Insurance Laws Amendment Act

1. Section 1 of the L o n g - t e rm Insurance Act, 1998, is h e r e by a m e n d e d— (a) by the insertion after the definition of " a s s i s t a n ce p o l i c y" of the following definition: " ' A u d i t i ng Profession A c t' m e a ns the A u d i t i ng Profession Act, 2 0 05 (Act N o. 26 of 2 0 0 5 ) ; "; (b) by the substitution for the definition of " a u d i t o r" of the following definition: " ' a u d i t o r' m e a ns an auditor [Public A c c o u n t a n t s' a nd A u d i t o r s' Act, 1991 (Act N o. 80 of 1991),] A u d i t i ng Profession Act and appointed in terms of section 19(1) or 21(1 )(a) of this A c t ; ": registered t e r ms of the in (c) the substitution by definition: for the definition of "fair v a l u e" of the following " 'fair v a l u e' has the m e a n i ng assigned s t a n d a r d s ; "; to it in financial reporting (d) by the definitions: insertion after the definition of "fair v a l u e" of the following " 'financial r e p o r t i ng s t a n d a r d s' has the m e a n i ng assigned section 1 (1) of the C o m p a n i es Act; 'financial s t a t e m e n t s' has the m e a n i ng assigned to it in section 1(1) of the C o m p a n i es A c t ; "; to it in (e) by the substitution for the definition of " f u n d" of the following definition: " ' f u n d' m e a n s— (a) a friendly society as defined in section 1 of the Friendly Societies Act. 1956 (Act N o. 25 of 1956); a pension fund organization as defined in section 1 of the P e n s i on F u n ds Act, 1956 (Act N o. 24 of 1956); a medical s c h e me as defined in section 1 of the Medical S c h e m es Act[, 1967 (Act N o. 72 of 1967)]; and (b) (c) [(d) a p e r m a n e nt f u n d, e s t a b l i s h ed bona for the p u r p o se of p r o v i d i ng benefits to m e m b e rs in t he e v e nt of s i c k n e s s, a c c i d e nt or u n e m p l o y m e n t, or of p r o v i d i ng benefits to s u r v i v i ng s p o u s e s, c h i l d r e n, d e p e n d a n ts or n o m i n e es of d e c e a s ed m e m b e r s, or m a i n ly for those p u r p o s e s; a nd fide (e)] (d) any other person, a r r a n g e m e nt or business prescribed by t he R e g i s t r a r ; "; (f) by the substitution for the definition of " h e a l th p o l i c y" of the following definition: " 'health policy' m e a ns a contract in terms of w h i ch a p e r s o n, in return for a p r e m i u m, undertakes to provide policy benefits upon a health event, [but e x c l u d i ng a ny c o n t r a c t— (a) of w h i ch t he c o n t e m p l a t ed policy b e n e f i t s— (i) are s o m e t h i ng other t h an a s t a t ed s um of m o n e y; (ii) are to be p r o v i d ed u p on a p e r s on h a v i ng i n c u r r e d, a nd to s e r v i ce defray, e x p e n d i t u re o b t a i n ed as a result of the h e a l th e v e nt c o n c e r n e d; and (iii) are to be p r o v i d ed to a ny p r o v i d er of a health s e r v i ce in in respect of a ny h e a l th return for t he p r o v i s i on of s u ch s e r v i c e; or (b) (i) of w h i ch the p o l i c y - h o l d er is a m e d i c al s c h e me registered u n d er the M e d i c al S c h e m es A c t, 1967 ( A ct N o. 72 of 1 9 6 7 ); (ii) w h i ch relates to a p a r t i c u l ar m e m b er of t he s c h e me or to the beneficiaries of s u ch m e m b e r; a nd (iii) w h i ch is entered into by the s c h e me to f u nd in w h o le or in part its liability to s u ch m e m b er or beneficiaries in t e r ms of its rules; a nd includes a r e - i n s u r a n ce policy in respect of s u ch a c o n t r a c t ;] and includes a reinsurance policy in respect of such a c o n t r a c t— Act No. 27, 2008 INSURANCE LAWS AMENDMENT ACT, 2008 (a) e x c l u d i ng any c o n t r a c t— (i) that provides for the c o n d u c t i ng of the business of a medical s c h e me referred to in section 1(1) of the M e d i c al S c h e m es Act; or (ii) of which the policyholder is a medical s c h e me registered under (bb) the M e d i c al S c h e m es Act, and w h i ch c o n t r a c t— (aa) relates to a particular m e m b er of the s c h e me or to the beneficiaries of that m e m b e r; and is entered into by the medical s c h e me to fund in w h o le or in part its liability to the m e m b er or the beneficiaries of the m e m b er referred to in s u b p a r a g r a ph (aa) in t e r ms of its rules; but (b) including, notwithstanding specifically any contracts identified by the Minister by regulation u n d er section 7 2 ( 2 A) as a health p o l i c y ; "; paragraph (a)(i), by the deletion of the definition of " m a r k e t - r e l a t ed policy"; by following definition: the definition of insertion after the ' m a r k e t - r e l a t ed p o l i c y' of the " ' M e d i c al S c h e m es A c t' m e a ns the M e d i c al S c h e m es Act, 1998 (Act N o. 131 of 1 9 9 8 ) ; "; for the definition of " M i n i s t e r" of the substitution following the by definition: (g) (h) (i) " ' M i n i s t e r' m e a ns the [Minister of F i n a n ce or a ny o t h er M i n i s t er to w h om the a d m i n i s t r a t i on of this A ct m ay be a s s i g n ed f r om t i me to t i m e] C a b i n et m e m b er responsible for finance: (j) by the substitution for the definition of " p u b l ic c o m p a n y" of the following definition: " 'public c o m p a n y' m e a ns a c o m p a ny with a share capital w h i ch is a public c o m p a ny under section 19 of the C o m p a n i es Act;'"; (k) the substitution by definition: for the definition of " R e g i s t r a r" of the following " ' R e g i s t r a r' m e a ns the Registrar or the D e p u ty Registrar of L o n g - t e rm Insurance referred to in section [2(1)] 2 : "; and (l) by the definition: insertion after the definition of " s u b s i d i a r y" of the following " 'this A c t' includes any regulation m a d e, or matter prescribed u n d er this A c t ; ". (m) by the insertion after the definition of ' u n b o r n' of the following definition: " ' w i d e l y - h e ld c o m p a n y' has the m e a n i ng assigned to it in section 1(6) of the C o m p a n i es A c t . ". Substitution of section 2 of A ct 52 of 1998

2. T he following section is hereby substituted for section 2 of the L o n g - t e rm I n s u r a n ce Act, 1998: " R e g i s t r ar of L o n g - t e rm I n s u r a n ce

2. T he executive officer and a deputy executive officer m e n t i o n ed in section 1 of the Financial Services Board Act, shall be the Registrar and the D e p u ty Registrar of L o n g - t e rm Insurance, r e s p e c t i v e l y . ". Act No. 27, 2008 INSURANCE LAWS AMENDMENT ACT, 2008 A m e n d m e nt of section 4 of A ct 52 of 1 9 9 8, as a m e n d ed by s e c t i on 3 of A ct 17 of 2 0 03

3. Section 4 of the L o n g - t e rm Insurance Act, 1998, is hereby a m e n d ed by the substitution for subsection (4) of the following subsection: " ( 4) (a) T he Registrar may, in order to ensure c o m p l i a n ce with or to prevent a contravention of this Act, issue a directive to any person or p e r s o ns to w h om the provisions of this Act apply. (b) A directive issued in terms of p a r a g r a ph (a) m a y— (i) (ii) apply generally; or be limited in its application to a particular person or kinds of p e r s o n s, which may, for purposes of this subsection, be defined either to categories, types or in any other manner. in terms of p a r a g r a ph (c) A directive takes effect on in relation the date (a) issued d e t e r m i n ed by the Registrar in the directive. the (d) In the event of a departure from section 3(2) or 4(1), (2) or (3) of P r o m o t i on of Administrative Justice Act, 2 0 00 (Act N o. 3 of 2 0 0 0 ), the directive must include a statement to that effect and the reasons for such departure. (e) T he Registrar m ay a m e nd or r e v o ke any issued directives. (f) T he Registrar may, where a directive is issued to ensure the protection of the public in general, publish the directive in the Gazette and any other m e d ia that the Registrar d e e ms a p p r o p r i a t e . ". A m e n d m e nt of section 7 of A ct 52 of 1998

4. Section 7 of the L o n g - t e rm Insurance Act, 1998, is h e r e by a m e n d e d— (2) for p a r a g r a ph (d) of the in subsection (a) by the substitution paragraph: following "(d) a medical s c h e me registered under the Medical S c h e m es Act, [1967 (Act N o. 72 of 1967),] if and in so far as it acts in a c c o r d a n ce with that A c t ; "; and (b) by the substitution paragraph: in subsection (2) for p a r a g r a ph (g) of the following "(g) an agricultural co-operative [or special f a r m e r s' c o - o p e r a t i ve f o r m ed and i n c o r p o r a t e d] registered under the C o - o p e r a t i v es Act, [1981 (Act N o. 91 of 1981)] 2 0 05 (Act N o. 14 of 2 0 0 5 ), or allowed to continue to operate in t e r ms of section 97 of that Act, if and in so far as it [provides u n d er a s c h e me or a r r a n g e m e nt in t e r ms of its statutes,] conducts long-term insurance b u s i n e ss as part of its main objectives, and p r o v i d es benefits, is not guaranteed and in respect of which its liability is limited to the a m o u nt standing to the credit of a fund specially m a i n t a i n ed for that p u r p o s e . ". the a m o u nt of w h i ch A m e n d m e nt of section 10 of A ct 52 of 1998, as a m e n d ed by s e c t i on 5 of A ct 17 of 2 0 03

5. Section 10 of the L o n g - t e rm I n s u r a n ce Act, 1998, is hereby a m e n d ed by the substitution for paragraph (h) of the following p a r a g r a p h: "(h) reasonably necessary to ensure insurance business that concerned is carried on soundly [ a nd in a m a n n er w h e r e by t he l o n g - t e rm insurer will h a ve assets w i th a fair v a l ue of n ot less t h an its liabilities a nd capital a d e q u a cy r e q u i r e m e n t] in c o m p l i a n ce with section 2 9 ( 1 ) , ". long-term the Act No. 27, 2008 INSURANCE LAWS AMENDMENT ACT, 2008 A m e n d m e nt of s e c t i on 19 of A ct 52 of 1998

