Insurance Amendment Act
This section amends the Arrangement of Sections of the Long-term Insurance Act, 1998 by adding, replacing, and deleting listed section items and schedule wording.
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- Act 17 of 2003
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About this statute
This section amends the Arrangement of Sections of the Long-term Insurance Act, 1998 by adding, replacing, and deleting listed section items and schedule wording. This section amends section 1(1) of the Long-term Insurance Act, 1998 by adding and revising several definitions. Long-term insurance advertising must name the underwriting insurer, and the Registrar may order misleading communications to stop or be changed. A long-term insurer must not change its name, or a translation, shortened form, or derivative of it, without prior approval from the Registrar. This section amends section 10 of the Long-term Insurance Act, 1998, by replacing paragraph (h) with wording about maintaining sound long-term insurance business and keeping assets at a fair value not less than liabilities and the capital adequacy requirement.
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Schedule 3 for the calculation
- 1 Verify source ↗
The Arrangement of Sections of the Long-term Insurance Act, 1998,
AI-assisted research summary: This section amends the Arrangement of Sections of the Long-term Insurance Act, 1998 by adding, replacing, and deleting listed section items and schedule wording.
1. The Arrangement of Sections of the Long-term Insurance Act, 1998, is hereby amended- ( a ) by the insertion after item 15 of the following item: “15A. Reinsurers carrying on reinsurance business only, authorised to provide policy benefits under fund policies directly”; (b) by the substitution for item 18 of the following item: - “18. Notification of certain appointments, [and] terminations & resignations”; I C ) by the substitution for item 59 of the following item: “59. Misrepresentation and failure to disclose material information”; (d) by the deletion of item “Schedule 2 Method of calculation of value of assets and liabilities”; and ( e ) by the substitution in item “Schedule 3” for the words “Financial soundness method of calculation of value of assets and liabilities” of the words: “Calculation of values of assets, liabilities and capital requirement”. adequacy Amendment of section 1 of Act 52 of 1998 5 10 15 20 - 2 Verify source ↗
Section l(1) of the Long-term Insurance Act, 1998, is hereby amended-
AI-assisted research summary: This section amends section 1(1) of the Long-term Insurance Act, 1998 by adding and revising several definitions.
2. Section l(1) of the Long-term Insurance Act, 1998, is hereby amended- ( a ) by the insertion after the definition of “Board” of the following definition: ‘‘ ‘capital adequacy requirement’ means an amount which a long-term insurer is required to have in terms of paragraph 2 of Schedule 3;”; ( b ) by the insertion after the definition of “disability policy” of the following 25 definition: “ ‘fair value’ means the fair value of an asset determined by reference to South African Statements of Generally Accepted Accounting Practice;”; (c) by the insertion after the definition of “life policy” of the following definitions: 30 “ ‘linked liabilities’ means the liabilities of a long-term insurer in respect of linked policies; ‘linked policy’ means a long-term policy of which the amount of the p p or determined solely by reference categories of assets which are specified in the policy and are actually held by or on behalf of the insurer specifically for the purposes of the policy;”; (d) by the substitution for the definition of “managing executive” to the value of particular assets of the 35 following definition: “ ‘managing executive’ means the chief executive officer of a long-term every manager of that long-term insurer who reports insurer [or] [a] directly to that chief executive officer;”; and [ e ) by the insertion after the definition of “managing executive” of the following definition: 40 45 “ ’market-related policy’ means a long-term policy, other than a linked policy, of which the amount of the policy benefits is not guaranteed by the long-term insurer and or in part by reference to the value of particular assets or categories of assets;”. is to be determined in whole 35130 6 No. GOVERNMENT GAZETTE, 23 JULY 2001 Act No. 17.2003 INSURANCE AMENDMENT ACT. 2003 Amendment of section 4 of Act 52 of 1998 - 3 Verify source ↗
Section 4 of the Long-term Insurance Act, 1998, is hereby amended-
AI-assisted research summary: Long-term insurance advertising must name the underwriting insurer, and the Registrar may order misleading communications to stop or be changed.
3. Section 4 of the Long-term Insurance Act, 1998, is hereby amended- ( u ) by the substitution for subsection (3) of the following subsection: “ ( 3 ) ( a ) If any advertisement, brochure or similar [document] communication which relates to the business of a long-term insurer, or to a long-term policy, and which is being, or is to be, published or issued by a person, is misleading or contrary to the public interest or contains an incorrect statement of fact, the Registrar may by notice direct that person not to publish or issue it or to cease publishing or issuing it or to effect the changes to it which the Registrar deems fit. 5 10 f b ) An advertisement, brochure relates to a long-term policy must include the insurer underwriting the long-term policy.” ; and or similar communication which name of the long-term (b) by the substitution in subsection (7)(a) and (b) for the expression “Short-term Insurance Act, 1997” of the expression “Short-term Insurance Act; 1998” I S Amendment of section 8 of Act 52 of 1998 - 4 Verify source ↗
Section 8 of the Long-term Insurance Act, 1998,
AI-assisted research summary: A long-term insurer must not change its name, or a translation, shortened form, or derivative of it, without prior approval from the Registrar.
4. Section 8 of the Long-term Insurance Act, 1998, substitution for subsection (2) of the following subsection: is hereby amended by the “ ( 2 ) No long-term insurer shall change its name, or a translation, shortened form or derivative thereof, without the prior approval of the Registrar.”. Amendment of section 10 of Act 52 of 1998 - 5 Verify source ↗
Section 10 of the Long-term
AI-assisted research summary: This section amends section 10 of the Long-term Insurance Act, 1998, by replacing paragraph (h) with wording about maintaining sound long-term insurance business and keeping assets at a fair value not less than liabilities and the capital adequacy requirement.
5. Section 10 of the Long-term Insurance Act, 1998, substitution for paragraph (h) of the following paragraph: is hereby amended by the “(hj reasonably necessary to ensure concerned is carried on soundly and in a manner whereby the long-term insurer will [be in a position to meet] have assets with a fair value of not less than its liabilities and capital adequacy requirement,”. __ that the long-term insurance business Insertion of section 15A in Act 52 of 1998 - 6 Verify source ↗
The following section is hereby inserted in the Long-term Insurance Act, 1998,
AI-assisted research summary: A person authorised to carry on reinsurance business only may, subject to section 11, directly provide or undertake to provide policy benefits under a fund policy to any relevant fund.
