Insurance Act, 2017 (Act No. 18 of 2017)Chapter 9 : ResolutionPart 3 : Business Rescue56. Business rescue applications and resolutions |
| (1) | The Prudential Authority may make an application under section 131 of the Companies Act in respect of an insurer or a controlling company, if the Prudential Authority reasonably believes that it is in the interests of the insurer’s policyholders or, in the case of a controlling company, the interests of policyholders of the insurers that are part of the insurance group to do so. |
| (2) |
| (a) | If an application to a court for an order relating to the business rescue of an insurer or a controlling company is made by an affected person other than the Prudential Authority— |
| (i) | it shall not be heard unless copies of the notice of motion and of all accompanying affidavits and other documents filed in support of the application have been lodged with the Prudential Authority at least 14 days before the application is set down for hearing; |
| (ii) | the Prudential Authority may, if the Prudential Authority reasonably believes that the application is not in the interests of policyholders of the insurer, or, in the case of a controlling company, the interests of policyholders of the insurers that are part of the insurance group, join the application as a party and file affidavits and other documents in opposition to the application. |
| (b) | The court may only grant an order relating to the business rescue of an insurer or a controlling company if the Prudential Authority has been notified of the application as required in paragraph (a)(i). |
| (3) |
| (a) | Any resolution of an insurer or a controlling company to begin business rescue proceedings is subject to the approval of the Prudential Authority. |
| (b) | An insurer or a controlling company may file a resolution under section 129 of the Companies Act only after the Prudential Authority has approved the resolution. |
| (c) | The Prudential Authority must grant or refuse an application for approval of a resolution within 14 days of the date on which the application was submitted to the Prudential Authority, or such longer period agreed between the Prudential Authority and the applicant. |
| (d) | If the Prudential Authority requested additional information in terms of section 60(4)(a)(i), then the period between the date on which the additional information was requested and when the information was provided to the Prudential Authority is not considered when determining the 14 days referred to in paragraph (c). |
| (e) | Any resolution of an insurer or a controlling company that is not approved by the Prudential Authority under paragraphs (a) or (b), is void. |
| (4) | Despite the provisions of the Companies Act, the following acts are subject to the approval of the Prudential Authority: |
| (a) | The appointment of a business rescue practitioner; and |
| (b) | the adoption of a business rescue plan. |
| (5) | Despite the provisions of the Companies Act, if the Prudential Authority does not approve a resolution referred to in subsection (3)(a) or (b), or the appointment or plan referred to in subsection (4)(a) or (b), the Prudential Authority must apply to court— |
| (a) | for the winding-up of the insurer or controlling company under section 58; or |
| (b) | to place the insurer or controlling company under curatorship in terms of section 54. |
| (6) | As from the date on which a business rescue practitioner is appointed, the business rescue practitioner of an insurer may not enter into any new insurance policies with policyholders or insurance policies with new policyholders, unless the practitioner has been granted prior approval to do so by the Prudential Authority. |