6. Section 19 of the L o n g - t e rm Insurance Act, 1998, is hereby a m e n d e d— by the substitution for subsection (1) of the following subsection: (a) " ( 1) A long-term insurer shall [from t i me to t i me a p p o i n t, a n d] at all times have[,] one or m o re auditors appointed by it in a c c o r d a n ce with the provisions of the C o m p a n i es A ct applicable to a widely-held c o m p a n y . "; (b) (c) by the deletion of subsection (3); by the substitution for subsection (4) of the following subsection: " ( 4) If an auditor of a long-term insurer is a firm (as c o n t e m p l a t ed in the [Public A c c o u n t a n t s' a nd A u d i t o r s' A c t, 1991 ( A ct N o. 80 of 1991)] Auditing Profession Act), the R e g i s t r a r 's last approval of the a p p o i n t m e nt [thereof] of that firm as auditor shall not lapse by reason of a c h a n ge in the m e m b e r s h ip of the firm if at least half of the m e m b e r s, after the c h a n g e, were m e m b e rs of the firm w h en the a p p o i n t m e nt of the firm w as last approved by the R e g i s t r a r . "; (d) by the substitution for subsection (5) of the following subsection: " ( 5) N o t w i t h s t a n d i ng anything to the contrary in any law contained, the auditor of a long-term insurer s h a l l— (a) w h e n e v er the auditor furnishes copies of a report or other d o c u m e nt or particulars contemplated in section [20(5)(b)] 4 5 ( l ) ( a) and (3)fc) of the [Public A c c o u n t a n t s' a nd A u d i t o r s' A c t, 1 9 9 1] A u d i t i ng Profession Act, also furnish a copy thereof to the Registrar; and if the a u d i t o r 's a p p o i n t m e nt is terminated for any r e a s o n— (b) (i) submit to the Registrar a statement of w h at the auditor believes to be the reasons for that termination; and (ii) if the auditor w o u l d, but for that termination, h a ve had reason to submit [to the l o n g - t e rm insurer] a report c o n t e m p l a t ed in section [20(5)(a)] 4 5 ( l ) ( a) and (3)(c) of the [Public A c c o u n­ t a n t s' a nd A u d i t o r s' A c t, 1991] A u d i t i ng Profession Act, submit such a report to the Registrar: and (c) insurer of which inform the Registrar and the board of directors of the long-term the insurer, without delay, in writing of any matter relating to the auditor [affairs] business of the long-term [ b e c a m e] b e c o m es aware the a u d i t o r 's functions as auditor and which, in the opinion of the auditor, constitutes a contravention of section 29(1) or any other section of this Act or in future m ay prejudice the i n s u r e r 's ability to c o m p ly with section 29(1) or any other section of this Act, which information must give a description of the matter and must include such other particulars as the auditor c o n s i d e rs a p p r o p r i a t e . ": and the p e r f o r m a n ce of in (e) by the substitution for subsection (7) of the following subsection: " ( 7) [In a d d i t i on to] T he auditor of a long-term insurer m u st carry out the duties assigned to the auditor of a long-term insurer by [the] this Act, the Act under which that insurer is incorporated and [ u n d er w h i ch that i n s u r er is i n c o r p o r a t ed or b y] the [Public A c c o u n t a n t s' a nd A u d i t o r s' Act, 1 9 9 1, the A u d i t or shall] A u d i t i ng Profession Act, and in addition to those duties m u s t— (a) in relation to a statement forming part of the returns in respect of which the auditor is required to [do so] submit in t e r ms of section that statement or part thereof and satisfy himself, 36, e x a m i ne herself or itself that it is properly [ d r a wn u p] p r e p a r ed so as to c o m p ly with the requirements of this Act and e x p r e ss an opinion as to whether the statement or part thereof, including any a n n e x u re thereto, has in all material respects been prepared in a c c o r d a n ce with [section 20] Chapter IV of the [Public A c c o u n t a n t s' a nd A u d i t o r s' A c t, 1991] Auditing Profession Act; and (b) carry out the other duties [provided in this A ct or] p r e s c r i b ed by the M i n i s t e r . ". Act No. 27, 2008 INSURANCE LAWS AMENDMENT ACT, 2008 A m e n d m e nt of section 20 of A ct 52 of 1 9 98

7. Section 20 of the L o n g - t e rm Insurance Act, 1998, is hereby a m e n d e d— (a) by the substitution paragraph: in subsection (5) for p a r a g r a ph (b) of the following "(b) (i) without delay, report in writing to the board of directors of the long-term insurer any matter relating to the business of the long-term insurer of which he or she b e c o m es a w a re in the p e r f o r m a n ce of his or her functions as statutory actuary and which, in his or her opinion, constitutes a c o n t r a v e n t i on of section 29(1) or any other section of this A ct relating to the duties of the statutory actuary, or in future m ay prejudice the long-term i n s u r e r 's ability to c o m p ly with section 2 9 ( 1) or any other section of this Act relating to the duties of the statutory actuary, which report must give a description of the matter and m u st include such other particulars as the statutory actuary considers appropriate: P r o v i d ed report m u st be submitted without delay also to the Registrar w h e r e, in the opinion of the statutory actuary, the m a t t e r— (aa) materially prejudices the i n s u r e r 's ability to c o m p ly with that the any of these sections; (bb) d o es not materially prejudice to c o m p ly with these sections, but the statutory actuary is of the opinion that immediate remedial action m u st be taken by the long-term insurer; and i n s u r e r 's ability the (ii) if steps to rectify the matter are not taken by the b o a rd of directors of the long-term insurer to the satisfaction of the statutory actuary [, he or she shall f o r t h w i th r e p o rt the m a t t er to] within 30 days after the date of the report, w i t h o ut delay inform the Registrar."; (b) by the substitution paragraph: in subsection (8) for p a r a g r a ph (b) of the following "(b) be entitled t o— (i) attend and speak at a general meeting of the long-term insurer; and (ii) receive the notices and other c o m m u n i c a t i o ns relating to a general m e e t i ng which a m e m b er of that long-term insurer is entitled to receive;[and (iii) be h e a rd at a general m e e t i ng on the b u s i n e ss of t he m e e t i ng w h i ch c o n c e r ns h im or h er as s t a t u t o ry a c t u a r y . ] "; and (c) by the addition to subsection (8) of the following paragraph: "(c) (i) attend and be entitled to speak at any m e e t i ng of the board of directors of the long-term insurer on the b u s i n e ss of the meeting which concerns the duties conferred on or assigned to h im or her as statutory actuary by or under this Act and by any other l aw or c o de of professional practice; and (ii) receive the notices and other c o m m u n i c a t i o ns relating to any meeting referred to in s u b p a r a g r a ph (i) w h i ch a m e m b er of the board of directors is entitled to r e c e i v e . ". A m e n d m e nt of section 23 of A ct 52 of 1998

8. Section 23 of the L o n g - t e rm Insurance Act, 1998, is hereby a m e n d e d— by the substitution for subsection (1) of the following subsection: (a) " ( 1) T he board of directors of a long-term insurer shall appoint an audit c o m m i t t ee of at least three m e m b e rs of w h om at least t wo shall be [ m e m b e rs of that b o a r d] independent n o n - e x e c u t i ve directors within the m e a n i ng of section 2 6 9 A ( 4 ) ( b) and (c) of the C o m p a n i es A c t . "; Act No. 27, 2008 INSURANCE LAWS AMENDMENT ACT, 2008 (b) by the substitution in subsection (3) for the words p r e c e d i ng p a r a g r a ph (a) of the following w o r ds : " ( 3) T he functions of [an] the audit c o m m i t t ee [shall, i n t er alia, b e ], the in section 2 7 0 A ( 1) of the functions referred to to in addition C o m p a n i es Act, a r e — "; (c) by the insertion after subsection (3) of the following subsection: " ( 3 A) T he audit c o m m i t t ee m ay appoint an advisor or request any the e m p l o y ee of performance of the functions referred to in subsection ( 3 ) . "; and to advise or assist long-term insurer the in it (d) by the substitution for subsection (4) of the following subsection: " ( 4) If the appointment or c o m p o s i t i on of an audit c o m m i t t ee is, in a particular c a s e, inappropriate or impractical or w o u ld serve no useful purpose, the Registrar may, subject to such c o n d i t i o ns as the Registrar may determine, e x e m pt the long-term r e q u i r e m e n ts of subsection ( 1 ) . ". insurer c o n c e r n ed from the A m e n d m e nt of section 24 of A ct 52 of 1 9 9 8, as a m e n d ed by section 8 of A ct 17 of 2 0 03

9. Section 24 of the L o n g - t e rm Insurance Act, 1998, is hereby a m e n d e d— (a) by the substitution for the w o r ds p r e c e d i ng p a r a g r a ph (a) of the following w o r d s: "[A] N o t w i t h s t a n d i ng the provisions of the C o m p a n i es Act, a long-term insurer shall n o t — "; (b) by the substitution in p a r a g r a ph (a) for subparagraph (ix) of the following s u b p a r a g r a p h: "(ix) allow its subsidiary to acquire directly or indirectly shares in it in terms of section 89 of the C o m p a n i es A c t [ : ] ; "; and (c) by the addition to paragraph (a) of the following s u b p a r a g r a p h: " ( x) c o n c l u de a transaction contemplated in section 3 8 ( 2 A) of the C o m p a n i es A c t : ". A m e n d m e nt of section 25 of A ct 52 of 1 9 98

10. Section 25 of the L o n g - t e rm Insurance Act, 1998, is hereby a m e n d e d— (a) by the substitution paragraph: in subsection (2) for p a r a g r a ph (a) of the following "(a) to or in the n a me of a trustee or custodian of a [unit trust] collective investment s c h e me as defined in section 1 of the [Unit Trusts C o n t r ol A c t, 1981 (Act N o. 54 of 1981)] Collective I n v e s t m e nt S c h e m es Control Act, 2 0 02 (Act N o. 45 of 2 0 0 2 ), or [of] a trustee or [ n o m i n a t ed c o m p a n y] custodian [ a p p r o v ed by the R e g i s t r a r] appointed in terms of section 68(6)(a) [Unit Trust C o m p a n i e s] Collective I n v e s t m e nt S c h e m es Control Act, 2 0 0 2 ; "; representative of [the] such the of (b) by the substitution in subsection (2) for p a r a g r a p hs (c) and (d) of the following paragraphs: "(c) for a period of not more than six m o n t h s, to or in the n a me of [a s t o c k b r o k e r] an authorised user or a [ c o m p a n y] n o m i n ee floated by [a s t o c k b r o k e r] an authorised user for the p u r p o s es c o n t e m­ plated in section [ 1 2 ( l ) ( s )] 18(2)(l), read with section 36(1)(a), of the [Stock E x c h a n g es C o n t r ol Act, 1 9 8 5] Securities Services Act, 2 0 04 (Act N o. 36 of 2 0 0 4 ), or to or in the n a me of a c o m p a ny controlled by a long-term insurer or an e m p l o y ee of the long-term insurer, if it is necessary that the shares be so allotted, issued or registered in order to facilitate delivery to the purchaser or to protect the rights of the beneficiary in respect of those shares; Act No. 27, 2008 INSURANCE LAWS AMENDMENT ACT, 2008 (d) to or in the n a me of a [person acting as a d e p o s i t a ry institution by virtue of an authorisation u n d e r] participant as defined in section [2] 1 of the [Safe D e p o s it of Securities A c t, 1 9 92 (Act N o. 85 of 1992)] Securities Services Act, 2 0 0 4, or of a [ c o m p a n y] n o m i n ee read with section c o n t e m p l a t ed 39(2)(q), of the [Stock E x c h a n g es C o n t r ol Act, 1985] Securities Services Act. 2004: Provided the [ p e r s o n] participant or that [ m e m b e r] n o m i n ee concerned is able, on request, to disclose the n a me of the beneficial shareholder on w h o se behalf shares are h e l d ; ". in section [ 1 2 ( l ) ( s ) ( i )] 36(1 )(b), A m e n d m e nt of section 29 of A ct 52 of 1998, as a m e n d ed by s e c t i on 10 of A ct 17 of 2 0 03

