Short-Term Insurance Act, 1998 (Act No. 53 of 1998)Prescribed requirements for the calculation of the value of the assets, liabilities and capital adequacy requirement of short-term insurers5. Calculation of the capital adequacy requirement |
| 5.1 | The capital adequacy requirement referred to in section 29 of the Act shall be determined as described in paragraph 5.2 below. |
| 5.2 | Calculation of the capital adequacy requirement – |
| 5.2.1 | The capital adequacy requirement referred to in section 29(1) shall be an amount equal to the greater of the following amounts: |
A - R5 000 000 or such smaller amount as the Authority may, in a particular case and for a determined period, approve; or
B - 15 per cent of the greater of the amount of the premium Income of the insurer after deduction of all premiums payable by it in terms of any reinsurance policies entered into by it in respect of any policies -
| i) | during the period of 12 months immediately preceding the day on which the previous financial year ended; or |
| ii) | during the period of 12 months immediately preceding the day on which the calculation is made; |
| 5.2.2 | The capital adequacy requirement referred to in section 29(2) shall be an amount equal to the greater of the following amounts: |
A - R5 000 000 or such smaller amount as the Authority may, in a particular case and for a determined period, approve; or
B - 15 percent of the greater of the amount of the premium income of the insurer in respect of the insurance business carried on by it in the Republic after deduction of all premiums payable by it in terms of any reinsurance policies entered into by it in respect of any policies -
| i) | during the period of 12 months immediately preceding the day on which the previous financial year ended; or |
| ii) | during the period of 12 months immediately preceding the day on which the calculation is made. |