South African Insurance Association

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Proposed Amendment to Schedule 1 of the Financial Intelligence Centre Act, 2001 (Act 38 Of 2001) (FICACT)

FIC Working Group on Non-Life Insurance Business
Following the Financial Intelligence Centre’s (FIC) proposal to include certain businesses or institutions that perform certain categories of activities which are currently completely outside the scope of the FIC Act with a view to potentially including them in Schedule 1 to the FIC Act including but not limited to, non-life insurers and intermediaries, a FIC Woking Group on non-life insurance business was formed.
The FIC Working Group comprises of the following representatives from:

a) SAIA;
b) Financial Intermediaries Association (FIA);
c) South African Underwriting Managers Association (SAUMA);
d) Insurance Crime Bureau (ICB);
e) Financial Sector Conduct Authority (FSCA);
f) Prudential Authority (PA);
g) National Treasury (NT); and
h) FIC.

The Working Group met on 16 July 2018 and 13 September 2018 and has finalised the Terms of Reference for the Working Group. It was agreed that a service provider would be retained to conduct an independent investigation into the risk that the non-life insurance industry poses for money laundering and the financing of terrorist activities. SAIA drafted a Request for Proposal (RFP), in conjunction with other stakeholders of the Working Group, which was issued to prospective service providers to conduct the sector risk assessment in relation to money laundering and the financing of terrorism. 

Service providers will be submitting their proposals by 5 November 2018 where after SAIA, the FIA, ICB and SAUMA will shortlist service providers to be interviewed. The proposed cost of the risk assessment will be presented to the respective Boards of SAIA, the FIA and SAUMA for final approval once a service provider has been selected for appointment.

The FIC stated that the proposal, to include non-life insurers and intermediaries as accountable institutions in Schedule 1 to the FIC Act, would be suspended pending the outcome of the risk assessment.

Members are to note that the Working Group will explore interim measures for information to be provided to the FIC by members, within the ambit of relevant privacy legislation, as the FIC may approach members for customer information whilst the risk assessment is being conducted.

It is likely that the risk assessment will be a long process given the nature of the brief to prospective service providers.

SAIA will continue to communicate to its members by way of the monthly SAIA Bulletin and circulars, as and when further information is available.

For more information contact:
Easvarie Naidoo, SAIA Senior Legal Manager