11. Section 29 of the L o n g - t e rm Insurance Act, 1998, is hereby a m e n d e d— (a) by the substitution for subsections (2) and (3) of the following subsections: " ( 2) A long-term insurer shall be d e e m ed to have failed to c o m p ly with subsection (1) if [it does not h a v e ]— (a) (b) (c) it does not have assets as required by section 30; [or] it does not have in the Republic assets as required by section 3 1: or it has not m a de provision for the liabilities and the capital a d e q u a cy requirement referred to in sections 30 and 31 in a c c o r d a n ce with the requirements of those sections and S c h e d u le 3. (3) A long-term insurer w h i ch fails to c o m p ly with subsection (1) shall, [within 30 d a ys after b e c o m i ng a w a re of it] without delay, notify the Registrar of the failure and furnish the reasons therefor."; and (b) by the addition of the following subsections: " ( 4) A long-term insurer shall not declare or pay a d i v i d e nd to its s h a r e h o l d e r s— (a) while it fails or is likely to fail to c o m p ly with subsection (1); (b) if the declaration or p a y m e nt would result in it failing or being likely to fail to comply with subsection (1); or if, after the declaration or p a y m e n t, the a g g r e g a te value of assets required by section 30 w o u ld be less than the a g g r e g a te value of its liabilities, issued share capital and non-distributable reserves. (c) (5) A long-term its shareholders unless its statutory actuary has certified that the declaration or p a y m e nt will not be contrary to subsection ( 4 ) . ". insurer shall not declare or pay a dividend to A m e n d m e nt of section 30 of A ct 52 of 1998, as a m e n d ed by s e c t i on 11 of A ct 17 of 2 0 03

12. Section 30 of the L o n g - t e rm Insurance Act, 1998. is hereby a m e n d ed by the deletion of subsections (2) and (3). A m e n d m e nt of section 31 of A ct 52 of 1998, as a m e n d ed by s e c t i on 12 of A ct 17 of 2 0 03

13. Section 31 of the L o n g - t e rm Insurance Act, 1998. is hereby a m e n d e d— (a) the substitution by paragraph: in subsection (1) for paragraph (a) of the following "(a) which have an aggregate value which, on any day, is not less than the aggregate value, on that day, of those of its liabilities which have to be met in the Republic, and [ m i n i m u m] its capital a d e q u a cy requirement, when the values of those assets are calculated by reference to their fair value and the values of those liabilities, other than the said linked liabilities, and [ m i n i m u m] capital a d e q u a cy requirement, are calculated as set out in Schedule 3; a n d "; Act No. 27, 2008 INSURANCE LAWS AMENDMENT ACT. 2008 (b) the substitution by paragraph: in subsection (1) for p a r a g r a ph (c) of t he following its "(c) w h i ch have a fair value which, w h en expressed as a p e r c e n t a ge of the aggregate value of [ m i n i m u m] capital a d e q u a cy requirement referred to in p a r a g r a ph (a), docs not e x c e ed the p e r c e n t a ge specified in the regulations in respect of particular kinds or categories of those assets, unless the Registrar o t h e r w i se a p p r o v es either in a d v a n ce or at any time after having r e c e i v ed the notice referred to in section 2 9 ( 3 )— liabilities and (i) in a particular case: (ii) for the specified period; and (iii) subject to such conditions as the Registrar may d e t e r m i n e . "; (c) by the addition of the following subsection: and " ( 3) Despite the requirement in subsection (1) that an asset must be valued at fair value, if the Registrar is satisfied that the value of an asset when calculated in a c c o r d a n ce with financial reporting standards does not reflect a reasonable value for p u r p o s es of this Act, the Registrar m a y— (a) a p p o i nt another person, at the cost of to place a r e a s o n a b le value on that asset, which value so d e t e r m i n ed will be d e e m ed to be the value of the asset; or direct a long-term in a m a n n er d e t e r m i n ed by the Registrar, which value so calculated will be d e e m ed to be the value of the a s s e t . ". to calculate the value insurer, insurer the (b) A m e n d m e nt of section 34 of A ct 52 of 1998, as a m e n d ed by s e c t i on 14 of A ct 17 of 2 0 03

14. Section 34 of the L o n g - t e rm Insurance Act, 1998, is hereby a m e n d ed by the substitution for subsection (2) of the following subsection: " ( 2) A long-term insurer shall not invest in derivatives other than for one or m o re of the following r e a s o n s: (a) Derivatives designated as an asset in respect of a linked policy; (b) derivatives acquired out of or in respect of assets that are in excess of the assets required to m e et the long-term long-term policies and capital a d e q u a cy r e q u i r e m e nt in terms of section 3 0 ( 1 ); for the p u r p o se of efficient portfolio m a n a g e m e n t; for the p u r p o se of reducing investment risk: i n s u r e r 's liabilities under (c) (d) Provided t h a t— (i) in respect of p a r a g r a p hs (a), insurer will, or (b) and (c), reasonably expects to, have the asset at the settlement date of the derivative instrument which m a t c h es the obligations u n d er that instrument and from which it can discharge those obligations; in respect of paragraph (d), t h e r e t o . ". the statutory actuary has in writing agreed the long-term (ii) A m e n d m e nt of section 36 of A ct 52 of 1998, as a m e n d ed by s e c t i on 15 of A ct 17 of 2 0 03

15. Section 36 of the L o n g - t e rm I n s u r a n ce Act, 1998, is hereby a m e n d ed by the addition of the following subsection: " ( 3) If the Registrar is satisfied that a statement forming part of the returns furnished by the long-term insurer in t e r ms of subsection (1) or (2) requires further investigation, the Registrar may by notice direct the long-term insurer to furnish him or her by a specific date or within a specific period with a r e p o r t— (a) (b) in the m e d i um a nd form; and containing the required information, Act No. 27, 2008 INSURANCE LAWS AMENDMENT ACT, 2008 compiled by a person nominated by the Registrar at the cost of the insurer.". long-term Substitution of section 46 of A ct 52 of 1 9 98

16. T he following section is hereby substituted for section 46 of the L o n g - t e rm I n s u r a n ce Act, 1998: "Policy to be actuarially s o u nd 46. (_1) A long-term insurer shall n o t— (a) enter into any particular kind of long-term policy unless the statutory actuary is satisfied that the p r e m i u m s, benefits and other values thereof are actuarially sound; (b) m a ke a distinction between the p r e m i u m s, benefits or other values of different long-term policies unless the statutory actuary is satisfied that the distinction is actuarially justified: or award a b o n us or similar benefit to a policyholder u n l e s s— (c) (i) (ii) it is done in a c c o r d a n ce with the principles and practices of financial m a n a g e m e nt of the long-term insurer; and the statutory actuary is satisfied that it is actuarially sound and that a surplus is available for that purpose. (2) For the p u r p o s es of subsection ( l ) ( c ) ( i) 'principles and practices of the board of financial m a n a g e m e n t' m e a ns a statement approved by directors of the long-term insurer setting out the discretion retained by the board of directors and the p a r a m e t e rs within which that discretion m u st be exercised in respect of long-term policies w h e re the long-term insurer has to exercise its discretion in a w a r d i ng a bonus or similar benefit.". S u b s t i t u t i on of section 49 of A ct 52 of 1998

17. T he following section is hereby substituted for section 49 of the L o n g - t e rm Insurance Act, 1998: 'Limitation of r e m u n e r a t i on to i n t e r m e d i a r i es 4 9. No consideration shall be offered or provided by a long-term insurer or a person on behalf of insurer or a c c e p t ed by any long-term independent intermediary for rendering services as intermediary as referred to in the regulations, other than c o m m i s s i on or r e m u n e r a t i on c o n t e m p l a t ed in the regulations and otherwise than in a c c o r d a n ce with the r e g u l a t i o n s . ". the I n s e r t i on of section 4 9A in A ct 52 of 1 9 98

18. T he following section is hereby inserted after section 49 of the L o n g - t e rm Insurance Act, 1998: " B i n d er a g r e e m e n ts 4 9 A. (1) A long-term insurer may, in terms of a written a g r e e m e nt only, and in a c c o r d a n ce with any r e q u i r e m e n t s, limitations or prohibitions that may be prescribed by regulation, allow another p e r s on to do any o ne or m o re of the following on behalf of that insurer: (a) Enter into, vary or renew a long-term policy, other than a long-term reinsurance policy, on behalf of that insurer; determine the w o r d i ng of a long-term policy; determine p r e m i u ms under a long-term policy; d e t e r m i ne the value of policy benefits u n d er a long-term policy; settle claims under a long-term policy. (b) (c) (d) (e) (2) A written agreement referred to in subsection (1) m u s t— Act No. 27. 2008 INSURANCE LAWS AMENDMENT ACT, 2008 (a) (b) (c) (d) (e) (f) (g) (h) to d e t e r m i ne p r e m i u ms the c i r c u m s t a n c es under w h i ch set out which of the activities referred to in subsection (1) that other person m ay perform and the particular k i n ds of long-term policies in respect of which those activities m ay be performed; set out the particular kinds of long-term policies w h i ch m ay be entered into, varied or r e n e w ed by that other p e r s o n; state if that other person is authorised to d e t e r m i ne the w o r d i ng of the policies referred to in paragraph (a), and if authorised, the extent to which and the w o r d i ng m ay be determined; in is authorised state if that other person respect of the policies referred to in p a r a g r a ph (a), and if authorised, the gross p r e m i u ms or the basis for the calculation of gross p r e m i u ms that may be determined, and the extent to w h i ch and the c i r c u m s t a n c es under which the p r e m i u ms m ay be d e t e r m i n e d; state if that other person is authorised to d e t e r m i ne the value of policy benefits, and if authorised, the m a x i m um 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 w h i ch and the c i r c u m s t a n c es under which the benefits m ay be d e t e r m i n e d; state the is authorised policies referred to in paragraph (a), and if authorised, the extent to which and the circumstances under which the claims may be settled: state the basis on which that other person will be r e m u n e r a t ed for services rendered in terms of paragraphs (b) to (f), w h i ch basis m u st be consistent with any r e q u i r e m e n t s, limitations or prohibitions as m ay be prescribed by regulation; oblige that other person t o— to settle c l a i ms under if that other person (i) disclose to policyholders of policies referred to in paragraph (a) (aa) the n a me of the relevant long-term insurer, and the fact that that other person is acting in terms of an a g r e e m e nt contemplated in this section; and (ii) (iii) (bb) any r e m u n e r a t i on payable to that other person in terms of an agreement c o n t e m p l a t ed in this section; include the n a me of the long-term insurer u n d e r w r i t i ng the long-term policy in any a d v e r t i s e m e n t, b r o c h u re or similar c o m m u n i c a t i on which relates to the l o n g - t e rm policy referred to in p a r a g r a ph (a); k e ep and maintain proper b o o ks of account and other records in respect of the policies referred to in p a r a g r a ph (a) and allow the long-term insurer, its statutory actuary and its auditors full and unfettered access to those b o o ks of a c c o u nt and r e c o r d s; and (iv) m a ke available to the long-term insurer, its statutory actuary and its auditors the policies referred to in p a r a g r a ph (a) and any information identity thereto, including n u m b e rs and contact details of p o l i c y h o l d e r s, insured p e r s o ns and beneficiaries, upon request; the n a m e s, relating (i) (j) prohibit that other person to delegate, assign or s u b c o n t r a ct any of the functions referred to in p a r a g r a p hs (b) to (f) to a n o t h er p e r s o n; and state the c i r c u m s t a n c es under which the a g r e e m e nt will lapse or may be terminated, and the necessary steps that m u st be taken to e n s u re the effective and efficient termination of the a g r e e m e nt t a k i ng into account the interests of policyholders. (3) A written agreement referred to in subsection ( 1 ). subject to any r e q u i r e m e n t s, limitations or prohibitions as m ay be prescribed by regula­ t i o n— (a) m ay not authorise that other person to add an a m o u nt to any gross p r e m i um referred to in subsection (2)(d); Act No. 27, 2008 INSURANCE LAWS AMENDMENT ACT, 2008 (b) m ay not authorise that other person to deduct any a m o u nt from any c l a i ms referred to in subsection (2)(f); or (c) m ay provide or prohibit indirectly that person participate in the profits attributable to the policies referred to in subsection 2(a). to directly or (4) A person that entered into an a g r e e m e nt c o n t e m p l a t ed in subsection (1) with a long-term insurer m a y— (a) (b) to (e) in r e n d er the services c o n t e m p l a t ed (l)(a) long-term respect of any kind of long-term policy issued by that in the a g r e e m e nt only in a c c o r d a n ce with any insurer identified r e q u i r e m e n t s, limitations or prohibitions as may be prescribed by regulation; and in subsection not render any of the services contemplated in subsection (1)(a) (e) long-term policy long-term insurer not identified in the agreement. in respect of any kind of issued by to that to term in an (5) Despite any the contrary contained a g r e e m e nt c o n t e m p l a t ed in subsection (1) the long-term insurer that entered into the a g r e e m e nt r e m a i n s— (a) (b) r e s p o n s i b le for c o m p l i a n ce with this Act; liable for any claims relating to policies included in the a g r e e m e n t, including any c l a i ms that m ay arise b e c a u se of the failure of that other person to c o m p ly with the a g r e e m e n t; and the o w n er of any the policies c o n t e m p l a t ed in the a g r e e m e n t, which must, upon termination of the a g r e e m e n t, be returned to the long-term insurer. information and d o c u m e n t a t i on relating (c) to (6) A ny party to a written agreement referred to in subsection (1) must m a ke a c o py of that a g r e e m e nt available to the Registrar on r e q u e s t . ". Substitution of section 53 of A ct 52 of 1998

19. T he following section is hereby substituted for section 53 of the L o n g - t e rm Insurance Act, 1998: " O p t i on for p a y m e nt of policy benefits in m o n ey 5 3. (1) [ N o t w i t h s t a n d i n g] Despite the t e r ms of an assistance policy entered into before 1 June 2 0 0 9, the policyholder is entitled to d e m a nd that a policy benefit which is expressed otherwise than [in] as a sum of m o n ey [shall] m u st be provided as a sum of money, in w h i ch case the s um of m o n ey m u st be equal in value to the cost the long-term insurer w o u ld h a ve incurred had the policy benefit been provided o t h e r w i se than as a s um of m o n e y. that provides (2) W h e re an assistance policy for a policy benefit expressed otherwise than as a sum of m o n ey is entered into on or after

1 J u ne 2 0 0 9. that policy m u s t— (a) provide that the policyholder is entitled to d e m a nd that the policy benefit be provided as a sum of m o n ey in lieu of the benefit on the o c c u r r e n ce of the event insured against; and state the a m o u nt of the policy benefit that is to be provided as a sum of m o n e y. (b) (3) W h e re a policy benefit expressed otherwise than as a sum of m o n ey is provided as a sum of money, the a m o u nt of that policy benefit may not exceed the m a x i m um a m o u nt referred to in the definition of 'assistance p o l i c y' in section 1(1) of this A c t . ". Act No. 27, 2008 INSURANCE LAWS AMENDMENT ACT, 2008 S u b s t i t u t i on of section 54 of A ct 52 of 1998

19A. T he following section is hereby substituted for section 54 of the L o n g - t e rm Insurance Act. 1998: 'Limitation on p r o v i s i o ns of certain policies 5 4. (1) A long-term insurer m ay n o t— undertake to provide policy benefits, or provide policy benefits, under; provide consideration upon the surrender of; or (a) (b) (c) m a ke a loan upon the security of, a long-term policy c o n t e m p l a t ed in a c c o r d a n ce with the r e q u i r e m e n ts and limitations set out in the regulations. (2) T he requirements and limitations set out in regulations m a de under subsection (1) apply from the inception of a policy, if the regulation so provide, irrespective of the fact that the policy was entered into before or after the c o m m e n c e m e nt of this Act or the r e g u l a t i o n s . ". in the regulations, o t h e r w i se than A m e n d m e nt of section 66 of A ct 52 of 1998 2 0. Section 66 of the L o n g - t e rm Insurance Act, 1998, is hereby a m e n d e d— (a) by the substitution in subsection (1) for p a r a g r a p hs (a) and (b) of the following paragraphs: "(a) c o n t r a v e n es or fails to c o m p ly with a provision of a notice, directive or request referred to in section 4(3), (4) or (5)(a)(i), 22(2) or 2 7 ( 2 ); (b) contravenes or fails to c o m p ly with a provision of section 8( 1 )(a) or (b), 16(2). 23(1), 28(1), 44(1), 4 5, 4 7, 49 or 4 9 A ; "; (b) by the substitution for subsection (2) of the following subsection: " ( 2) A person, other than a long-term insurer, w ho c o n t r a v e n es or fails to c o m p ly with a provision of section 7( 1 )(a), 8(3), 20(5)(b), 26( 1) or (2) or 50(4) or (6), shall be guilty of an offence and liable on conviction to a fine not e x c e e d i ng Rl 0 00 0 00 or to i m p r i s o n m e nt for a period not e x c e e d i ng 10 years or to both such fine and such i m p r i s o n m e n t . ". A m e n d m e nt of s e c t i on 67 of A ct 52 of 1998 2 1. Section 67 of the L o n g - t e rm Insurance Act, 1998, is hereby a m e n d ed by the substitution for paragraphs (a) and (b) of subsection (1) of the following p a r a g r a p h s: " ( a) contravenes or fails to c o m p ly with a provision of a notice, directive or request referred to in section 4(2), (3) or (4), 22(1) or (2), 27(1), 31(1), 35(1) or (2)(a) or 36(2); (b) contravenes or fails to comply with a provision of section 7(1)(b), 8(2), 16(1), 17, 18, 23(1) or (2), 25(1), 29(3). 36(1), 4 4 ( 1 ). 4 5, 4 8 ( 1 ), 4 9, 4 9 A. 54 or 5 5 ( 1 ) ; ". A m e n d m e nt of section 71 of A ct 52 of 1998 2 2. Section 71 of the L o n g - t e rm I n s u r a n ce Act, 1998, is hereby a m e n d e d— (a) by the insertion after subsection (2) of the following subsection: " ( 2 A) No e x e m p t i on granted under any law under which a long-term insurer is incorporated or registered shall constitute an e x e m p t i on from the provisions of this A c t . "; and (b) by the substitution for subsection (3) of the following subsection: " ( 3) T he financial statements of a long-term insurer, other than the financial statements d r a wn up by the statutory actuary, shall be d r a wn up in a c c o r d a n ce with [ G e n e r a l ly A c c e p t ed A c c o u n t i ng and presented P r a c t i c e] to a widely-held c o m p a n y . ". reporting standards applicable financial Act No. 27, 2008 INSURANCE LAWS AMENDMENT ACT, 2008 A m e n d m e nt of section 72 of A ct 52 of 1998 2 3. Section 72 of the L o n g - t e rm Insurance Act, 1998, is hereby a m e n d e d— (a) insertion after paragraph (g) in subsection (1) of the following by the paragraph: "(gA) prescribing in respect of section 4 9 A, r e q u i r e m e n t s, limitations or prohibitions relating t o— (i) (ii) (iii) (iv) (v) the a g r e e m e n ts contemplated in section 4 9 A ( 1 ); any additions to gross p r e m i u ms or d e d u c t i o ns from c l a i ms in respect of policies referred to in the a g r e e m e n ts c o n t e m­ plated in section 4 9 A ( 1 ); any consideration that m ay be offered or p r o v i d ed from, by or on behalf of a long-term insurer to a p e r s on that enters into an agreement c o n t e m p l a t ed in section 4 9 A ( 1) with a long-term insurer; any participation or sharing in the profits attributable to the policies referred in to section 4 9 A ( 1 ); and the circumstances under which a person w ho has entered into an a g r e e m e nt c o n t e m p l a t ed in section 4 9 A ( 1) m ay render services in respect of a policy not referred to that person by the relevant inter- mediary."; the a g r e e m e n ts c o n t e m p l a t ed insurer or an i n d e p e n d e nt in (b) by the substitution for subsection (2) of the following subsection: " ( 2) Regulations m a de under this section m a y— (a) (b) (c) differentiate b e t w e en different kinds of insurers, policies, a g r e e­ m e n ts or contracts, w h i ch may, for the p u r p o s es of this section, be defined either in relation to categories, types or k i n ds of insurers or policies or in any other m a n n e r; be limited in its application to a particular kind of insurer, policy, a g r e e m e nt or contract, w h i ch may, for the p u r p o s es of this section, be defined either in relation to categories, types or k i n ds of insurers or policies or in any other m a n n e r; and prescribe a fine or a period of i m p r i s o n m e nt not e x c e e d i ng one year for a contravention of or a failure to c o m p ly with a provision of the r e g u l a t i o n s . "; and (c) by the insertion after subsection (2) of the following subsections: "(2A)(a) T he Minister, despite 'business of a m e d i c al s c h e m e' in section 9(1) of the M e d i c al S c h e m es Act, m ay m a ke regulations identifying a kind, type or category of contract as a health policy. the definition of (b) Regulations under paragraph (a)— (i) m u st be m a de o n l y— in consultation with the Minister of Health; (aa) (bb) after consultation between the National Treasury, the Registrar and the Registrar of M e d i c al S c h e m es established under the Medical S c h e m es Act; and (cc) after having regard to the objectives and p u r p o se of the the following principles including Medical S c h e m es Act, entrenched t h e r e i n— (A) c o m m u n i ty rating: (B) open enrolment; and (C) cross-subsidisation within medical s c h e m e s; and (ii) must provide for a long-term insurer to submit specified informa­ tion on any product within a kind, t y pe or category of contract referred to in paragraph (a) to the Registrar and the Registrar of Medical S c h e m es within any specified t i m e f r a m e s; (iii) m ay provide for matters relating to the design and m a r k e t i ng of any product within a kind, type or category of contract referred to in paragraph (c) W h e re in paragraph (a), the kind, type or category of contract identified as a health (a). the Minister has m a de regulations referred to Act No. 27, 2008 INSURANCE LAWS AMENDMENT ACT, 2008 in the regulations, is subject policy S c h e m es Act. to this A ct and not the Medical (2B) Before regulations in terms of this Act are p r o m u l g a t e d, the Minister must publish the draft regulations in the Gazette for public c o m m e nt and submit the regulations to Parliament, while it is in session, their pro- for parliamentary m u l g a t i o n . ". least one m o n th before scrutiny at A m e n d m e nt of S c h e d u le 1 to A ct 52 of 1998, as a m e n d ed by s e c t i on 21 of A ct 17 of 2 0 03 2 4. Schedule 1 to the L o n g - t e rm Insurance Act, 1998, is hereby a m e n d e d— (a) by the substitution in paragraph 1 for the definition of " d e r i v a t i v e s" of the following definition: " ' d e r i v a t i v e s' m e a n s— (a) an option contract [as c o n t e m p l a t ed in the definition of 'securi- ties' in section 1 of the S t o ck E x c h a n g es Control Act, 1985 (Act N o. 1 of 1985)]; a futures contract [and an o p t i on contract as defined in section 1 of the Financial M a r k e ts Control Act, 1989 (Act N o. 55 of 1989)]; and a contract for differences;"; (b) (c) (b) by the insertion in paragraph 1 after the definition of " d e r i v a t i v e s" of the following definition: " 'futures c o n t r a c t' m e a ns a standardised contract the effect of which is (a) (b) a person agrees to deliver to or receive from another person a certain quantity of corporeal or incorporeal things before or on a future date at a pre-arranged price; or an a m o u nt of m o n ey will be paid to or received from a n o t h er person before or on a future date according to whether the p r e - a r r a n g ed value or price of— (i) an asset: (ii) an index as a m e a ns of indicator that reflects c h a n g es in the value of one or more g r o u ps of shares or securities on one or more e x c h a n g e s: (iii) currency; (iv) rate of interest; or (v) any other factor, is h i g h er or l o w er before or on that future date than the p r e - a r r a n g ed value or p r i c e ; "; (c) in p a r a g r a ph 1 for the definition of " m a r g i n" of by the substitution following definition: in relation i t em " ' m a r g i n ', of the Table to this S c h e d u l e] outside the R e p u b l i c, m e a ns 16(5)(a)(aa) the margin as defined the appropriate authority of the [state] country in which the stock e x c h a n ge is situated or w h i ch is required by that stock e x c h a n g e ; "; issued or a p p r o v ed by to a stock e x c h a n ge in the regulations [referred to the in (d) by the substitution in paragraph 1 for the definition of " m a r g in d e p o s i t" of the following definition: " ' m a r g in d e p o s i t' m e a ns a margin with S A F EX and a stock e x c h a n ge [referred to in i t em 16(5)(a)(aa) of t he Table to this S c h e d u l e] outside the R e p u b l i c ; "; (e) by the substitution in p a r a g r a ph 1 of the definition of " m a r g in w i th S A F E X" for the following definition: ' m a r g in w i th S A F E X' m e a ns the margin as defined in the rules of the South African Futures E x c h a n ge referred the F i n a n c i al M a r k e ts Control A c t, 1989] section 18 of the Securities Services Act, 2 0 04 (Act N o. 36 of 2 0 0 4 ) ; "; in [section 17 of to (f) by the insertion in paragraph 1 after the definition of " n . e . s ." of the following definition: Act No. 27, 2008 INSURANCE LAWS AMENDMENT ACT. 2008 " 'option c o n t r a c t' m e a ns a standardised contract the effect of w h i ch is that a person acquires the o p t i o n— (a) to buy from or to sell to another person a certain quantity of corporeal or incorporeal things before or on a future date at a pre-arranged price; or that an a m o u nt of m o n ey will be paid to or received from a n o t h er person before or on a the pre-arranged value or price of— future date according to w h e t h er (b) (i) an asset; (ii) an index as a m e a ns of indicator that reflects c h a n g es in the value of o ne or more g r o u ps of shares or securities on one or more e x c h a n g e s; (iii) currency; (iv) rate of interest; or (v) any other factor, is h i g h er or l o w er before or on that future date than the pre-arranged value or p r i c e ; "; (g) by the substitution in the Table for item 2 of the following item: " 2. A credit balance in an account with, or a deposit, including a negotiable deposit or a bill accepted by, or a p r o m i s s o ry note issued by. an institution [finally] registered u n d er the B a n ks Act, 1990 (Act N o. 94 of 1990), or the Mutual B a n ks Act, 1993 (Act N o. 124 of 1 9 9 3 ) . "; (h) by the substitution in the Table for item 7 of the following item: "7, Securities issued by. and loans m a de to, the Local Authorities L o a ns Fund Board under the repealed Local Authorities L o a ns Fund A c t, 1984 (Act N o. 67 of 1 9 8 4 ) . "; (i) by the substitution in the Table for item 17 of the following item: "17. [Units] Participatory interests in a [unit trust] collective invest­ ment s c h e me registered in terms of the [Unit Trusts Control A c t, 1981 (Act N o. 54 of 1 9 8 1 )] Collective I n v e s t m e nt S c h e m es Control Act, 2 0 02 (Act No. 45 of 2 0 0 2 ) . "; (j) by the substitution in the Table for sub-item (b) of item 20 of the following sub-item: "(b) a person in the Republic, e x c l u d i ng p r e m i u ms d ue and payable to the long-term insurer in respect of long-term insurance business carried on in the R e p u b l i c; a n d "; and (k) by the addition in the Table after item 20 of the following item: " 2 1. P r e m i u ms due and p a y a b le to the long-term insurer in r e s p e ct of long-term insurance business carried on in the R e p u b l i c ". A m e n d m e nt of S c h e d u le 3 to A ct 52 of 1998, as a m e n d ed by s e c t i on 23 of A ct 17 of 2 0 03 2 5. Schedule 3 to the L o n g - t e rm Insurance Act, 1998, is hereby a m e n d e d— in paragraph 4(b) the substitution for sub-item (i) of the (a) following by sub-item: (i) (aa) (bb) an amount, e x c l u d i ng a p r e m i um in respect of a long-term reinsurance policy, which r e m a i ns unpaid after the expiry of a period of 12 m o n t hs from the date on which it b e c a me due and payable; any a m o u nt of p r e m i um that is d ue and payable, including a p r e m i um debited to an intermediary or a deferred instalment of a p r e m i um that r e m a i ns unpaid to an insurer (irrespective of whether or not the p r e m i um has been paid to an intermediary), after the expiry of a period of 90 d a ys from the dale on w h i ch it b e c a me due and payable in t e r ms of the long-term policy, but excluding a p r e m i um in respect of a long-term r e i n s u r a n ce p o l i c y ; "; and Act No. 27, 2008 INSURANCE LAWS AMENDMENT ACT, 2008 (b) by the substitution s u b p a r a g r a p h: in paragraph 7 for s u b p a r a g r a ph (1) of the following " ( 1) T he liabilities of a long-term insurer, other than its c o n t i n g e nt liabilities under long-term policies, shall be d e t e r m i n ed in a c c o r d a n ce with [ S o u th A f r i c an S t a t e m e n ts of G e n e r a l ly A c c e p t ed A c c o u n t i ng to widely-held P r a c t i c e] c o m p a n i e s . ". applicable standards reporting financial A m e n d m e nt of A r r a n g e m e nt of S e c t i o ns of A ct 52 of 1 9 9 8, as a m e n d ed by section 1 of A ct 17 of 2 0 03 2 6. T he A r r a n g e m e nt of Sections in Part VII of the L o n g - t e rm I n s u r a n ce A c t. 1998. is hereby a m e n d ed by the insertion after item 49 of the following item: "49A. B i n d er a g r e e m e n t s ". A m e n d m e nt of section 1 of A ct 53 of 1998, as a m e n d ed by section 25 of A ct 17 of 2 0 03

