Insurance Act, 2017 (Act No. 18 of 2017)Chapter 5 : GovernancePart 1 : Insurers and insurance groups31. Failure to maintain governance framework |
| (1) | An insurer or a controlling company must have procedures in place to identify any non-compliance with section 30, and in the case of a branch of a foreign reinsurer and Lloyd’s, also with Part 2 of this Chapter and Part 2 of Chapter 6. |
| (2) |
| (a) | An insurer or a controlling company that fails to comply with section 30 must, without delay— |
| (i) | notify the Prudential Authority of the failure and the reasons for the failure; |
| (ii) | within 30 days after the notification referred to in subparagraph (i), submit a compliance scheme to the Prudential Authority for approval that sets out the measures that the insurer or controlling company will implement within a four month period to remedy any non-compliance. |
| (b) | The Prudential Authority may, if appropriate, extend the four-month period referred to in paragraph (a)(ii) by two months and, in exceptional circumstances, extend that period by an appropriate period of time, taking into account all relevant factors. |
| (3) | An insurer or a controlling company whose compliance scheme was approved as contemplated in subsection (2) must submit a monthly progress report to the Prudential Authority that sets out the measures taken and the progress made with implementing the compliance scheme. |
| (4) | The Prudential Authority may, until a compliance scheme is implemented— |
| (a) | restrict or prohibit certain activities or transactions of the insurer or insurance group; or |
| (b) | in the case of an insurer (other than a branch of a foreign reinsurer, a Lloyd’s underwriter or Lloyd’s) and a controlling company, impose conditions or limitations on the insurer, controlling company, or board of directors of the insurer or controlling company; |
| (c) | in the case of a branch of a foreign reinsurer, impose conditions or limitations on the branch or the representative of the branch; or |
| (d) | in respect of Lloyd’s, impose conditions or limitations on Lloyd’s underwriters, Lloyd’s or the representative of Lloyd’s. |
| (5) | The Prudential Authority may— |
| (a) | in the case of an insurer (other than a branch of a foreign reinsurer, a Lloyd’s underwriter or Lloyd’s) and a controlling company, require the board of directors or senior management, or both, of the insurer or controlling company to demonstrate that the governance framework requirements provided for in this Part and any other prescribed requirements are being complied with; or |
| (b) | in the case of a branch of a foreign reinsurer or Lloyd’s, require the representative of a branch of a foreign reinsurer or Lloyd’s to demonstrate that the governance framework requirements provided for in this Part and any other prescribed requirements are being complied with. |
| (6) | If the Prudential Authority reasonably believes that the effectiveness of the governance framework of an insurer or controlling company or a part thereof requires further investigation, the Prudential Authority may direct the insurer or controlling company to secure an independent review of the governance framework by a person to be approved by the Prudential Authority at the cost of the insurer or controlling company. |
| (7) | The Prudential Authority may— |
| (a) | in the case of an insurer (other than a branch of a foreign reinsurer, a Lloyd’s underwriter or Lloyd’s) and a controlling company, direct an insurer, a controlling company, or the board of directors or other key persons of the insurer or controlling company, to strengthen or effect improvements to the insurer or controlling company’s governance framework or a part thereof; |
| (b) | in the case of a branch of a foreign reinsurer or Lloyd’s, direct a branch of a foreign reinsurer, Lloyd’s or the representative or other key person of a branch of a foreign reinsurer or Lloyd’s, to strengthen or effect improvements to the governance framework or a part thereof of the branch of a foreign reinsurer or Lloyd’s. |
| (8) | This section does not limit any other action that the Prudential Authority may take in terms of this Act. |