6. The following section is hereby inserted in the Long-term Insurance Act, 1998, after section 15: 20 25 30 “Reinsurers carrying on reinsurance business only, authorised to provide policy benefits under fund policies directly l5A. Notwithstanding sections 15(4) and 70, a person who is, by virtue of registration under this Act, authorised to cany on reinsurance business only may, subject to section 11, carry on the business of providing or undertaking to provide policy benefits in terms of a fund policy directly to any fund contemplated in the definition of ‘fund’ in section l ( l).”. 35 Substitution of section 18 of Act 52 of 1998 - 7 Verify source ↗
The following section is hereby substituted for section
AI-assisted research summary: A long-term insurer must tell the Registrar about director or managing executive appointments, terminations, and resignations within 30 days, and give reasons for terminations or resignations.
7. The following section is hereby substituted for section 18 of the Long-term Insurance Act, 1998: “Notification of certain appointments, terminations and resignations 18. (1) A long-term insurer shall notify the Registrar, in the form and of in respect of every director or the information required by the Registrar, managing executive appointed by terminated by it, or who it or whose appointment has been has resigned, within 30 days after such 40 45 8 GOVERNMENT No. 25230 GAZETTE, 23 JULY 2003 Act No. 17,2003 INSURANCE AMENDMENT ACT. 2003 appointment or termination or resignation, as the case may be: together with the reasons for any such termination or resignation. (2) Any such director or managing executive who resigns or whose appointment has been terminated by a long-term insurer shall, at the request of the Registrar, inform the Registrar in writing of any matter relating to the affairs of that insurer of which the director or managing executive became aware in the performance of his or her duties and which may prejudice the insurer’s ability to comply with this Act. (3) No information furnished by a director or managing executive any subsequent criminal terms of subsection (2) may be used in proceedings against such director or managing executive.” in Amendment of section 24 of Act 52 of 1998 - 8 Verify source ↗
Section 24 of the Long-term Insurance Act, 1998, is hereby amended-
AI-assisted research summary: This section amends section 24 of the Long-term Insurance Act to update the kinds of share-related actions and registration conditions that may be included.
8. Section 24 of the Long-term Insurance Act, 1998, is hereby amended- ( a ) by the substitution in paragraph (u) for subparagraph (vi) of the following subparagraph: “(vi) reduce its share capital Companies Act];”; and [in terms of sections 83 and 84 of the (b) by the addition to paragraph (a) of the following subparagraphs and proviso: “(vii) issue different classes of ordinary shares; (viii) convert any of its ordinary shares of a particular class into ordinary shares of another class; (ix) allow its subsidiary to acquire directly or indirectly shares in it in terms of section 89 of the Companies Act: Provided that such conditions may, notwiihstanding paragraphs (uj, (bj and (c) of section 11(1), include a contemplated in sections 10 and 11, and that in any such case section 1 l(2) shall apply with the necessary changes;”. varied or a new registration condition Amendment of section 26 of Act 52 of 1998 - 9 Verify source ↗
Section 26 of the Long-term Insurance Act, 1998, is hereby amended-
AI-assisted research summary: This section amends Section 26 to require Registrar approval before a person acquires or holds certain shares or interests in a long-term insurer.
9. Section 26 of the Long-term Insurance Act, 1998, is hereby amended- (a) by the substitution for subsection (1) of the following subsection: “(1) Subject to this section, no person shall, without the approval of the Registrar, acquire or hold shares or any other interest in a long-term insurer which results in that person, directly or indirectly, alone or with [an associate] a related party, exercising control over that long-term insurer. ” ; 5 10 15 20 25 30 35 ( b ) by the substitution for subsection (2) of the following subsection: shares in a long-term insurer “(2) No person shall acquire if the aggregate nominal value of those shares, by itself or together with the aggregate nominal value of the shares already owned by that person or by that person and his, her or its [associates] related parties, will amount to 40 25 percent or more of the total nominal value of all of the issued shares of the long-term insurer concerned, without approval of the Registrar.”; first having obtained the (c) by the substitution in subsection (3)(u) for subparagraph (i) of the following subparagraph: 45 “(i) subject to the aggregate nominal value of the shares owned by the person concerned and his, her or its [associates] related parties not exceeding such percentage as may be determined by the Re,‘ uistrar without further approval in terms of this section;”; (d) by the substitution in subsection (3)(c) for the words preceding subparagraph 50 (i) of the following words: “may be refused if the person Concerned, alone or with his, her or its [associates] related parties, in the long-term insurer-”: has not already owned shares I O - ~~~ ~~~~~ NO. 25330 ~ ~~ GAZETTE. GOVERNMENT 23 JULY 2003 Act No. 17,2003 INSURANCE AMENDMENT .4CT, 2003 ( e ) by the substitution in subsection (5) for the words preceding paragraph ( a ) of the following words: “For the purposes of this section [‘associate’] ‘related party’, in relation to-”; and (f) by the substitution in subsection (6) for the words preceding paragraph (a) of 5 the following words: “For the purposes of this section a person shall be deemed to exercise control over a long-term insurer if that person, alone or with [associates] related parties-”. Amendment of section 29 of Act 52 of 1998 - 10 Verify source ↗
Section 29 of the Long-term Insurance Act, 1998, is hereby amended-
AI-assisted research summary: This section amends section 29 of the Long-term Insurance Act, 1998, to change wording about liabilities and capital adequacy requirements.
