Looking Ahead – Local Developments
At the 2019 African Insurance Exchange Conference, the Prudential Authority advised that the following work is in progress:
- Guidance Notes supporting the Financial Soundness Standards
- Communication on section 50 of the Insurance Act (Transfer, fundamental transaction or change of institutional form);
- Approach to transformation;
- Financial Conglomerate standards and designation criteria;
- Scoping of insurance groups;
- Conversion of registration to licences;
- Financial Sector Assessment Programme 2020;
Further, the following regulatory instruments are imminent:
1.Proposed Prudential Standard on Significant Owners
The Proposed Prudential Standard is expected to be published for public comment by end July 2019.
2. Proposed Prudential Standard on Insurance Fees
The Proposed Prudential Standard was out for public comment in April 2019 and will go to Parliament in July 2019. It is anticipated that the Prudential Standard will be effective by October 2019.
Looking Ahead – International Developments
The International Association of Insurance Supervisors (IAIS) recently published its Strategic Plan for the period 2020 to 2024. This Strategic Plan sets out the High-Level Goals (HLGs) and Strategies of the IAIS.
Over the past decade, standard setting bodies (SSB) and financial regulators have focused significant efforts on addressing the fault lines exposed by the global financial crisis. Insurance supervisors and the IAIS undertook an intensive period of policy work to address the weaknesses exposed by the crisis. The IAIS has made significant progress on its post-crisis reform agenda, with the finalisation of the Common Framework for the Supervision of Internationally Active Insurance Groups – ComFrame – and a holistic framework for the mitigation of systemic risk in the global insurance sector expected before the end of 2019.
From 2020 onwards, finalisation and implementation of agreed reforms remain a critical priority, but the focus will shift to the next horizon. The IAIS has identified trends and developments – such as FinTech, cyber risk, climate risk, and the challenge of sustainable development – that have the potential to reshape the business of insurance in the coming years.
For more information contact Mashudu Mabogo, SAIA Legal Manager: Mashudu@saia.co.za