Conversion of South African Special Risks Insurance Association Act, 1998 (Act No. 134 of 1998)

Recognising that the South African Special Risks Association ("SASRIA") was incorporated in 1979 in terms of the Companies Act, 1973, to provide insurance against damage to property caused by political acts;

Recognising that, in terms of the Reinsurance of Damage and Losses Act, 1989, SASRIA's main business was extended and thereupon covered loss of or damage to property caused by defined political acts and non-political acts (such as riots, strikes and public disorder), as well as loss suffered by money lenders in respect of mortgage loans ("special risks");

Recognising that, due to the short-term insurance industry not being prepared to underwrite the risk in question, the Government agreed, in the public interest, to act as reinsurer of last resort;

Recognising that the Government conferred monopoly status on SASRIA by allowing it to be the sole supplier of insurance cover for special risks in the Republic;

Recognising that SASRIA was exempted from tax until the 1996 tax year and as a result thereof has accumulated substantial reserves, which it as a section 21 company is not allowed to distribute; and

Recognising that, as a result of restrictions in the Companies Act, 1973, the restructuring of SASRIA to normalise the short-term insurance industry as regards special risks could not commence.