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Treasury Releases Draft Insurance Bill for Comment

April 20, 2015

National Treasury

The Draft Insurance Bill has been published for comment.

The draft bill was approved by cabinet this week.

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 seeks to introduce a micro-insurance regulatory framework and promote financially sound insurers and financial services sector.

The draft bill is also designed to replace those sections of the Long-Term Insurance Act and Short-Term Insurance Act that deal with prudential supervision by 1 January 2016.

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

It can be viewed at www.treasury.gov.za.

The plan is to table the draft bill in parliament by June 2015.

Comment on the draft bill is invited until 29 May 2015.

It can be emailed to insurancebill@treasury.gov.za.

The treasury statement also indicates that the Financial Services Board will release a Reinsurance Regulatory Review Discussion Paper by the end of April 2015 to give clarity on existing reinsurance arrangements.