Insurance Act, 2017 (Act No. 18 of 2017)Chapter 1 : Interpretation and Objective of Act1. Definitions |
| (1) | In this Act, unless the context indicates otherwise— |
means an external, violent, unexpected and visible event;
consists of items, other than basic own funds, that may be called up by the insurer or controlling company, as the case may be, to absorb losses, excluding items that have been called up or paid;
has the meaning set out in the International Financial Reporting Standards issued by the International Accounting Standards Board or a successor body;
means the Auditing Profession Act, 2005 (Act No. 26 of 2005);
means an auditor registered in terms of the Auditing Profession Act;
consists of—
| (a) | the excess of assets over liabilities (including technical provisions that constitute the liability of the insurer arising from insurance obligations, calculated in the prescribed manner) valued in accordance with prescribed requirements, adjusted in accordance with prescribed requirements; and |
| (b) | subordinated liabilities; |
means—
| (a) | the board of directors of a company registered under the Companies Act; |
| (b) | the board of directors of a co-operative registered under the Co-operatives Act; or |
| (c) | the governing body of a person other than a company or co-operative; |
means an operating entity of a foreign reinsurer that is not a legal entity separate from the foreign reinsurer;
means an insurer that only insures first party risks;
means an insurer that only conducts insurance business through cell structures;
means an arrangement under which a person (cell owner)—
| (a) | holds an equity participation in a specific class or type of shares of an insurer, which equity participation is administered and accounted for separately from other classes or types of shares; |
| (b) | is entitled to a share of the profits and liable for a share of the losses as a result of the equity participation referred to in paragraph (a), linked to profits or losses generated by the insurance business referred to in paragraph (c); and |
| (c) | places or insures insurance business with the insurer referred to in paragraph (a), which business is contractually ring-fenced from the other insurance business of that insurer for as long as the insurer is not in winding-up; |
means non-life insurance business other than in respect of personal lines;
means the Companies Act, 2008 (Act No. 71 of 2008);
in respect of the definition of controlling company, and sections 10, 17 and 22(2), has the meaning defined in section 2 of the Companies Act;
has the meaning defined in the Financial Sector Regulation Act;
means a holding company of, or another juristic person that controls, an insurance group, which is located in the Republic, designated under Part 4 of Chapter 2 and licensed under Chapter 4;
means the Co-operatives Act, 2005 (Act No. 14 of 2005);
means the event of the life of a person or an unborn having ended;
means a member of a board of directors and any alternate of such a member;
means any event resulting in—
| (a) | the loss of a limb or sense organ, or the use thereof by a person; or |
| (b) | a person becoming so physically or mentally impaired, whether totally or partially, or temporarily or permanently, that the person is unable to— |
| (i) | continue his or her employment or own occupation, profession or trade; |
| (ii) | participate in any employment, occupation, profession or trade that is reasonably suitable for that person given, amongst other matters, his or her education, skills, experience or age; or |
| (iii) | carry on the functions required for normal activities of life; |
means insurance obligations under a life insurance policy—
| (a) | that may be a significant portion of the total insurance obligations under the policy; |
| (b) | the amount or timing of which are contractually at the discretion of the insurer; and |
| (c) | that are contractually based on— |
| (i) | in full or in part, the performance of a specified pool of policies or a specified type of policy; |
| (ii) | realised and unrealised investment returns on a specified pool of assets held by the insurer; or |
| (iii) | the profit or loss of the insurer that issues the policy; |
comprise the sum of basic own funds and those ancillary own funds approved by the Prudential Authority as meeting the prescribed criteria for such funds, adjusted in accordance with the prescribed tiering restrictions;
means any pledge, restriction or limitation (including any contractual obligation that must be fulfilled before a contractual right may be exercised) that limits access to, or the use or disposal of, an asset;
has the meaning defined in the Financial Sector Regulation Act;
means the Financial Institutions (Protection of Funds) Act, 2001 (Act No. 28 of 2001);
means the Financial Sector Code for Broad-Based Black Economic Empowerment issued in terms of section 9(1) of the Broad-Based Black Economic Empowerment Act, 2003 (Act No. 53 of 2003);
has the meaning defined in the Financial Sector Regulation Act;
means the Financial Sector Regulation Act, 2017;
means—
| (a) | in respect of a captive insurer, the operational risks of— |
| (i) | the group of companies of which the insurer is a part; |
| (ii) | any associate of a company that is part of the group of companies referred to in subparagraph (i); or |
| (iii) | any joint arrangement that a company that is part of the group of companies referred to in subparagraph (i) participates in; |
| (b) | in respect of a cell captive insurer, the operational risks of the cell owner and the operational risks of— |
| (i) | the group of companies of which the cell owner is a part; |
| (ii) | any associate of a company that is part of the group of companies referred to in subparagraph (i); or |
