Let me start off by welcoming each one of you back from the December/January holidays. As the new year begins, I trust that everyone is highly energised to pick up from where they left off last year.
Looking ahead into 2020
2020 kicked off with a big bang for SAIA. I would like to highlight some of the current important matters on the industry agenda below.
The Financial Intelligence Centre (FIC) project is underway and this exercise is extremely important as it could avoid the inclusion of the non-life industry as accountable institutions as per the FIC’s original intention, or at least limit the reporting requirements to specific risk areas. As agreed by the SAIA Board, all members are expected to contribute towards SAIA’s portion of the cost of the risk assessment to be invoiced on a Net Premium Income basis in accordance with the latest Annual Report of the Regulatory Authority (Please see Circular MD - 2020-004). Please be on the lookout for your invoice.
SAIA has noted that our stakeholders are concerned as a result of Circular 80 and Circular 82 issued by the Council of Medical Schemes (CMS) whose intention was to provide direction regards the future of the application of the Demarcation Product exemption, and the implementation of the Low-Cost Benefit Options (LCBOs). The CMS has hosted a series of stakeholder engagements seeking to clarify its intentions while also soliciting their input. However, it has stated that currently it has no intention to retract neither Circular 80 nor Circular 82. The SAIA Health Insurance Forum will continue to engage the CMS with the hope of arriving at mutually agreed outcomes that will be acceptable to all impacted parties.
Following the closed session presentation made by the Commission for Employment Equity under the directive of the Department of Employment and Labour (DoEL) in July 2019 where the financial sector representatives were presented with the DoEL’s proposal to set sector Employment Equity (EE) targets as recommended in the amendment bill of the EE Act. A joint SAIA, ASISA and BASA meeting took place in January 2020 where CEOs and senior representatives of the three trade associations discussed the challenges that the sector is facing in terms of achieving the proposed EE targets and therefore the impact that the proposal from the DoEL will have on the sector’s sustainability. The industry bodies are in the process of compiling a joint industry position to be submitted to the DoEL in order to advance this discussion and SAIA will provide feedback to members through the SAIA Circulars.
The protection of property and infrastructure through structured maintenance regimes by the national and local government remains a subject of paramount importance to the non-life insurance industry. We have therefore decided to explore this important topic further at our first breakfast session which will take place on 19 March 2020. Look out for communication in the coming weeks about this informative session where we will host experts in the property insurance and sustainability space, the challenges faced by local governments in infrastructure maintenance, together with the impact of climate change and the potential impact of these on the sustainability of affordable property insurance.
SAIA will continue with most of the initiatives that began in 2019, working collaboratively with all relevant stakeholders in the financial sector in the interest of our members and consumers. As we gather momentum in the current year, our focus will remain on the SAIA Board approved initiatives that seek to mitigate industry-wide insurance risks and improve the resilience and sustainability of the non-life insurance industry in collaboration with the National Treasury (NT), the Prudential Authority (PA) at the Reserve Bank and the Financial Sector Conduct Authority (FSCA). We also look forward to engaging our peers, the Association for Savings and Investment South Africa (ASISA), Business Unity South Africa (BUSA) and the Financial Intermediaries Association (FIA) in various initiatives beneficial to both our members and the South African consumers.
SAIA Chief Executive