insurance;
•    Enhancing financial soundness; and
•    Alignment with international standards.

A new Solvency Assessment and Management regime would be introduced as well as a framework for insurance group supervision.

The proposed legislation also aims to facilitate alignment with international standards in accordance with South Africa’s G20 commitments.

The bill addresses regulatory gaps identified by the IMF/World Bank’s Financial Sector Assessment Program evaluation of South Africa.

In terms of the envisaged twin peaks legislation, the bill will provide the framework within which the proposed prudential authority will carry out a forward looking risk-based insurance supervision.

The bill also seeks to delegate the power to make secondary legislation and other authority to implement and enforce the bill to the prudential authority.

During its deliberations, the standing committee on finance inserted a new definition on “financial sector code”.

Clause 30(4) was also amended to empower the Prudential Authority to prescribe governance principles and requirements in relation to the achievement and maintenance of stated commitments.

The select committee on finance will now process the bill.

Sabinet Cape Town Office

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