| (iii) | any joint arrangement that a company that is part of the group of companies referred to in subparagraph (i) participates in; |
means—
| (a) | in relation to a key person, personal character qualities of honesty, integrity, and competence, including experience, qualifications and knowledge as may be prescribed; and |
| (b) | in relation to a significant owner, qualities of honesty and integrity and financial standing as may be prescribed; |
means an operating entity of an insurer that is part of the insurer in terms of its organisation and is not a legal entity separate from the insurer, but is established outside of the Republic;
means an institution authorised and supervised by a regulatory authority to perform business similar to reinsurance business as defined in this Act under the laws of a country other than the Republic;
means a person or a body of persons, whether elected or not, that manages, controls, formulates the policy and strategy of the insurer or controlling company, directs its affairs or has the authority to exercise the powers and perform the functions of the insurer or controlling company;
means any group of related or inter-related juristic persons, including a group of companies as defined in section 1 of the Companies Act;
has the meaning defined in the Financial Sector Regulation Act, and includes for purposes of this Act a person so appointed by a controlling company;
means an event relating to the health of the mind or body of a person or an unborn, other than a disability event;
means life insurance business or non-life insurance business conducted or regarded as being conducted in the Republic, and includes reinsurance business;
means the group of entities designated by the Prudential Authority under section 10;
means all obligations (other than the obligations of the policyholder), whether those obligations constitute an obligation to pay one or more sums of money, render services or meet any other obligations, under or arising from insurance policies, and, in respect of life insurance policies, includes any guarantees and discretionary participation features;
means a life insurance policy or a non-life insurance policy;
means a person licensed to conduct insurance business under this Act, and includes, unless specifically otherwise provided for in this Act, Lloyd’s, a Lloyd’s underwriter and a reinsurer;
has the meaning defined in section 1 of the Companies Act;
means any arrangement or agreement in terms of which an insurer, directly or indirectly, relies on another person that is part of that insurer’s insurance group or a related or inter-related person of the aforementioned person, for the fulfilment of an obligation;
has the meaning set out in the International Financial Reporting Standards issued by the International Accounting Standards Board or a successor body;
has the meaning defined in the Financial Sector Regulation Act;
means—
| (a) | a director; |
| (b) | a senior manager; |
| (c) | a head of a control function; |
| (d) | an auditor referred to in section 32; |
| (e) | a trustee of a trust referred to in section 41; and |
| (f) | a representative and a deputy representative of Lloyd’s or a branch of a foreign reinsurer referred to in section 34; |
means the event of the life of a person—
| (a) | having begun; |
| (b) | continuing; or |
| (c) | having continued for a period; |
means any activity conducted with the purpose of entering into or meeting insurance obligations under a life insurance policy;
means any arrangement under which a person, in return for provision being made for the rendering of a premium to that person, undertakes to meet insurance obligations—
| (a) | on the happening of a life event, health event, disability event or death event; or |
| (b) | on or from a fixed determinable date or at the request of the policyholder, but excludes— |
| (i) | a deposit with an institution authorised under the Banks Act, 1990 (Act No. 94 of 1990), the Mutual Banks Act, 1993 (Act No. 124 of 1993), or the Co-operative Banks Act, 2007 (Act No. 40 of 2007); and |
| (ii) | participatory interests in a collective investment scheme registered in terms of the Collective Investment Schemes Control Act, 2002 (Act No. 45 of 2002), |
and includes a renewal or variation of that arrangement;
means the person to whom a death, disability, health or life event under an insurance policy relates, which person may be or may not be the policyholder;
means the association of persons generally known as Lloyd’s which is incorporated by the Lloyd’s Act of 1871 (34 Vict. c21), passed by the Parliament of the United Kingdom of Great Britain and Northern Ireland;
means an underwriting member or non-underwriting member of Lloyd’s;
means insurance business—
| (a) | conducted in respect of any of the following classes and sub-classes of insurance business set out in Schedule 2— |
| (i) | life insurance business, classes 1, 3, 4 or 9; and |
| (ii) | non-life insurance business, in the sub-class personal lines in— |
| (aa) | classes 1, 2, 3, 9, 11, 14 or 17; and |
| (bb) | class 10, but only to the extent that the insurance obligations directly relate to the classes referred to in item (aa); and |
| (b) | in the case of life insurance business and class 14 referred to in paragraph (a)(ii)(aa), in respect of which the aggregate value of the insurance obligations relating to each life insured under an insurance policy does not exceed the maximum amounts prescribed; and |
| (c) | in the case of non-life insurance business other than class 14 referred to in paragraph (a)(ii)(aa), in respect of which the aggregate value of the insurance obligations under an insurance policy does not exceed the maximum amounts prescribed; and |
