South African Insurance Association

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Retail Distribution Review (“RDR”)

Transformation and Governance Risks

Retail Distribution Review (“RDR”)

On 15 November 2015, the Financial Services Board’s (“FSB”) issued its Status Update: RDR Phase 1, for public comment.

The SAIA held a workshop with its members on 18 January 2016 to solicit comments for the SAIA’s submission which was submitted to the FSB by the deadline of 1 February 2016.

Some of the high level issues emanating from the SAIA’s workshop were:
•  Members have agreed on the FSB’s proposed two-tier model for adviser categorisation but have proposed that the complexities of short-term insurance, such as distribution models, be taken into account;
•  Members have further proposed that “intermediary services” be defined before the capping on binder fees is finalised;
•  Members are of the view that commercial binders should not be prohibited, subject to “commercial” being defined and welcomed additional consultation by the FSB in this regard, as outlined in the FSB’s Binder Regulations Thematic Review: Key Findings Report, published on 15 December 2015.

The FSB issued its General Status Update: RDR on 14 December 2015 and advised that whilst this document provides a high level status update on its approach to implementing the RDR proposals and is mainly for information purposes, comments and questions are invited on same. The SAIA has accordingly invited comments from its members and will draft an industry submission based on feedback received from members.

For more information contact  Easvarie Naidoo, Legal Manager: