Insurance Act, 2017 (Act No. 18 of 2017)Chapter 3 : Key Persons and Significant OwnersPart 3 : Changes in control of insurer or controlling company and nominees17. Changes in control of insurer or controlling company |
| (1) |
| (a) | This section and the provisions of the Financial Sector Regulation Act relating to significant owners do not apply to branches of foreign reinsurers, Lloyd’s underwriters or Lloyd’s. |
| (b) | The provisions of the Financial Sector Regulation Act relating to significant owners apply, with the necessary changes, to controlling companies. |
| (c) | This section applies in addition to the Financial Sector Regulation Act. |
| (2) | An insurer or a controlling company must, within 30 days of becoming aware, notify the Prudential Authority of any arrangement referred to in the provisions of the Financial Sector Regulation Act relating to significant owners. |
| (3) | The Prudential Authority may only approve an arrangement referred to in the provisions of the Financial Sector Regulation Act relating to significant owners if the Prudential Authority is satisfied, in addition to the matters specified in the Financial Sector Regulation Act, that the likely influence of the proposed significant owner, will be reasonably likely to result in, or will continue to result in— |
| (a) | key persons of the insurer or controlling company meeting the fit and proper requirements prescribed under this Act; and |
| (b) | any other licensing requirements and licensing conditions being met. |
| (4) | If the Prudential Authority is reasonably satisfied that the retention of a particular interest by a particular significant owner will be prejudicial to the insurer or controlling company, or to the policyholders of the insurer, the Prudential Authority may, in addition to any other action that the Prudential Authority may take in terms of this Act, after consultation with the insurer or controlling company and the particular significant owner direct that insurer, controlling company or significant owner to— |
| (a) | prepare and submit to the Prudential Authority a plan that is satisfactory to the Prudential Authority, under which the significant owner will, within a period that is acceptable to the Prudential Authority— |
| (i) | limit, with immediate effect, the voting rights that may be exercised by that owner by virtue of the proportion of the voting rights or the interest held; |
| (ii) | reduce the proportion of the voting rights or the interest held by that owner in the insurer or controlling company to a percentage specified; or |
| (iii) | cease to be a significant owner of the insurer or controlling company; and |
| (b) | on the Prudential Authority’s approval of the plan, implement the plan. |
| (5) |
| (a) | Despite any other law, no person may, in respect of an interest in an insurer or a controlling company, or a related person of an insurer or a controlling company, issued to that person or registered in that person’s name contrary to this Act— |
| (i) | either personally or by proxy granted to another person, cast a vote attached to that interest; or |
| (ii) | receive a dividend or any other money in respect of that interest. |
| (b) | A resolution passed by an insurer or a controlling company contrary to paragraph (a)(i), or a payment referred to in paragraph (a)(ii), is void. |
| (6) |
| (a) | Despite anything to the contrary in the Competition Act, 1998 (Act No. 89 of 1998), the Competition Commission may not make a decision in terms of section 13(5)(b) or 14(1)(b) of the Competition Act, and the Competition Tribunal may not make an order in terms of section 16(2) of the Competition Act, 1998, if— |
| (i) | the merger constitutes an acquisition of shares for which approval is required in terms of this section; and |
| (ii) | the Prudential Authority has, in the prescribed manner, issued a notice to the Commissioner specifying the names of the parties to the merger and certifying that the merger is a merger contemplated in subparagraph (i), and it is in the public interest that the merger is subject to the Financial Sector Regulation Act only. |
| (b) | Sections 13(6) and 14(2) of the Competition Act, 1998, do not apply to a merger in respect of which the Prudential Authority has issued a certificate contemplated in paragraph (a)(ii). |
| (c) | For the purposes of paragraphs (a) and (b), "merger" means a merger as defined in section 12 of the Competition Act, 1998. |