Answer to Question #134313 in Finance for Nsovo

Question

Regulations are describe as laws to keep parameters of systems running smoothly and within the prescribed preset of limits of the systems knowing the elements and objectives of regulations describe the regulations of a short term and long term insurance industries in south Africa

Answer 1

The Financial Services Board (registrar of insurance) (FSB) is the regulator of short-term insurance in South Africa, under the Short-term Insurance Act, 1988 (STIA). The Long-term Insurance Act, 1988 (LTIA) regulates long-term insurance in the country. All the parties running insurance businesses must be licensed under the relevant regulations. Financial advisers and brokers are authorized to offer financial advisory and intermediary services.

An insurer must be a Lloyd’s underwriter or a registered South African public company. Branches of foreign insurers are not allowed. However, foreign ownership of insurers and intermediaries is not restricted. The FSB welcomes foreign investments in South Africa. The current minimum capital requirements are ZAR5 million for short-term insurers/reinsurers and ZAR10 million for long-term insurers/reinsurers. Intermediaries require capital rendering their companies liquid and solvent. South Africa has progressive policyholder protection provisions defined under the LTIA, STIA, as well as the Financial Advisory and Intermediary Services Act, 2002 (FAIS Act)

Reference

Dinnie, D., Bracher, P., & Rodrigues, C. (2013, February 26). Ten Things to Know - Insurance Regulation in South Africa. Retrieved from Mondaq: https://www.mondaq.com/southafrica/insurance-laws-and-products/222724/ten-things-to-know--insurance-regulation-in-south-africa