10. Section 29 of the Long-term Insurance Act, 1998, is hereby amended- ( a ) by the substitution paragraph: in subsection (1) for paragraph ( b ) of the following “(b) providing for its liabilities and capital adequacy requirement; and”; and ( b ) by the substitution in subsection (1) for the words following on paragraph (c) of the following words: “so as to be in a position to meet its liabilities and capital adequacy requirement at all times.”. Amendment of section 30 of Act 52 of 1998 10 15 20 - 11 Verify source ↗
Section 30 of the Long-term Insurance Act, 1998, is hereby amended-
AI-assisted research summary: A long-term insurer must keep enough assets to cover its liabilities and capital adequacy requirements, and it must not declare or pay dividends if doing so would breach those tests.
11. Section 30 of the Long-term Insurance Act, 1998, is hereby amended- (u) by the substiiution i-ur subsection ( i j of tine following subsection: “( 1) A long-term insurer shall- (a) have assets the aggregate value of which, on any day, is not less than the aggregate value, on that day, of its liabilities and capital adequacy 25 requirement; and”; (b) subject to section 32, have, in the Republic, assets, the aggregate value of which, on any day, is not less than the aggregate value, on that day, of those of its liabilities which are to be met in the Republic, and the capital adequacy requirement in respect of those liabilities, 30 when the values of those assets, [and] liabilities and capital adequacy requirement are calculated [by means of- (i) the method set out in Schedule 2; and (ii) the financial soundness method] as set out in Schedule 3.”; and ( b ) by the substitution for subsection (2) of thefollowing subsection: 35 “(2) A long-term insurer shall not declare a dividend or pay a dividend to its shareholders [if, and for as long as,]- ( a ) while it fails to comply with subsection (1); ( b ) if that would result in it failing to comply with subsection (1); or - (c) if [the], after such declaration or payment [of the dividend would 40 comply with subsection (l)], it would have result in it failing to assets the aggregate value of which would be less than the aggregate value of its liabilities, issued share capital and non-distributable reserves.”. Amendment of section 31 of Act 52 of 1998 45 - 12 Verify source ↗
Section 31 of the Long-term Insurance Act,
AI-assisted research summary: A long-term insurer must keep qualifying assets in the Republic, subject to section 32 and specified limits and approvals.
12. Section 31 of the Long-term Insurance Act, 1998, is hereby amended by the substitution for subsection (1) of the following subsection: “ ( I ) Subject to section 32, a long-term insurer shall. in the Republic, have assets, other than assets in respect of linked liabilities [referred to in section 33(2)]- ( a ) which have an aggregate value which, on any day, is not less than the 50 aggregate value, on that day, of those of its liabilities which have to be met in the Republic, and minimum capital adequacy requirement, when the values of those assets are calculated by reference to their [market] - fair value [as 12 No 25230 GOVERNMENT GAZETTE. 23 JULY 2003 Act No. 17,2003 INSURANCE AMENDMENT ACT, 2003 defined in the regulations] and the values of those liabilities, other than the said linked liabilities, and minimum capital adequacy requirement, are calculated Tbv means of the method1 as set out in Schedule 121 3: and = a - ( b ) which are ofihe kinds specified in Sihedule 1; and (c) which have a [market] fair value [, as defined in the regulations,] which, 5 when expressed as a percentage of the aggregate value of its liabilities minimum capital adequacy requirement referred to in paragraph (a), does not exceed the percentage specified in the regulations in respect of particular kmds or categories of those assets, unless the Registrar otherwise approves either in advance or at any time after having received the notice referred to in 10 section 29(3)- (i) in a particular case; (ii) for the specified period; and (iii) subject to such conditions as the Registrar may determine.”. Amendment of section 33 of Act 52 of 1998 15 - 13 Verify source ↗
Section 33 of the Long-term Insurance Act, 1998, is hereby amended-
AI-assisted research summary: This section amends section 33 of the Long-term Insurance Act, 1998 by changing subsection (1) and deleting subsection (2).
13. Section 33 of the Long-term Insurance Act, 1998, is hereby amended- (a) by the substitution for subsection (1) of the following subsection: “( 1) For the purposes of this Act, the liabilities of a long-term insurer shall include its contingent liabilities for policy benefits which have not become claimable, and which are specified in [and 41.”; and [Schedules] Schedule 3 20 ( b ) by the deletion of subsection (2). Amendment of section 34 of Act 52 of 1998 - 14 Verify source ↗
Section 34 of the Long-term Insurance Act, 1998, is hereby amended-
AI-assisted research summary: This provision amends section 34 of the Long-term Insurance Act, 1998.
14. Section 34 of the Long-term Insurance Act, 1998, is hereby amended- (a) by the addition to subsection (1) of the following paragraph: 25 “ ( e ) include in its assets shares held directly or indirectly in its holding company,”; and ( b ) by the substitution for paragraph (a) of subsection (2) of the following paragraph: “ ( a ) derivatives designated as an asset in respect of a linked policy 30 [referred to in section 33(2)];”. Amendment of section 36 of Act 52 of 1998 - 15 Verify source ↗
Section 36 of the Long-term Insurance Act, 1998,
AI-assisted research summary: This provision amends section 36 of the Long-term Insurance Act, 1998, by numbering the first subsection as (1).
15. Section 36 of the Long-term Insurance Act, 1998, is hereby amended by the insertion of the figure (1) at the beginning of the first subsection, which currently is not numbered. 35 Amendment of section 39 of Act 52 of 1998 - 16 Verify source ↗
Section 39 of the Long-term Insurance Act, 1998, is hereby amended
AI-assisted research summary: This section amends section 39 of the Long-term Insurance Act, 1998 by replacing paragraph (c), and the substituted wording includes a condition tied to payment of a specified cost in section 38(l)(c)(i).
16. Section 39 of the Long-term Insurance Act, 1998, is hereby amended by the substitution for paragraph (c) of the following paragraph: “(cl unless payment of the [costs] cost referred to in section 38(l)(c)(i) has been made Amendment of section 44 of Act 52 of 1998 - 17 Verify source ↗
Section 44 of the Long-term Insurance Act, 1998,
AI-assisted research summary: A long-term insurer is exempt from subsection (1) when it lends money to a policyholder secured by a policy it issued.