27. Section 1( 1) of the Short-term Insurance Act, 1998, is hereby a m e n d e d— (a) by the substitution for the definition of " a c c i d e nt a nd h e a l th p o l i c y" of the following definition: " 'accident a nd health p o l i c y' m e a ns a contract in terms of which a person, in return for a p r e m i u m, undertakes to p r o v i de policy benefits if a disability, health or death event c o n t e m p l a t ed in the contract as a risk event occurs, and includes a reinsurance policy in respect of such a c o n t r a c t— (a) e x c l u d i ng any c o n t r a c t— (i) that provides for the conduct of the b u s i n e ss of a medical s c h e me referred to in section 1(1) of the M e d i c al S c h e m es Act; or (ii) of which the policyholder is a m e d i c al s c h e me registered u n d er the Medical S c h e m es Act and w h i ch c o n t r a c t— (aa) relates to a particular m e m b er of the s c h e me or to the beneficiaries of such m e m b e r; and is entered into by the medical s c h e me to fund in w h o le or in part its liability to the m e m b er or the beneficiaries of in t e r ms of the m e m b er referred to in s u b p a r a g r a ph (aa) its rules; b ut (bb) (b) including, despite p a r a g r a ph (a)(i), specifically any category of contracts identified by the Minister by regulation u n d er section 7 0 ( 2 A) as an accident and health p o l i c y ; "; (b) by the insertion after the definition of " a p p r o v ed r e i n s u r a n ce p o l i c y" of the following definition: " ' A u d i t i ng Profession A c t' m e a ns the A u d i t i ng Profession Act, 2 0 05 (Act N o. 26 of 2 0 0 5 ) ; "; (c) by the substitution for the definition of " a u d i t o r" of the following definition: " ' a u d i t o r' m e a ns an auditor [Public A c c o u n t a n t s' a nd A u d i t o r s' A c t, 1991 (Act N o. 80 of 1 9 9 1 )] A u d i t i ng Profession A ct and appointed in t e r ms of section 19(1) or 20(1) of this A c t ; "; registered t e r ms of the in (d) by the insertion after the definition of " e n g i n e e r i ng p o l i c y" of the following definitions: " 'fair v a l u e' has the m e a n i ng assigned standards; 'financial r e p o r t i ng s t a n d a r d s' has section 1(1) of the C o m p a n i es A c t; 'financial s t a t e m e n t s' has the m e a n i ng assigned to it in section 1(1) of the C o m p a n i es A c t ; "; the m e a n i ng a s s i g n ed to it in financial reporting to in it (e) by the insertion after the definition of " m a n a g i ng e x e c u t i v e" of the following definition: " ' M e d i c al S c h e m es A c t' m e a ns the M e d i c al S c h e m es Act, 1998 (Act N o. 131 of 1 9 9 8 ) ;" Act No. 27, 2008 INSURANCE LAWS AMENDMENT ACT. 2008 (f) the substitution by definition: for the definition of " M i n i s t e r" of the following " ' M i n i s t e r' m e a ns the [Minister of F i n a n ce or a ny o t h er M i n i s t er to w h om the a d m i n i s t r a t i on of this A ct m ay be a s s i g n ed f r om t i me to t i m e] C a b i n et m e m b er responsible for f i n a n c e : "; (g) (h) by the deletion of the definition of " P u b l ic A c c o u n t a n t s' a nd A u d i t o r s' A c t "; by the substitution for the definition of "public c o m p a n y" of the following definition: " 'public c o m p a n y' m e a ns a c o m p a ny with a share capital which is a public c o m p a ny under section 19 of the C o m p a n i es A c t ; "; (i) the substitution by definition: for the definition of " R e g i s t r a r" of the following " ' R e g i s t r a r' m e a ns the Registrar or the Deputy Registrar of Short-term I n s u r a n ce referred to in section [2(1)] 2 ; "; and (j) by the insertion after the definition of " s h o r t - t e rm r e i n s u r a n ce p o l i c y" of the following definition: " 'statutory a c t u a r y' m e a ns an actuary appointed in a c c o r d a n ce with section 19A(1) or 2 0 ( 1 ) ; "; and (k) by the insertion after the definition of "survival benefit" of the following definition: " 'this A c t' includes any regulation m a d e, or matter prescribed u n d er this A c t ; ". (l) by the insertion after the definition of " u n b o r n" of the following definition: " ' w i d e l y - h e ld c o m p a n y' has the m e a n i ng assigned to it in section 1(6) of the C o m p a n i es A c t . ". Substitution of section 2 of A ct 53 of 1998 2 8. T he following section is hereby substituted for section 2 of the Short-term Insurance Act, 1998: " R e g i s t r ar of S h o r t - t e rm I n s u r a n ce

2. T he executive officer and a deputy executive officer m e n t i o n ed in section 1 of the Financial Services Board Act, shall be the Registrar and the Deputy Registrar of Short-term Insurance, respectively.". A m e n d m e nt of s e c t i on 4 of A ct 53 of 1998, as a m e n d ed by section 26 of A ct 17 of 2 0 03 2 9. Section 4 of the Short-term Insurance Act, 1998, is hereby a m e n d ed by the substitution for subsection (4) of the following subsection: " ( 4) (a) T he Registrar may, in order to ensure c o m p l i a n ce with or to prevent a contravention of this Act, issue a directive to any person or persons to w h om the provisions of this Act a p p l y: (b) A directive issued in terms of paragraph (a) m a y— (i) (ii) apply generally; or be limited in its application to a particular person or kinds of p e r s o n s, which may, for p u r p o s es of to categories, types or in any other manner. in this subsection, be defined either terms of paragraph (c) A directive takes effect on in relation the date (a) issued d e t e r m i n ed by the Registrar in the directive. (d) In the event of a departure from section 3(2) or 4(1), (2) or (3) of the Promotion of A d m i n i s t r a t i ve Justice Act, 2 0 00 (Act N o. 3 of 2 0 0 0 ), the directive must include a statement to that effect and the reasons for such departure. (e) T he Registrar may a m e nd or r e v o ke any issued directives. (f) T he Registrar may, where a directive is issued to ensure the protection of the public in general, publish the directive in the Gazette and any other m e d ia that the Registrar d e e ms a p p r o p r i a t e . ". Act No. 27, 2008 INSURANCE LAWS AMENDMENT ACT, 2008 A m e n d m e nt of section 7 of A ct 53 of 1998

