Insurance Bill to get transformation emphasis
Publish date: 15 May 2017
Issue Number: 725
Diary: IBA Legalbrief Africa
Category: South Africa
The Treasury has agreed to changes to the insurance Bill in a bid to accelerate the transformation of the industry. A Business Day report says this follows criticisms made during hearings on the Bill. Black business said it would reinforce barriers to entry in the sector, and MPs across the political spectrum supported this view. The Black Business Council and four black-owned insurance companies complained that the licensing conditions, high audit and actuarial fees, excessively demanding standards and a heavy regulatory burden served to exclude black players from the market. A delegation from the Treasury and Financial Services Board said in making the amendments, policyholder-protection and the need for strong regulation had to be balanced with transformation. The objectives of the Bill have been amended so that they state explicitly that they are to be achieved in a manner that is consistent with the Constitution and with reference to transformation of the insurance sector. Transformation has been defined in reference to the Broad-Based Black Economic Empowerment Act. Amendments have been made to the section on licensing so that applicants for licences would need a ‘clear plan to meet transformation objectives’.