Insurance Act, 2017 (Act No. 18 of 2017)Chapter 2 : Conducting Insurance Business and Insurance Group BusinessPart 2 : Insurance business and other business of insurers5. Insurance business and limitations on other business |
| (1) | No person may conduct insurance business in the Republic unless that person is licensed under this Act. |
| (2) | A person is regarded as conducting insurance business in the Republic if— |
| (a) | the person conducts business similar to insurance business outside the Republic; and |
| (b) | that person or another person, in relation to the business referred to under paragraph (a), directly or indirectly acts in the Republic on behalf of the first-mentioned person, including, but not limited to, by rendering a financial service within the meaning of the Financial Advisory and Intermediary Services Act, 2002 (Act No. 37 of 2002), in respect of that business. |
| (3) | A person to whom an insurer has outsourced a function or activity is not regarded as conducting insurance business. |
| (4) | An insurer may not, without the approval of the Prudential Authority, conduct any business other than insurance business in the Republic, including any insurance business performed on behalf of another person. |
| (5) | An insurer (other than a reinsurer, a branch of a foreign reinsurer, Lloyd’s underwriter or Lloyd’s) may not, without the approval of the Prudential Authority, conduct any business, including business similar to insurance business, outside the Republic. |
| (6) | The Prudential Authority must only grant an approval referred to under subsection (4) or (5) if the Prudential Authority is satisfied that such business will not— |
| (a) | impede or be likely to impede the financial soundness of the insurer; |
| (b) | negatively impact on the interests of policyholders; or |
| (c) | introduce risks that cannot, to the satisfaction of the Prudential Authority, be appropriately mitigated. |
| (7) |
| (a) | Despite any approval under subsection (4) or (5), the Prudential Authority may direct an insurer to cease conducting business referred to in subsection (4) or (5), if the Prudential Authority reasonably believes that the business may— |
| (i) | impede or is likely to impede the financial soundness of the insurer; or |
| (ii) | introduce a risk or risks that cannot be appropriately mitigated. |
| (b) | An insurer who is directed under paragraph (a) must, within the period agreed with the Prudential Authority, which period must not exceed three months after a directive referred to in paragraph (a) is issued, submit to the Prudential Authority for approval a plan to reorganise its business. |
| (c) | An insurer whose plan was approved under paragraph (b) must submit a monthly progress report to the Prudential Authority that sets out the measures taken and the progress made with implementing the plan. |
| (d) | The Prudential Authority may restrict or prohibit certain activities or transactions of the insurer until the plan is implemented. |
| (8) |
| (a) | The Prudential Authority may prescribe that, for the purposes of this Act— |
| (i) | certain types, kinds or categories of insurance business are, subject to any requirements prescribed, excluded from the application of this Act; or |
| (ii) | certain types, kinds or categories of business constitute insurance business to which this Act applies. |
| (b) | The Prudential Authority, when making a Prudential Standard under paragraph (a), must have regard to— |
| (i) | any existing Act of Parliament that regulates that business; |
| (ii) | the nature, size, complexity or type of that business; |
| (iii) | the persons that conduct that business; |
| (iv) | the nature or type of any insurance obligations; |
| (v) | the threshold below which it is not possible for a person to effectively retain and manage insurance risk. |
| (9) | No person may, without the approval of the Prudential Authority, apply to that person’s business or undertaking a name or description which includes the word "assure", "insure" or "underwrite", or any derivative thereof, unless that person is licensed as an insurer under this Act. |