17. Section 44 of the Long-term Insurance Act, 1998, is hereby amended by the addition of the following subsection: “(4) Subsection (1) shall not apply to a long-term insurer if it lends money to one of its policyholders upon the security of a long-term policy issued by itself.”. 45 Amendment of section 47 of Act 52 of 1998 - 18 Verify source ↗
Section 47 of the Long-term Insurance Act, 1998,
AI-assisted research summary: This provision amends section 47 of the Long-term Insurance Act, 1998, and says paragraph (a) does not apply to certain bank or mutual bank receipts.
18. Section 47 of the Long-term Insurance Act, 1998, is hereby amended by the addition to subsection (2) of the following paragraph, the existing subsection becoming paragraph (a): “ ( b ) Paragraph (a) does not apply to a receipt issued by a bank as defined in 50 section 1 of the Banks Act, 1990 (,4ct No. 9 1 of 1990), or by a mutual bank as 40 secured.”. or 14 No. 25230 GOVERNMENT GAZETTE, 23 JULY 2003 Act No. 17,2003 INSURANCE AMENDMENT ACT, 2003 defined in section 1 of the Mutual Banks Act, 1993 (Act No. 124 of 1993).”. Amendment of section 59 of Act 52 of 1998 - 19 Verify source ↗
Section 59 of the Long-term Insurance Act, 1998,
AI-assisted research summary: This section changes the insurance rule on misrepresentation and failure to disclose material information.
19. Section 59 of the Long-term Insurance Act, 1998, is hereby amended by the substitution for the heading and subsection (1) of the following heading and subsection, respectively: 5 Misrepresentation and failure to disclose material information 59. (1) (ai Notwithstanding anything in a long-term policy [contained], whether entered into before or after the commencement of this Act, but subject to subsection (2)- [(a)] ci) the policy shall not be invalidated; [(b)] - (ii) the obligation of the long-term insurer thereunder shall not be to the contrary contained 10 excluded or limited; and [(c)] (iii) the obligations of the policyholder shall not be increased, on account of any representation made to the insurer which is not true, or failure to disclose information, whether disclosure has been warranted that representation or non-disclosure is such as to be likely to have materially affected the assessment of the risk under the policy concerned at the time of its issue or at the time of any variation thereof. to be true and correct, unless or not the representation or 15 (bj The representation or non-disclosure shall be regarded as material if 20 a reasonable, prudent person would consider that the particular information constituting the representation or which was not disclosed, as the case may be, should have been correctly disclosed to the insurer so that the insurer to the effect of such information on the could form its own view as assessment of the relevant risk.”. 25 Substitution of certain expression in Afrikaans text of Act 52 of 1998 - 20 Verify source ↗
The Long-term Insurance Act, 1998, is hereby amended by the substitution in the
AI-assisted research summary: This provision amends wording in the Long-term Insurance Act, 1998 by substituting terms in specified definitions and sections.
20. The Long-term Insurance Act, 1998, is hereby amended by the substitution in the 1(1), and in expression “bestuurder” of the Afrikaans text in the definition of “uitvoerende bestuurder” in section 22(1) and 23(3)(b) for the sections 9(3)(b)(ii), expression “bestuur”. 30 Amendment of Schedule 1 to Act 52 of 1998 - 21 Verify source ↗
Schedule 1 to the Long-term Insurance Act, 1998, is hereby amended-
AI-assisted research summary: This section amends Schedule 1 to the Long-term Insurance Act, 1998, including the definition of “securities” and several approval/condition powers for the Registrar.
21. Schedule 1 to the Long-term Insurance Act, 1998, is hereby amended- ( a ) by the substitution in paragraph 1 for the definition of “securities” of the following definition: ‘‘ ‘securities’ includes bills, bonds, debentures and debenture stock, loan 35 stock, promissory notes, annuities, negotiable certificates of deposit and other financial instruments [of whatever nature] prescribed by the Registrar;”; ( b ) by the substitution in paragraph 2(b) for subparagraph (i) of the following subparagraph: 40 “(i) an over-the-counter instrument, it is capable of being readily closed for which the relevant out and is entered into with a counterparty criteria have been approved by the Registrar subject to such conditions as he or she may determine;”; ( c ) by the substitution in paragraph 3 for subitem (1) of item 16 of the following 45 subitem in the Table: “(1) Shares and [debentures] securities issued by a company incorporated in the Republic.”; (dl by the substitution in the said Table for paragraphs (a) and (b), respectively, of item 16(5) of the following paragraphs: “ ( a ) Listed- 50 (i) securities issued by a government of a country other than the Republic; or 16 No. 35230 GOVERNMENT GAZETTE. 23 JULY 2003 Act No. 17,2003 INSURANCE AMENDMENT ACT. 2003 (ii) securities and shares issued by an institution incorporated outside the Republic [, in respect of which the Registrar has recognised the- (uu) stock exchange outside the Republic; or (bb) country, other than the Republic, in which the market concerned is situated, regulated S subject to the conditions determined by the Registrar]. (b) A credit balance in an account with, or a deposit, including a negotiable certificate of deposit or a bill, accepted by, an institution incorporated outside the Republic, [in a country approved by the 10 Registrar,] which would have been a bank in terms of the Banks Act, 1990, if it were incorporated in the Republic.”; and ( e ) by the substitution in the said Table for item 20 of the following item: of a long-term policy; “20. Other claims, n.e.s., against- (a) a long-term insurer in terms f b ) a person in the Republic; and ( c ) a body corporate and any stock or shares in a body corporate which is not incorporated and registered in the Republic but which, in the opinion of the Registrar, carries on business in the Republic and which has been approved by the Registrar 20 generally by notice in the Gazette and subject to the conditions determined by the Registrar and specified in the notice.”. 1s Repeal of Schedule 2 to Act 52 of 1998 - 22 Verify source ↗
The Long-term Insurance Act. 1998, is hereby amended by the repeal of Schedule
AI-assisted research summary: This section amends the Long-term Insurance Act, 1998 by repealing Schedule 2 and substituting Schedule 3.
