Insurance Act, 2017 (Act No. 18 of 2017)Chapter 4 : Licensing, Suspension and Withdrawal of Licence25. Licence conditions |
| (1) | An insurer, other than a microinsurer or a reinsurer, must be licensed to conduct life or non-life insurance business, and may not be licensed to conduct both. |
| (2) | An insurer, in addition to being licensed to conduct life or non-life insurance business, must be licensed to conduct one or more of the classes or sub-classes of insurance business set out in Schedule 2. |
| (3) | An insurer that is licensed to conduct a specific class or sub-class of insurance business may provide the rider benefits as may be prescribed in respect of that class or sub-class of insurance business. |
| (4) | An insurer licensed under this Act— |
| (a) | may only conduct insurance business in the classes or sub-classes of insurance business set out in Schedule 2 for which it is licensed in accordance with subsection (2); and |
| (b) | must conduct the insurance business for which the insurer is licensed in accordance with the requirements that may be prescribed in respect of each of the classes or sub-classes of insurance business under this Act or any other Act of Parliament. |
| (5) | A captive insurer may not insure third party risks. |
| (6) |
| (a) | Only a cell captive insurer may conduct insurance business through cell structures. |
| (b) | A cell captive insurer may not insure— |
| (i) | first party risks and third party risks in the same cell structure; or |
| (ii) | the risks associated with the insurance obligations of another insurer without the approval the Prudential Authority. |
| (7) |
| (a) | A reinsurer that is licensed to conduct both life and non-life insurance business may not be licensed to conduct reinsurance business in respect of classes 6 to 8 set out in Table 1 of Schedule 2. |
| (b) | A reinsurer licensed to conduct life or non-life insurance business or both may be licensed to conduct insurance business in respect of class 10 set out in Table 2 of Schedule 2 directly with a medical scheme registered under the Medical Schemes Act, 1998 (Act No. 131 of 1998). |
| (8) | The Prudential Authority, in the case of an insurer, may impose licensing conditions in addition to subsections (1) to (7) necessary to achieve the objective of this Act, which may include conditions— |
| (a) | relating to the insurance business arrangements, including, but not limited to, the outsourcing arrangements or cell structures that the insurer may enter into; |
| (b) | relating to the persons with whom the insurer may conduct insurance business; |
| (c) | relating to reinsurance arrangements; |
| (d) | limiting the scope and size of the insurance business that may be conducted to that set out in the application for a licence referred to in section 23; |
| (e) | prohibiting particular terms or conditions from being included in insurance policies entered into under a specific class or sub-class of business; |
| (f) | limiting the amount or value of the benefits that may be provided under insurance policies entered into under a specific class or sub-class of business; |
| (g) | limiting the amount of the premiums that the insurer may contract to receive, during a specific period, in respect of all or specific insurance policies entered into by the insurer during that period; |
| (h) | requiring that the provisions of the Memorandum of Incorporation of an insurer that is a company or the equivalent constitution, deed or founding instrument of an insurer that is not a company— |
| (i) | must be suitable to enable it to carry on insurance business; and |
| (ii) | may not be amended without the approval of the Prudential Authority; or |
| (i) | that are reasonably necessary to ensure that the insurance business is conducted in a financially sound manner or in accordance with this Act. |
| (9) | The Prudential Authority may, in the case of a controlling company, impose licensing conditions necessary to achieve the objective of this Act, which may include conditions— |
| (a) | requiring the controlling company of the insurance group to limit its business to the acquiring, holding and managing of another company or companies; |
| (b) | requiring that the provisions of the Memorandum of Incorporation of a controlling company that is a company or the equivalent constitution, deed or founding instrument of a controlling company that is not a company— |
| (i) | must be suitable to enable it to be the controlling company of an insurance group; and |
| (ii) | may not be amended without the approval of the Prudential Authority; or |
| (c) | that are reasonably necessary to ensure that the insurance business is conducted in a financially sound manner or in accordance with this Act. |
| (10) | The Prudential Authority may— |
| (a) | impose different conditions in respect of different types or kinds of insurers or controlling companies, and different classes and sub-classes of insurance business; and |
| (b) | impose conditions in a manner that seeks to facilitate the progressive or incremental compliance with this Act by a specific insurer to promote developmental, financial inclusion and transformation objectives. |