Guidance on conducting insurance business in terms of section 5 of the Insurance Act

Section 5(1) of the Insurance Act 2017 prohibits any person from conducting insurance (including reinsurance) business in South Africa unless licensed under the Act. Under section 5(2), a foreign re/insurer will be regarded as conducting insurance business in South Africa if that foreign re/insurer, or another person on its behalf, directly acts in South in respect of the foreign insurance business. The wording of section 5(2) is wide and includes intermediary services performed on behalf of the foreign re/insurer. In April 2019, the Prudential Authority (PA) and Financial Sector Conduct Authority (FSCA) issued guidance on the application of section 5(1) and (2). The guidance is issued under section 141 of the Financial Sector Regulation Act 2017. The guidance is for information and is not binding; but it will help to understand the authorities’ attitude to enforcement of the Act. The guidance confirms: Reverse solicitation (when a South African policyholder/insured…

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