22. The Long-term Insurance Act. 1998, is hereby amended by the repeal of Schedule 2. Substitution of Schedule 3 to Act 52 of 1998 - 23 Verify source ↗
The following Schedule is hereby substituted for Schedule 3 to the Long-term
AI-assisted research summary: This section replaces Schedule 3 of the Long-term Insurance Act, 1998 with a new Schedule 3.
23. The following Schedule is hereby substituted for Schedule 3 to the Long-term Insurance Act, 1998: “Schedule 3 (Sections 30 and 31) Calculation of values of assets, liabilities and capital adequacy requirement Definition - 1 Verify source ↗
For the purposes of this Schedule ‘approved reinsurance policy’
AI-assisted research summary: This section defines “approved reinsurance policy” for this Schedule.
1. For the purposes of this Schedule ‘approved reinsurance policy’ 25 30 35 means- (a) for the purposes of calculating the contingent liabilities of a long-term policies in terms of which the insurer under unmatured long-term policy benefits are to be provided- (i) in the Republic, any proportional reinsurance policy in terms of which the reinsurer is liable for the liabilities under unmatured 40 policies which remain in force until the contingent liability under unmatured policies has expired, entered into by the long-term insurer with- (aa) another long-term insurer registered to do long-term busi- ness of the same class, only if that reinsurance policy is also to be discharged in the Republic; or 45 (bb) another insurer approved by the Registrar to the extent and subject to the conditions determined by the Registrar; or 18 No. 25230 GOVERNMENT GAZETTE, 23 JULY 2003 Act No. 17, 2003 INSURANCE AMENDMENT ACT. 2003 ( c c j any reinsurance effected prior to 1 January 1952. and relating to long-term policies issued before that date; or (ii) outside the Republic, a reinsurance and capital adequacy requirement policy relating to the con- contingent liabilities cerned; or jbj for the purposes of calculating the liabilities of a long-term insurer other than contingent liabilities under unmatured long-term policies, any reinsurance. Calculation of values - 2 Verify source ↗
The values of assets. liabilities and the capital adequacy requirement
AI-assisted research summary: The section deems the asset, liability, and capital adequacy calculations to comply with the Schedule and any requirements prescribed by the Registrar, after consulting the Actuarial Society of South Africa.
2. The values of assets. liabilities and the capital adequacy requirement in terms of this Schedule if the shall be deemed to have been calculated requirements set out in this Schedule and the requirements prescribed by the Registrar, after consulting the Actuarial Society of South Africa, have Seen complied with in making the calculations. Effect of reinsurance - 3 Verify source ↗
The contingent liabilities under unmatured policies shall be the net of
AI-assisted research summary: Contingent liabilities under unmatured policies are to be calculated net of contingent liabilities covered by approved reinsurance policies.
3. The contingent liabilities under unmatured policies shall be the net of contingent liabilities covered by approved reinsurance policies. Amounts to be disregarded - 4 Verify source ↗
For the purposes of the calculation of the value of assets-
AI-assisted research summary: When calculating asset value, only specified assets may be counted, and several items must be disregarded.
4. For the purposes of the calculation of the value of assets- ( a ) only such assets actually insurer or those approved by the Registrar in terms of section 34( l)(a) and (bj, may be taken into account; and jh) there shall be disregarded- held by the long-term 5 10 15 20 (i) an amount which remains unpaid after the expiry of a period of 12 months from the date on which it became due and payable; 25 (ii) an amount representing administrative, organisational or busi- ness extension expenses incurred directly or indirectly in the carrying on of long-term insurance business; (iii) an amount representing goodwill or an item of a similar nature; (iv) an amount representing a negative liability in respect of a 30 long-term policy in terms of which the long-term insurer concerned provides or undertakes to provide a policy benefit: Provided that this provision shall not be construed as precluding the deduction of a negative liability policy from liabilities; in respect of a long-term (v) an amount representing a prepaid expense or a deferred expense: and (vi) an amount representing a reinsurance contract in terms of which the long-term insurer is the policyholder, except to the extent thai it represents a in terms of the reinsurance contract. claim against a reinsurer 35 40 Calculation subject to certain provisions - 5 Verify source ↗
For the purposes
AI-assisted research summary: When calculating contingent liabilities, certain optional future-premium amounts are treated as future premiums and disregarded unless they increase net liability; no allowance is made for future profits from future long-term insurance policies.
5. For the purposes of the calculation of the value of contingent liabilities- ( a ) where a portion of a future premium is not contractually payable but 45 can become payable at the option of the policyholder, such portion of the benefits purchased thereby shall be a future premium and 20 No. 25230 GOVERNMENT GAZETTE, 23 JULY 2003 Act No. 17,2003 INSURANCE AMENDMENT ACT. 2003 disregarded, unless it causes an increase in the net liability, in which case it shall be valued; and (b) no allowance shall be made for potential profits to be earned from long-term insurance policies which the long-term insurer may enter into in future. 5 Registrar may reject certain values - 6 Verify source ↗
Notwithstanding paragraph 2, if the Registrar is not satisfied that the
AI-assisted research summary: If the Registrar is not satisfied with a valuation, the Registrar may direct the insurer to appoint another person at the insurer’s cost, or direct the long-term insurer to use another valuation method set by the Registrar.
6. Notwithstanding paragraph 2, if the Registrar is not satisfied that the value of an requirement calculated in terms of this Schedule reflects a proper value, the Registrar may- asset, a contingent liability or the capital adequacy 1 10 (a) direct the insurer to appoint another person, at the cost of the insurer, to place a proper value on that asset, contingent liability or capital adequacy requirement; or (hj direct the long-term insurer to calculate the value in another manner which the Registrar determines and which will produce a proper value. 15 Valuation of other liabilities 7. 1) The liabilities of a lon -term insurer, other than its contin ent liabilities under long-term policies, shall be determined with South African Statements Practice. (2) Notwithstanding subparagraph 1 2o all obligations to other creditors have been amount (I), any liability of a long-term ar,y fight t= have *e insurer jn TPcnPCt of which its cre&tGr his ~ G x ; P , ~ obligation discharged until discharged in determined by the long-term insurer of Generally Accepted Accounting and approved by the Registrar.”. valued in a manner in accordance full, shall be and for an --r- 25 Amendment of Arrangement of Sections of Act 53 of 1998 - 24 Verify source ↗
The Arrangement of Sections of the Short-term Insurance Act, 1998,
AI-assisted research summary: This section amends the arrangement of sections for the Short-term Insurance Act, 1998 by adding item 15A and replacing items 18 and 53.