30. Section 7 of the Short-term Insurance Act, 1998, is hereby a m e n d ed by the substitution in subsection (2) for p a r a g r a p hs (d), (f) and (g) of the following p a r a g r a p h s: "(d) a medical s c h e me registered under the M e d i c al S c h e m es Act, [ 1 9 67 ( A ct N o. (f) (g) 72 of 1967)] if and in so far as it acts in a c c o r d a n ce with that Act; an agricultural co-operative [or special f a r m e r s' c o - o p e r a t i ve f o r m ed a nd i n c o r p o r a t e d] registered u n d er the C o - o p e r a t i v es Act, [1981 (Act N o. 91 of 1981)] 2 0 05 (Act N o. 14 of 2 0 0 5 ), or allowed to continue to operate in t e r ms of section 97 of that Act, if and in so far as it [ p r o v i d e s, u n d er a s c h e me or a r r a n g e m e nt its m a in objectives, c o n d u c ts short-term insurance business, and provides benefits the a m o u nt of which is not guaranteed and in respect of w h i ch its liability is limited to the a m o u nt standing to the credit of a fund specially m a i n t a i n ed for that p u r p o s e; the u n e m p l o y m e nt insurance fund established by the U n e m p l o y m e nt Insur­ ance Act, [ 1 9 66 (Act N o. 30 of 1966)] 2001 (Act N o. 63 of 2 0 0 1 ), if and in so far as it acts in a c c o r d a n ce with that Act; or'". its s t a t u t e s ], as part of in t e r ms of A m e n d m e nt of section 10 of A ct 53 of 1998 3 1. Section 10 of the Short-term Insurance Act, 1998, is hereby a m e n d ed by the substitution for p a r a g r a ph (h) of the following paragraph: " ( h) reasonably necessary to ensure insurance b u s i n e ss c o n c e r n ed is carried on s o u n d ly [and in a m a n n er w h e r e by the s h o r t - t e rm i n s u r er will h a ve assets w i th a fair v a l ue of not less t h an its liabilities a nd capital a d e q u a cy r e q u i r e m e n t] in c o m p l i a n ce with section 2 8 ( 1 ) , ". the short-term that A m e n d m e nt of section 19 of A ct 53 of 1998 3 2. Section 19 of the Short-term Insurance Act, 1998, is hereby a m e n d e d— (a) by the substitution for subsection (1) of the following subsection: " ( 1) A short-term insurer shall at all limes h a v e, o ne or m o re auditors appointed by it in a c c o r d a n ce with the provisions of the C o m p a n i es A ct applicable to a widely-held c o m p a n y . "; (b) (c) by the deletion of subsection (3): by the substitution for subsection (4) of the following subsection: " ( 4) If an auditor of a short-term insurer is a firm (as c o n t e m p l a t ed in the [Public A c c o u n t a n t s' and A u d i t o r s' A c t, 1991 ( A ct N o. 80 of 1991)] A u d i t i ng Profession A c t ), the R e g i s t r a r 's last approval of the a p p o i n t m e nt of that firm as auditor shall not lapse by reason of a c h a n ge in the m e m b e r s h ip of the firm if at least half of the m e m b e rs of the firm, after the c h a n g e, w e re m e m b e rs when the a p p o i n t m e nt of the firm w as last a p p r o v ed by the Registrar."; (d) by the substitution for subsection (5) of the following subsection: " ( 5) N o t w i t h s t a n d i ng a n y t h i ng to the contrary in any law c o n t a i n e d, the auditor of a short-term insurer s h a l l— (a) w h e n e v er the auditor furnishes copies of a report or other d o c u m e nt or particulars c o n t e m p l a t ed in section [20(5)(b)] 4 5 ( l ) ( a) and (3)(c) of the [Public A c c o u n t a n t s' a nd A u d i t o r s' A c t, 1 9 9 1] A u d i t i ng Profession Act, also furnish a copy thereof to the Registrar; and if the a u d i t o r 's a p p o i n t m e nt is terminated for any r e a s o n— (b) (i) submit to the Registrar a statement of w h at the auditor believes to be the reasons for that termination; and Act No. 27, 2008 INSURANCE LAWS AMENDMENT ACT, 2008 (c) (ii) if the auditor would, but for that termination, have had r e a s on to submit [to the s h o r t - t e rm i n s u r e r] a report c o n t e m p l a t ed in section [20(5)(a)] 45(1 )(a) and (3)(c) of the [ P u b l ic A c c o u n­ t a n t s' a nd A u d i t o r s' A c t, 1991] A u d i t i ng Profession Act, submit such a report to the Registrar; and inform the Registrar and the board of directors of the short-term insurer, without delay, in writing of any m a t t er relating to the [affairs] business of the short-term insurer of which the auditor [ b e c a m e] b e c o m es aware the a u d i t o r 's functions as auditor and which, in the opinion of the auditor, constitutes a contravention of section 2 8 ( 1) or any other section of this Act, or in future may prejudice the i n s u r e r 's ability to c o m p ly with section 28(1) or any other section of this Act, w h i ch information m u st give a description of the matter and m u st include such other particulars as the auditor c o n s i d e rs a p p r o p r i a t e . "; in the p e r f o r m a n ce of (e) by the substitution for subsection (7) of the following subsection: " ( 7) T he auditor of a short-term insurer m u st carry out the duties a s s i g n ed to the auditor of a short-term insurer by [the] this Act, the Act u n d er which that insurer is incorporated and [ u n d er w h i ch that i n s u r er is i n c o r p o r a t e d] the [Public A c c o u n t a n t s' a nd A u d i t o r s' A c t, 1 9 9 1] A u d i t i ng Profession Act, and in addition to those duties m u s t— (a) it that is properly prepared so as in relation to a statement forming part of the returns in respect of which the auditor is required to submit in terms of section 3 5, e x a m i ne that statement or part thereof and satisfy himself, herself or itself the requirements of this Act and express an opinion as to w h e t h er the statement or part thereof, including any a n n e x u re thereto, has in all material respects been prepared in a c c o r d a n ce with [section 2 0] C h a p t er IV of the [Public A c c o u n t a n t s' a nd A u d i t o r s ' A c t, 1 9 9 1] Auditing Profession Act; and to c o m p ly with (b) carry out the other duties prescribed by the M i n i s t e r . "; and (f) by the addition of the following subsections: " ( 8) Without derogating from an a u d i t o r 's right to do so in respect of a n y t h i ng which is material to the carrying out of the a u d i t o r 's duties, an auditor shall not be required to e x a m i ne or e x p r e ss an opinion in relation to a statement forming part of a return, report or certificate or to the particulars thereof, in respect of w h i ch a statutory actuary is required, in t e r ms of this Act, to m a ke an e x a m i n a t i o n, give an attestation or e x p r e ss an opinion. (9) An auditor m ay rely on the work performed by the statutory actuary in relation to the financial affairs of a short-term insurer, w h en the financial affairs of that auditor e x p r e s s es an opinion in relation to the short-term to c o m p l i a n ce with the prevailing auditing s t a n d a r d s . ". insurer in terms of this Act or any other law, subject Insertion of section 19A in A ct 53 of 1 9 98 3 3. T he following section is hereby inserted after section 19 of the Short-term Insurance Act, 1998: "Statutory a c t u a ry 19A. (1) A short-term insurer shall from time to t i me appoint, and at all times have, a statutory actuary under the c i r c u m s t a n c es d e t e r m i n ed by the Registrar, either generally or in a particular c a s e. (2) A short-term insurer may appoint an alternate to act in the place of its statutory actuary during his or her a b s e n ce for any reason. Act No. 27, 2008 INSURANCE LAWS AMENDMENT ACT, 2008 (3) No person other than a natural person w ho is p e r m a n e n t ly resident in the Republic, is a F e l l ow of the Actuarial Society of South Africa and has, as an actuary, appropriate practical e x p e r i e n ce to short-term insurance business, shall be appointed as a statutory actuary or his or her alternate. relating (4) No a p p o i n t m e nt of a statutory actuary or his or her alternate shall take effect unless it has been a p p r o v ed by the Registrar. (5) T he statutory actuary of a short-term insurer s h a l l— (a) (b) submit to the Registrar, if his or h er a p p o i n t m e nt is for any reason terminated, a statement of what he or she believes to be the r e a s o ns for that termination; and (i) without delay, report in writing to the board of directors of the short-term insurer any matter relating to the business of the short-term insurer of w h i ch he or she b e c o m es a w a re in the performance of his or her functions as statutory actuary and which, in his or her opinion, constitutes a c o n t r a v e n t i on of section 28(1) or any other section of this Act relating to the duties of the statutory actuary, or in future may prejudice the short-term i n s u r e r 's ability to c o m p ly with section 28( 1) or any other section of this A ct relating to the duties of the statutory actuary, which report m u st give a description of the matter and must include such other particulars as the statutory actuary considers appropriate: Provided report must be submitted without delay also to the Registrar w h e r e, in the opinion of the statutory actuary, the m a t t e r— (aa) materially prejudices the insurer's ability to c o m p ly with that the any of these sections; (bb) does not materially prejudice to c o m p ly with these sections, but the statutory actuary is of the opinion that i m m e d i a te r e m e d i al action must be taken by the short-term insurer; a nd i n s u r e r 's ability the (ii) if steps to rectify the matter are not taken by the board of directors of the short-term insurer to the satisfaction of the statutory actuary within 30 d a ys after the date of the report, without delay inform the Registrar. (6) (a) T he furnishing, in good faith, by a statutory actuary of a report or information in terms of subsection (5) shall not be d e e m ed to constitute a contravention of a provision of a law or a breach of a provision of a c o de of professional conduct to w h i ch he or she is subject. (b) T he failure, in good faith, by a statutory actuary to furnish a report or information in terms of this section shall not confer upon any person a right of action against the statutory actuary w h i c h, but for that failure, that person would not have had. (7) In addition to duties assigned to the statutory actuary by any other law or a c o de of professional practice, the statutory actuary s h a l l— (a) in relation to a statement forming part of the returns in respect of which he or she is required to submit in t e r ms of section 3 5. e x a m i ne that statement and satisfy himself or herself that it is properly d r a wn up so as to c o m p ly with the r e q u i r e m e n ts of this Act and attest or, as the case m ay be, express an opinion in c o n n e c t i on with that statement; and (b) carry out the other duties provided for in this Act or prescribed by the Minister. (8) A statutory actuary s h a l l— (a) have the right of access at all times to the a c c o u n t i ng records and other to b o o ks and d o c u m e n ts of the short-term information require from the directors or officers of that insurer the insurer and be entitled Act No. 27, 2008 INSURANCE LAWS AMENDMENT ACT, 2008 and e x p l a n a t i o ns he or she d e e ms necessary for the carrying out of his or her duties; be entitled t o— (b) (i) (ii) attend and speak at a general meeting of the short-term insurer; receive the notices and other c o m m u n i c a t i o ns relating to a general m e e t i ng referred to in s u b p a r a g r a ph (i) that a m e m b er of that short-term insurer is entitled to r e c e i v e; and (c) (i) (ii) insurer on the short-term attend and be entitled to speak at any m e e t i ng of the board of directors of the meeting which c o n c e r ns the duties conferred on or a s s i g n ed to h im or h er as statutory actuary by or u n d er this Act and by any other law or code of professional practice; and receive the notices and other c o m m u n i c a t i o ns relating to any meeting referred to in s u b p a r a g r a ph (i) w h i ch a m e m b er of the board of directors is entitled to r e c e i v e . ". the b u s i n e ss of S u b s t i t u t i on of section 20 of A ct 53 of 1998 3 4. T he following section is hereby substituted for section 20 of the Short-term Insurance A c t. 1998: " A p p o i n t m e nt of a u d i t or or statutory actuary by R e g i s t r ar 2 0. (1) If a short-term insurer for any reason fails to appoint an auditor or statutory actuary, the Registrar may, n o t w i t h s t a n d i ng sections 2 6 9 ( 4) and 271 (1) of the C o m p a n i es Act, but subject to section 19 or 19A of this Act, appoint an auditor or statutory actuary for that short-term insurer. (2) A person or firm appointed under subsection (1) as auditor or statutory actuary of a short-term insurer shall be d e e m ed to h a ve been appointed by the short-term insurer in a c c o r d a n ce with this A c t . ". A m e n d m e nt of s e c t i on 21 of A ct 53 of 1998 3 5. Section 21 of the Short-term Insurance Act, 1998, is hereby a m e n d ed by t he substitution for subsection (1) of the following subsection: " ( 1) T he R e g i s t r ar may by notice require a short-term insurer to t e r m i n a te the a p p o i n t m e nt of a director, m a n a g i ng e x e c u t i v e, public officer[or].. auditor or statutory actuary of that short-term insurer, if the person or firm c o n c e r n ed is not fit and proper to hold the office c o n c e r n e d . ". A m e n d m e nt of section 22 of A ct 53 of 1 9 98

