| 1) | A long-term insurer may, in terms of a written agreement only, and in accordance with any requirements, limitations or prohibitions that may be prescribed by regulation, allow another person to do any one or more of the following on behalf of that insurer: |
| b) | determine the wording of a long-term policy; |
| c) | determine premiums under a long-term policy; |
| d) | determine the value of policy benefits under a long-term policy; |
| e) | settle claims under a long-term policy. |
[Section 49A(1) substituted by section 12(a) of schedule 1 of Act No. 18 of 2017]
| 1A) | Subsection (1) shall not apply in the case of a long-term unless and to the extent that the Authority so determines by notice in the Gazette. |
[Section 49A (1A) inserted by section 12(b) of schedule 1 of Act No. 18 of 2017]
| 2) | A written agreement referred to in subsection (1) must— |
| a) | set out which of the activities referred to in subsection (1) that other person may perform and the particular kinds of long-term policies in respect of which those activities may be performed; |
| b) | set out the particular kinds of long-term policies which may be entered into, varied or renewed by that other person; |
| c) | state if that other person is authorised to determine the wording of the policies referred to in paragraph (a), and if authorised, the extent to which and the circumstances under which the wording may be determined; |
| d) | state if that other person is authorised to determine premiums in respect of the policies referred to in paragraph (a), and if authorised, the gross premiums or the basis for the calculation of gross premiums that may be determined, and the extent to which and the circumstances under which the premiums may be determined; |
| e) | state if that other person is authorised to determine the value of policy benefits, and if authorised, the maximum value of the policy benefits that may be determined under each kind of long-term policy referred to in paragraph (a), and the extent to which and the circumstances under which the benefits may be determined; |
| f) | state if that other person is authorised to settle claims under the policies referred to in paragraph (a), and if authorised, the extent to which and the circumstances under which the claims may be settled; |
| g) | state the basis on which that other person will be remunerated for services rendered in terms of paragraphs (b) to (f), which basis must be consistent with any requirements, limitations or prohibitions as may be prescribed by regulation; |
| h) | oblige that other person to— |
| i) | disclose to policyholders of policies referred to in paragraph (a)— |
| aa) | the name of the relevant long-term insurer, and the fact that that other person is acting in terms of an agreement contemplated in this section; and |
| bb) | any remuneration payable to that other person in terms of an agreement contemplated in this section; |
| ii) | include the name of the long-term insurer underwriting the long-term policy in any advertisement, brochure or similar communication which relates to the long-term policy referred to in paragraph (a); |
| iii) | keep and maintain proper books of account and other records in respect of the policies referred to in paragraph (a) and allow the long-term insurer, its statutory actuary and its auditors full and unfettered access to those books of account and records; and |
| iv) | make available to the long-term insurer, its statutory actuary and its auditors the policies referred to in paragraph (a) and any information relating thereto, including the names, identity numbers and contact details of policyholders, insured persons and beneficiaries, upon request; |
| i) | prohibit that other person to delegate, assign or subcontract any of the functions referred to in paragraphs (b) to (f) to another person; and |
| j) | state the circumstances under which the agreement will lapse or may be terminated, and the necessary steps that must be taken to ensure the effective and efficient termination of the agreement taking into account the interests of policyholders. |
| 3) | A written agreement referred to in subsection (1), subject to any requirements, limitations or prohibitions as may be prescribed by regulation— |
| a) | may not authorise that other person to add an amount to any gross premium referred to in subsection (2)(d); |
| b) | may not authorise that other person to deduct any amount from any claims referred to in subsection (2)(f); or |
| c) | may provide or prohibit that person to directly or indirectly participate in the profits attributable to the policies referred to in subsection 2(a). |
| 4) | A person that entered into an agreement contemplated in subsection (1) with a long-term insurer may— |
| a) | render the services contemplated in subsection (1)(a) to (e) in respect of any kind of long-term policy issued by that long-term insurer identified in the agreement only in accordance with any requirements, limitations or prohibitions as may be prescribed by regulation; and |
| b) | not render any of the services contemplated in subsection (1)(a) to (e) in respect of any kind of long-term policy issued by that long-term insurer not identified in the agreement. |
| 5) | Despite any term to the contrary contained in an agreement contemplated in subsection (1) the long-term insurer that entered into the agreement remains— |
| a) | responsible for compliance with this Act; |
| b) | liable for any claims relating to policies included in the agreement, including any claims that may arise because of the failure of that other person to comply with the agreement; and |
| c) | the owner of any information and documentation relating to the policies contemplated in the agreement, which must, upon termination of the agreement, be returned to the long-term insurer. |
| 6) | Any party to a written agreement referred to in subsection (1) must make a copy of that agreement available to the Authority on request. |