24. The Arrangement of Sections of the Short-term Insurance Act, 1998, is hereby amended- ( a ) by the insertion after item 15 of the following item: “ 15A. Reinsurers carrying on reinsurance business only, authorised to 30 enter into certain short-term policies directly”; ( b ) by the substitution for item 18 of the following item: “18. Notification of certain appointments, [and] terminations gnJ resignations”; and (c) by the substitution for item 53 of the following item: “53. Misrepresentation and failure to disclose material information”. Amendment of section 1 of Act 53 of 1998 - 25 Verify source ↗
Section l(1) of the Short-term Insurance Act, 1998, is hereby amended-
AI-assisted research summary: This section amends three definitions in the Short-term Insurance Act, 1998.
25. Section l(1) of the Short-term Insurance Act, 1998, is hereby amended- ( a ) by the substitution for the definition of “Lloyd’s underwriter” of the following definition: ‘* ‘Lloyd’s underwriter’ means member of Lloyd’s;’’; an underwriting or non-underwriting 35 40 ( b ) by the substitution for the definition of “managing executive” of the following definition: “ ‘managing executive’ means the chief executive officer of a short-term 45 insurer [or] directly to that chief executive officer;”; and [a] every manager of that short-term insurer who reports (c) by the substitution for the words preceding paragraph ( a ) of the definition of “representative” of the following words: person a natural ‘‘ ‘representative‘ means employed-”. 50 22 No. 25130 GAZETTE, GOVERNMENT 13 JULY 2003 Act No. 17,2003 LVSURANCE AMENDMENT ACT. 2003 Amendment of section 4 of Act 53 of 1998 - 26 Verify source ↗
Section 4 of the Short-term Insurance Act, 1998, is hereby amended-
AI-assisted research summary: Section 4 is amended to let the Registrar stop or change misleading or improper advertisements, brochures, or similar communications about short-term insurance or short-term policies.
26. Section 4 of the Short-term Insurance Act, 1998, is hereby amended- ( a ) by the substitution for subsection (3) of the following subsection: “(3) QLJ If any advertisement, brochure or similar [document] communication which relates to the business of a short-term insurer, or to a short-term policy. and which is being, or is to be, published or issued by a person. is misleading or contrary to the public interest or contains an incorrect statement of fact, the Registrar may by notice direct that person not to publish or issue it or to cease publishing or issuing it or to effect the deems changes to it which the Registrar fit. 5 10 (b) An advertisement, brochure or similar communication which include the name of the short-term relates to a short-term policy must insurer underwriting the short-term policy.”; and (b) by the substitution in paragraphs ( a ) and ( b ) of subsection (7) for the expression “Long-term Insurance Act: Insurance Act, 1998”. 1997” of the expression “Long-term 15 Amendment of section 8 of Act 53 of 1998 - 27 Verify source ↗
Section 8 of the Short-term
AI-assisted research summary: A short-term insurer liable under a short-term insurance policy must not use certain restricted terms in the policy or related communications.
27. Section 8 of the Short-term Insurance Act, 1998. is hereby amended by the substitution for subsection (6) of the following subsection: “(6) No short-term insurer which is liable under a short-term insurance policy [shall change its name without the mior amroval of the Registrar1 mav refer to or use in any such policy or advertisement, brochure or similar communication the term ‘funera!’ or %mid’ or 2q7 deriwtive thereef.”. - - * Q 20 Insertion of section 15A in Act 53 of 1998 - 28 Verify source ↗
The following section is hereby inserted in the Short-term Insurance Act, 1998, 25
AI-assisted research summary: Reinsurers carrying on reinsurance business only are authorised to enter into certain short-term policies directly.
28. The following section is hereby inserted in the Short-term Insurance Act, 1998, 25 after section 15: “Reinsurers carrying on reinsurance business only, authorised to enter into certain short-term policies directly - 15A Verify source ↗
The Registrar may, subject to section 11, and notwithstanding
AI-assisted research summary: The Registrar may directly enter into short-term reinsurance policies, subject to section 11.
15A. The Registrar may, subject to section 11, and notwithstanding business only, to directly enter into short-term short-term reinsurance policies.”. policies other than Amendment of section 17 of Act 53 of 1998 - 29 Verify source ↗
Section 17 of the Short-term Insurance Act,
AI-assisted research summary: This section amends Section 17 of the Short-term Insurance Act by replacing a paragraph about the insurer’s name.
29. Section 17 of the Short-term Insurance Act, 1998, is hereby amended by the substitution for paragaph (bj of the following paragraph: .‘(LJ) its name, or a translation, shortened form or derivative thereof,”. 30 35 Substitution of section 18 of Act 53 of 1998 - 30 Verify source ↗
The following section
AI-assisted research summary: A short-term insurer must tell the Registrar about director or managing executive appointments, terminations, and resignations within 30 days, and the Registrar may require written information from those persons about relevant matters.
30. The following section is hereby substituted for section 18 of the Short-term Insurance Act. 1998: “Notification of certain appointments, terminations and resignations 40 18. il) A short-term insurer shall notify the Registrar, in the form and of the information required by the Registrar, in respect of every director or managing executive appointed terminated by it, or who has resigned, within appointment or termination or resignation, as the case may be, together with the reasons for any such termination or resignation. by it or whose appointment has been 30 days after such 45 24 NO. 25230 GOVERNMENT GAZETTE, 23 JULY 2003 Act No. 17,2003 INSURANCE AMENDMENT ACT, 2003 the appointment has been terminated by a short-term insurer shall, at request of the Registrar, inform the Registrar in writing of any matter relating to the affairs of that insurer of which the director or managing executive became aware in the performance of his or her duties and which may prejudice the insurer’s ability to comply with this Act. (3) No information furnished by a director or managing executive in terms of subsection (2) may be used in any subsequent criminal proceedings against such director or managing executive.”. Amendment of section 23 of Act 53 of 1998 - 31 Verify source ↗
Section 23 of the Short-term Insurance Act, 1998, is hereby amended-
AI-assisted research summary: This amendment lets a short-term insurer issue different classes of ordinary shares, convert shares between classes, and let a subsidiary acquire shares, subject to stated conditions.