| (d) | in respect of which the aggregate value of the insurance obligations under all insurance policies issued by the same insurer to the same policyholder does not exceed the maximum amounts prescribed under paragraphs (b) and (c); |
means an insurer licensed to conduct only microinsurance business;
means the Minister of Finance;
means any activity conducted with the purpose of entering into or meeting insurance obligations under a non-life insurance policy;
means any arrangement under which a person, in return for provision being made for the rendering of a premium to that person, undertakes to meet insurance obligations that fully or partially indemnifies loss on the happening of an unplanned or uncertain event, other than—
| (a) | a life event; or |
| (b) | a death event or disability event not resulting from an accident, |
and includes a renewal or variation of that arrangement;
means a website as defined in section 1 of the Electronic Communications and Transactions Act, 2002 (Act No. 25 of 2002), of the Prudential Authority;
for the purposes of the definition of first party risks, means the risk of incurring losses as a result of inadequate or failed internal processes, people and systems, or from external events and excludes any risks associated with the insurance obligations of an insurer;
means an outsourcing arrangement as defined in section 1 of the Financial Sector Regulation Act;
has the meaning defined in the Financial Sector Regulation Act;
means non-life insurance business where the policyholder is a natural person, acting otherwise than solely for the purposes of the person’s own business; and
means—
| (a) | the person with whom or with which an insurer enters into a life insurance policy or a non-life insurance policy; or |
| (b) | the successor in title of the person referred to in paragraph (a); |
means any direct or indirect, or partially or fully subsidised, consideration given or to be given in return for an undertaking to meet insurance obligations;
means prescribed by the Prudential Authority by Prudential Standard;
has the meaning defined in the Financial Sector Regulation Act;
means a standard prescribed by the Prudential Authority under section 63;
has the meaning as defined in section 1 of the Companies Act;
has the meaning defined in section 1 of the Financial Sector Regulation Act;
means the exercise of any power or function, or the taking of any action, by the Prudential Authority under this Act or another Act of Parliament;
means—
| (a) | an organ of state responsible for the regulation, supervision or enforcement of any law; or |
| (b) | a body similar to an organ of state referred to in paragraph (a) that is designated in terms of the laws of a foreign country as being responsible for the regulation, supervision or enforcement of legislation; |
means—
| (a) | insurance business conducted by an insurer with another insurer, where the first-mentioned insures the risks associated with the insurance obligations of the last-mentioned insurer; or |
| (b) | business similar to the insurance business referred to in paragraph (a) conducted by a person that is authorised by a regulatory authority to perform business similar to insurance business under the laws of a country other than the Republic, with an insurer; |
means a person licensed to conduct—
| (a) | only reinsurance business; or |
(b) only reinsurance business and the business referred to in section 25(7)(b), in the reinsurance class and sub-classes set out in Schedule 2, and, unless specifically provided for otherwise in this Act, includes a branch of a foreign reinsurer so licensed;
has the meaning as defined in section 1 of the Companies Act;
means an additional insurance obligation under a life insurance policy or a non-life insurance policy, which obligation is ancillary to the primary insurance obligations assumed under that policy;
for the purposes of sections 29 and 52, means a compliance scheme referred to in section 31, a recapitalisation scheme referred to in section 39 or a recovery scheme referred to in section 42;
has the meaning as defined in section 1(1) of the Financial Markets Act, 2012 (Act No. 19 of 2012);
means—
| (a) | the chief executive officer or the person who is in charge of an insurer or a controlling company; or |
| (b) | a person, other than a director or a head of a control function— |
| (i) | who makes or participates in making decisions that— |
| (aa) | affect the whole or a substantial part of the business of an insurer or a controlling company; or |
| (bb) | have the capacity to significantly affect the financial standing of an insurer or a controlling company; or |
| (ii) | who oversees the enforcement of policies and the implementation of strategies approved, or adopted, by the board of directors, |
and "senior management" has a corresponding meaning;
has the meaning as defined in section 1 of the Financial Sector Regulation Act;
means a state-owned company that conducts insurance business and is a public entity subject to the Public Finance Management Act, 1999 (Act No. 1 of 1999);
for the purposes of sections 29 and 52, means a recapitalisation strategy referred to in section 39;
means, in respect of a cell captive insurer, risks other than first party risks;
includes any Prudential Standard or Regulation prescribed or made in terms of this Act;
means transformation as envisaged by the Financial Sector Code for Broad-Based Black Economic Empowerment issued in terms of section 9(1) of the Broad-Based Black Economic Empowerment Act, 2003 (Act No. 53 of 2003);
has the meaning as defined in the Financial Sector Regulation Act; and
has the meaning as defined in the Financial Sector Regulation Act.
| (2) | In this Act, unless the context indicates otherwise, a word or expression derived from, or that is another grammatical form of, a word or expression defined in this Act has a corresponding meaning. |