| (1) | Subject to subregulation (5), every community scheme must insure against the risk of loss of money belonging to the community scheme or for which it is responsible, sustained as a result of any act of fraud or dishonesty committed by any insurable person. |
| (2) | For the purposes of subregulation (1), "insurable person" means any— |
| (b) | employee or agent of a community scheme who has control over the money of a community scheme; |
| (d) | contractor, employee or other person acting on behalf of or under the direction of a managing agent, |
who in the normal course of the community scheme's affairs has access to or control over the monies of the community scheme.
| (3) | The minimum amount of the fidelity insurance cover required in terms of subregulation (1) is the total value of— |
| (a) | the community scheme's investments and reserves at the end of its last financial year; and |
| (b) | 25 per cent of the community scheme's operational budget for its current financial year. |
| (4) | The insurance cover referred to in subregulation (1) must— |
| (a) | provide for payment of a loss by the insurer to the community scheme within a reasonable period after reasonably satisfactory proof of the loss has been furnished to the insurer; and |
| (b) | not require that criminal or civil proceedings be taken or completed against the insured person before payment is made under the insurance policy. |
| (5) | A community scheme is not obliged to obtain fidelity cover for an insurable person if that person has delivered to the community schemes written proof that— |
| (a) | the monies of the community scheme are covered by fidelity insurance that complies with the requirements of subregulations (3) and (4); and |
| (b) | the insurer concerned has noted the community scheme's interest in the application of the proceeds of the policy and undertaken not to cancel or withdraw cover without giving the community scheme at least 30 days written notice. |