31. Section 23 of the Short-term Insurance Act, 1998, is hereby amended- (ai by the substitution in paragraph ( a ) for subparagraph (vi) of the following subparagraph: “(vi) reduce its share capital Companies Act];”; and [in terms of sections 83 and 84 of the 5 10 15 (b) by the addition to paragraph ( a ) of the following subparagraphs and proviso: “(vii) issue different classes of ordinary shares; (viii) convert any of its ordinary shares of a particular class into ordinary shares of another class; (ix) allow its subsidiary to acquire directly or indirectly shares in terms of 20 section 89 of the Companies Act: Provided that such conditions may, notwithstanding paragraphs ( a ) , ( b ) and (c) of section 11( l), include a varied contemplated in sections i0 and i I , and ihai in any such case section i i ( 2 j shall apply with the necessary changes;” or a new registration condition 25 Amendment of section 25 of Act 53 of 1998 - 32 Verify source ↗
Section 25 of the Short-term Insurance Act, 1998, is hereby amended-
AI-assisted research summary: A person may not acquire or hold shares or any other interest in a short-term insurer if that would give control, unless the Registrar approves it.
32. Section 25 of the Short-term Insurance Act, 1998, is hereby amended- ( a ) by the substitution for subsection (1) of the following subsection: “(1) Subject to this section, no person shall, without the approval of the Registrar, acquire or hold shares or any other interest in a short-term insurer which results in that person, directly or indirectly, alone or with [an associate] a related party, exercising control over that short-term insurer.”; ( b ) by the substitution for subsection (2) of the following subsection: in a short-term insurer “(2) No person shall acquire shares if the aggregate nominal value of those shares, by itself or together with the aggregate nominal value of the shares already owned by that person or by that person and his, her or its [associates] related parties, will amount to 25 percent or more of the total nominal value of all of the issued shares of the short-term insurer concerned, without approval of the Registrar.”; first having obtained the (c) by the substitution in subsection (3)(a) for subparagraph (i) of the following subparagraph: “(i) subject to the aggregate nominal value of the shares owned by the person concerned and his, her or its [associates] related parties not exceeding such percentage as may be determined by the Registrar without further approval in terms of this section;”; id) by the substitution in subsection (3)(c) for the words preceding subparagraph (i) of the following words: “may be refused if the person concerned, alone or with his, her or its [associates] related parties, has in the short-term insurer-” not already owned shares : ( e ) by the substitution in subsection ( 5 ) for the words preceding paragraph ( a ) of the following words: 30 35 40 45 50 26 No. 75230 GAZETTE. GOVERNMEVT 23 JULY 2003 Act No. 17,2003 LNSTSURANCE AMENDMENT .4CT, 2003 “For the purposes of this section [‘associate’] ‘related party’, in relation to-”: and (f) by the substitution in subsection ( 6 ) for the words preceding paragraph (a) of the following words: “For the purposes of this section a person shall he deemed to exercise control over a short-term insurer if that person, alone or with [associates] related parties-”. 5 Amendment of section 33 of Act 53 of 1998 - 33 Verify source ↗
Section 33 of the Short-term Insurance Act, 1998,
AI-assisted research summary: This section amends section 33 of the Short-term Insurance Act, 1998 by inserting a new paragraph in subsection (1).
33. Section 33 of the Short-term Insurance Act, 1998, is hereby amended by the insertion in subsection (1) after paragraph (11) of the following paragraph: or indirectly held “ ( e ) include in its assets, shares directly in its holding 10 companl,”. Amendment of section 47 of Act 53 of 1998 - 34 Verify source ↗
Section 47 of the Short-term Insurance Act, 1998,
AI-assisted research summary: The policyholder and the person who entered into the short-term policy are entitled, on request, to receive a copy of the policy, subject to a fee that cannot exceed the Registrar-prescribed amount.
34. Section 47 of the Short-term Insurance Act, 1998, is hereby amended by the substitution for subsection (2) of the following subsection: “(2) The policyholder, and the person who entered into the short-term policy, shall be entitled[, against payment of a fee not exceeding that which may be prescribed by the Registrar,] to be provided, upon request, with a copy of the policy.”. Amendment of section 53 of Act 53 of 1998 - 35 Verify source ↗
Section 53 of the Short-term Insurance Act, 1998, is hereby amended by the
AI-assisted research summary: This provision amends section 53 so that, in certain cases of misrepresentation or non-disclosure, the policy is not invalidated, the insurer’s obligation is not reduced, and the policyholder’s obligations are not increased.
35. Section 53 of the Short-term Insurance Act, 1998, is hereby amended by the substitution for the heading and subsection (1) of the following heading and subsection respectively: 15 20 Misrepresentation and failure to disclose material information 53. (1) (a) Notwithstanding anything to the contrary contained in a 25 short-term policy commencement of this Act, but subject to subsection (2)- [(a)] ii) the policy shall not be invalidated; [contained], whether entered [@)]a the obligation of the short-term insurer thereunder shall not be into before or after the excluded or limited; and 3 0 [(c)] (iii) the obligations of the policyholder shall not be increased, on a c G n t of any representation made to the insurer which is not true, or failure to disclose information, whether disclosure has been warranted to be representation or non-disclosure is such as to be likely to have materially 35 affected the assessment of the risk under the policy concerned at the time of its issue or at the time of any renewal or variation thereof. or not the representation true and correct, unless that ( b ) The representation or non-disclosure shall be regarded as material if a reasonable, prudent person would consider that the particular information constituting the representation or which was not disclosed, as the case may 40 he, should have been correctly disclosed to the short-term insurer so that the insurer could form its own view as to the effect of such information on the assessment of the relevant risk.”. Amendment of Schedule 1 to Act 53 of 1998 - 36 Verify source ↗
Schedule 1 to the Short-term Insurance Act, 1998, is hereby amended-
AI-assisted research summary: This section amends Schedule 1 and updates how certain securities and claims are described.
36. Schedule 1 to the Short-term Insurance Act, 1998, is hereby amended- 45 ( a ) by the substitution in paragraph 1 for the definition of “securities” of the following definition: ’‘ ‘securities’ includes bills, bonds, debentures and debenture stock, loan stock, promissory notes. annuities, negotiable certificates of deposit and other financial instruments Reyistrar;”; ( b ) by the substitution subparagraph: in paragraph 2(b) for subparagraph (i) of the following [of whatever nature] prescribed by the 50 28 No. 15730 GOVERNMENT GAZETTE. 23 JULY 2003 Act No. 17,2003 INSURANCE AMENDMENT ACT, 2003 “(i) an over-the-counter instrument, it is capable of being readily closed is entered into with a counterparty for which the relevant out and criteria have been approved by the Registrar subject to such conditions as he or she may determine;”; (c) by the substitution in the Table in paragraph 3, for subitem (1) of item 16 of the 5 following subitem: “(1) Shares and [debentures] securities issued by a company incorporated in the Republic.”; id) by the substitution in the said Table for paragraphs (a) and (b), respectively, of item 16(5) of the paragraphs: following “ ( a ) Listed- (i) securities issued by a government of a country other than the Republic; or (ii) securities and shares issued by an institution incorporated Republic the outside 10 15 [, in respect of which the Registrar has recognised the- (uu) stock exchange outside the Republic; or (bb) country, other than the Republic, in which the regulated market concerned is situated, subject to the conditions determined by the Registrar]. 20 (b) A credit balance in an account with, or a deposit, including a negotiable certificate of deposit, or a bill, accepted by, an institution incorporated outside the Republic[, in a country approved by the Registrar], which would have been a bank in terms of the Banks Act, 1990, if it were incorporated in the Republic.”; and ( e ) by the substitution in the said Table for item 20 of the foiiowing item: “20. Other claims, n.e.s., against- (a) a long-term insurer in terms of a long-term policy; (b) a person in the Republic; and (c) a body corporate and any stock or shares in a body corporate 25 30 which is not incorporated and registered in the Republic but which, in the opinion of the Registrar, carries on business in the Republic and which has been approved by the Registrar generally by notice in the Gazette and subject to the conditions determined by the Registrar and specified in the notice.”. 35 Amendment of Schedule 2 to Act 53 of 1998 - 37 Verify source ↗
Part I of Schedule 2 to the Short-term Insurance Act, 1998, is hereby amended by
AI-assisted research summary: This section amends Schedule 2 by replacing subparagraph (v) with a new rule about reinsurance contracts.
37. Part I of Schedule 2 to the Short-term Insurance Act, 1998, is hereby amended by the substitution in paragraph l(a) for subparagraph (v) of the following subparagraph: “(v) an amount representing [a negative liability or] a reinsurance contract in terms of which the short-term insurer concerned is the policyholder, except to 40 the extent that it represents a claim against a reinsurer in terms of an approved reinsurance policy; and”. Amendment of Schedule 3 to Act 53 of 1998 - 38 Verify source ↗
Schedule 3 to the Short-term Insurance Act, 1998, is hereby amended-
AI-assisted research summary: This section amends Schedule 3 of the Short-term Insurance Act by changing how certain asset values are limited and by adding a proviso about when paragraph 8 stops applying.
38. Schedule 3 to the Short-term Insurance Act, 1998, is hereby amended- in paragraph 6 for subparagraph (2) of the following 45 ( a ) by the substitution subparagraph: “(2) Subject to section 63[(4)] m, the aggregate value of the assets referred to in subparagraph ( I ) shall: in respect of each particular kind or category specified by regulation, when expressed as a percentage of the aggregate minimum amount required to be held in trust at that time in 50 accordance with Schedule [3] 2, not exceed the percentage specified by regulation in relation to that kind or category of asset.”; and (6) by the substitution in paragraph 8 for the proviso to subparagraph (I), of the following proviso: 30 No. 25230 GOVERNMENT GAZETTE. 23 JULY 2003 Act No. 17.2003 INSURANCE AMENDMENT ACT. 2002 “Provided that this paragraph shall cease to apply, and the provisions of paragraphs 2 up to and inciuding 7 shall apply from the latter date without change to- (i) such policy in the event of the reinsurance, as set out in the trust deeds of the Lloyd’s Trusts, of all the obligations under the policy by another Lloyd’s syndicate; [and] or (ii) if the Registrar and Lloyd’s so agree.”. 5 Substitution of certain expression in Afrikaans text of Act 53 of 1998 . - 39 Verify source ↗
The Short-term Insurance Act, 1998, is hereby amended by the substitution in the
AI-assisted research summary: This section amends the Short-term Insurance Act, 1998 by substituting specific Afrikaans terms in defined places.
39. The Short-term Insurance Act, 1998, is hereby amended by the substitution in the Afrikaans text in the definition of “uitvoerende bestuurder” in section 1(1), and in 10 sections 913)(b)(ii), expression “bestuur”. 21(1) and 22(3)(bj for the expression “bestuurder” of the Repeal of Act 49 of 1998 - 40 Verify source ↗
The Insurance Amendment Act, 1998 (Act No. 49 of 1998), is hereby repealed.
AI-assisted research summary: This provision repeals the Insurance Amendment Act, 1998 (Act No. 49 of 1998).
40. The Insurance Amendment Act, 1998 (Act No. 49 of 1998), is hereby repealed. Short title and commencement 15 - 41 Verify source ↗
This Act is called the Insurance Amendment Act, 2003, and comes into operation
AI-assisted research summary: The Act starts on a date fixed by the President by proclamation in the Gazette.
41. This Act is called the Insurance Amendment Act, 2003, and comes into operation on a date fixed by the President by proclamation in the Gazette.
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