36. Section 22 of the Short-term Insurance Act, 1998, is hereby a m e n d e d— (a) by the substitution for subsection (1) of the following subsection: " ( 1) T he board of directors of a short-term insurer shall appoint an audit c o m m i t t ee of at least three m e m b e rs of w h om at least two shall be [ m e m b e rs of that b o a r d] independent n o n - e x e c u t i ve directors within the m e a n i ng of section 2 6 9 A ( 4 ) ( b) and (c) of the C o m p a n i es A c t . "; by the substitution in subsection (3) for the w o r ds p r e c e d i ng paragraph (a) of the following w o r d s: (b) " ( 3) T he functions of the audit c o m m i t t e e, in addition to the functions referred to in section 2 7 0 A ( 1) of the C o m p a n i es Act, shall [inter alia,] b e — "; Act No. 27, 2008 INSURANCE LAWS AMENDMENT ACT, 2008 (c) by the insertion after subsection (3) of the following subsection: " ( 3 A) T he audit c o m m i t t ee may appoint an a d v i s or or request any the e m p l o y ee of p e r f o r m a n ce of the functions referred to in subsection ( 3 ) . "; and to advise or assist the short-term insurer in it (d) by the substitution for subsection (4) of the following subsection: " ( 4) If the a p p o i n t m e nt or c o m p o s i t i on of an audit c o m m i t t ee is, in a particular case, inappropriate or impractical or would serve no useful p u r p o s e, the Registrar may, subject to such c o n d i t i o ns as the Registrar m ay d e t e r m i n e, e x e m pt the r e q u i r e m e n ts of subsection ( l ) . ". insurer c o n c e r n ed the short-term from A m e n d m e nt of s e c t i on 23 of A ct 53 of 1998, as a m e n d ed by section 31 of A ct 17 of 2 0 03 3 7. Section 23 of the Short-term Insurance Act, 1998, is h e r e by a m e n d e d— (a) by the substitution for the words preceding p a r a g r a ph (a) of the following w o r d s: " [ A] Despite the provisions of the C o m p a n i es Act a short-term insurer shall n o t — "; (b) by the substitution in p a r a g r a ph (a) for s u b p a r a g r a ph (ix) of the following s u b p a r a g r a p h: " ( i x) allow its subsidiary to acquire directly or indirectly shares in it in t e r ms of section 89 of the C o m p a n i es A c t [ : ] ; "; and (c) by the addition to paragraph (a) of the following s u b p a r a g r a p h: " ( x) c o n c l u de a transaction c o n t e m p l a t ed in section 3 8 ( 2 A) of the C o m p a­ nies A c t : ". A m e n d m e nt of s e c t i on 24 of A ct 53 of 1998 3 8. Section 24 of the Short-term Insurance Act, 1998, is hereby a m e n d e d— (a) by the substitution p a r a g r a p h: in subsection (2) for paragraph (a) of the following "(a) to or in the n a me of a trustee or c u s t o d i an of a [unit trust] collective investment s c h e me as defined in section 1 of the [Unit Trusts Control A c t, 1981 (Act N o. 54 of 1981)] Collective I n v e s t m e nt S c h e m es Control Act, 2 0 02 (Act N o. 45 of 2 0 0 2 ), or [of] a trustee or [ n o m i n a t ed c o m p a n y] representative of [the] such terms of custodian section 6 8 ( 6 ) ( a) of [ U n it Trust C o m p a n i e s] Collective the I n v e s t m e nt S c h e m es Control Act, 2 0 0 2 ; "; and [ a p p r o v ed by the R e g i s t r a r] a p p o i n t ed in (b) the substitution by p a r a g r a p h: in subsection (2) for p a r a g r a ph (d) of the following "(d) to or in the n a me of a [ p e r s on a c t i ng as a d e p o s i t a ry institution by virtue of an a u t h o r i s a t i on u n d e r] participant as defined in section [2] 1 of the [Safe D e p o s it of Securities Act, 1 9 92 (Act N o. 85 of 1992)] Securities Services A c t. 2 0 04 (Act N o. 36 of 2 0 0 4 ), or of a [ c o m p a n y] n o m i n ee c o n t e m p l a t ed in section [ 1 2 ( l ) ( s ) ( i )] 36(1)(b) read with section 39(2)(g) of the [ S t o ck E x c h a n g es C o n t r ol A c t, 1 9 8 5] Securities Services Act, 2 0 0 4: P r o v i d ed that the [ p e r s o n] participant or [ m e m b e r] n o m i n ee c o n c e r n ed is able, on request, to disclose the n a me of the beneficial s h a r e h o l d er on w h o se behalf shares are h e l d ; ". Act No. 27, 2008 INSURANCE LAWS AMENDMENT ACT. 2008 Substitution of section 28 of A ct 53 of 1998 3 9. T he following section is h e r e by substituted for section 28 of the Short-term Insurance Act, 1998: " M a i n t e n a n ce of financially s o u nd c o n d i t i on 2 8. (1) A short-term insurer shall at all t i m es maintain its business in a financially sound condition b y— (a) (b) (c) so as to be in a position requirement at all times. having assets; providing for its liabilities and capital a d e q u a cy r e q u i r e m e n t; and generally c o n d u c t i ng its business, its liabilities and capital a d e q u a cy to meet (2) A short-term insurer shall be d e e m ed to have failed to c o m p ly with if— subsection (1) (a) (b) (c) it d o es not have assets as required by section 2 9: it d o es not have in the R e p u b l ic assets as required by section 30; or it has not m a de provision for the liabilities and the capital a d e q u a cy r e q u i r e m e nt in accordance with the r e q u i r e m e n ts of [that s e c t i o n] those sections and Schedule 2. [section] sections 29, 30 and 32 referred in to (3) A short-term insurer w h i ch fails to c o m p ly with subsection (1) shall, the [within 30 d a ys after b e c o m i ng a w a re of it] without delay, notify Registrar of the failure and furnish the r e a s o ns therefor. (4) A short-term insurer shall not declare or pay a d i v i d e nd to its s h a r e h o l d e r s— (a) (b) (c) [if, a nd for as l o ng as,] while it fails or is likely to fail to c o m p ly with subsection (1)[, o r ]; if the declaration or p a y m e nt [of t he d i v i d e n d] would result in it failing or being likely to fail to c o m p ly with subsection (1)[.]; or if, after the a g g r e g a te value of assets required by section 29 w o u ld be less than the a g g r e g a te value of liabilities, issued share capital and non-distributable r e s e r v e s . ". the declaration or p a y m e nt Substitution of s e c t i on 29 of A ct 53 of 1 9 98 4 0. T he following section is hereby substituted for section 29 of the Short-term Insurance Act, 1998: "Assets 2 9. (1) A short-term insurer shall h a ve assets the aggregate value of which, on any day, is not less than [the a g g r e g a te of— (a)] the aggregate value on that day of its liabilities[;] and its capital a d e q u a cy requirement t he a d d i t i o n al a m o u nt c a l c u l a t ed as p r e s c r i b ed by r e g u l a t i o n ], [(b) when requirement are calculated in a c c o r d a n ce with S c h e d u le 2. the values of those assets, [ a n d] liabilities a nd capital a d e q u a cy (2) A short-term insurer shall, subject to section 3 1, h a ve assets in the R e p u b l ic of the kinds specified in S c h e d u le 1, the aggregate value of which on any day is not less than [the a g g r e g a te of—(a)] the aggregate value on that day of those of its liabilities which are to be met in the R e p u b l i c [ ;] and its capital a d e q u a cy r e q u i r e m e nt in respect of those liabilities [(b) t he a d d i t i o n al a m o u nt c a l c u l a t ed as p r e s c r i b ed by regulation,] w h en the values of those assets, [ a n d] liabilities and capital a d e q u a cy r e q u i r e m e nt are calculated in a c c o r d a n ce with S c h e d u le 2 . ". Act No. 27, 2008 INSURANCE LAWS AMENDMENT ACT. 2008 A m e n d m e nt of section 30 of A ct 53 of 1998 4 1. Section 30 of the Short-term Insurance Act, 1998, is h e r e by a m e n d e d— (a) by the substitution for subsection (1) of the following subsection: '"(1) Subject to section 31 and subsection (2), the assets w h i ch a short-term insurer is required in terms of section 2 9 ( 2) to h a ve in the R e p u b l ic shall, at their fair value, in respect of the particular k i n ds or categories of assets specified by regulation, w h en expressed as a p e r c e n t a ge of the aggregate value of the liabilities and the [ a d d i t i o n al a m o u n t] capital a d e q u a cy requirement referred to in section 29(2), not e x c e ed the p e r c e n t a ge specified by regulation in relation to those k i n ds or categories of a s s e t s . "; and (b) by the addition of the following subsection: " ( 3) Despite the r e q u i r e m e nt in subsection (1) that an asset m u st be valued at fair value, if the Registrar is satisfied that the value of an asset, w h en calculated in a c c o r d a n ce with financial reporting standards, d o es not reflect a reasonable value for p u r p o s es of this Act, the Registrar m a y— (a) to place a appoint another person, at r e a s o n a b le value on that asset, which value so d e t e r m i n ed will be d e e m ed to be the value of the asset; or direct the short-term insurer to calculate the value in a m a n n er w h i ch the Registrar d e t e r m i n e s, which value so calculated will be d e e m ed to be the value of the a s s e t . ". the cost of insurer, the (b) A m e n d m e nt of section 32 of A ct 53 of 1998 4 2. Section 32 of the Short-term Insurance Act, 1998. is hereby a m e n d e d— (a) (b) by the deletion in subsection (1) of paragraph (c); and by the substitution for subsections (2) and (3) of the following s u b s e c t i o n s: " ( 2) If an u n e x p i r ed risk provision is considered to be necessary, the insurer shall d e t e r m i ne its auditor and, w h e re a statutory actuary has been appointed, its statutory actuary. in consultation with the a m o u nt thereof (3) F or the p u r p o s es of subsection (1). an a p p r o v ed r e i n s u r a n ce policy the entered into with an insurer as c o n t e m p l a t ed in paragraph (d) of definition of ' a p p r o v ed reinsurance p o l i c y' in section 1, shall not be d e e m ed to cover the liabilities of a short-term insurer calculated in t e r ms of subsection (1)(a)[,] and (b) [ a nd (c)], the amount of the security referred to in that p a r a g r a p h . ". to an a m o u nt e x c e e d i ng A m e n d m e nt of s e c t i on 33 of A ct 53 of 1998, as a m e n d ed by section 33 of A ct 17 of 2 0 03 4 3. Section 33 of the Short-term Insurance Act, 1998, is hereby a m e n d ed by the substitution for subsection (2) of the following subsection: " ( 2) A short-term insurer shall not invest in derivatives other than for one or (b) m o re of the following r e a s o n s: (a) Derivatives acquired out of or in respect of assets that are in e x c e ss of the assets required to m e et the short-term insurer's liabilities under short-term policies and capital adequacy r e q u i r e m e nt in terms of section 2 9; for m a n a g e m e n t; a n d ]; or (c) [in s u ch a m a n n e r] for the purpose of efficient portfolio m a n a g e m e n t. Provided that the short-term insurer will, or reasonably e x p e c ts to. h a ve the asset at the settlement date of the derivative instrument w h i ch m a t c h es [its] the o b l i g a t i o ns under that instrument and from w h i ch it can discharge those o b l i g a t i o n s . ". investment risk [or for efficient p o r t f o l io the p u r p o se of reducing Act No. 27, 2008 INSURANCE LAWS AMENDMENT ACT, 2008 A m e n d m e nt of s e c t i on 35 of A ct 53 of 1998 4 4. Section 35 of the Short-term Insurance Act, 1998, is hereby a m e n d ed by the addition of the following subsection: " ( 3) If the Registrar is satisfied that a statement forming part of the returns furnished by the short-term insurer in terms of subsection (1) or (2) requires further investigation, the Registrar m ay by notice direct the short-term insurer to furnish him or her by a specific date or within a specific period with a r e p o r t— (a) (b) c o m p i l ed by a p e r s on nominated by the Registrar at the cost of the short-term insurer.". in the m e d i um and form; and c o n t a i n i ng the required information, S u b s t i t u t i on of section 48 of A ct 53 of 1998 4 5. T he following section is hereby substituted for section 48 of the Short-term Insurance Act, 1998: " [ I n t e r m e d i a r i e s: r e m u n e r a t i on a nd b i n d er a g r e e m e n t s] I n d e p e n d e nt i n t e r m e d i a r i e s: r e m u n e r a t i on 4 8. No consideration shall he offered or provided by a short-term insurer or a L l o y d 's broker or a representative of such insurer or broker or any person on behalf of such insurer or broker, or accepted by any i n d e p e n d e nt intermediary, other than c o m m i s s i on or r e m u n e r a t i on c o n t e m p l a t ed in the regulations and for rendering services as intermediary o t h e r w i se than in a c c o r d a n ce with the r e g u l a t i o n s . ". Insertion of section 4 8A in A ct 53 of 1998

46. T he following section is hereby inserted after section 48 of the Short-term Insurance Act, 1998: " B i n d er a g r e e m e n ts in a c c o r d a n ce with any 4 8 A. (1) A short-term insurer or a L l o y d 's u n d e r w r i t er may, in terms of a written agreement only, and r e q u i r e m e n t s, limitations or prohibitions that m ay be prescribed by regulation, allow another person to do any one or m o re of the following on behalf of that insurer: (a) enter into, vary or renew a short-term policy, other than a short-term reinsurance policy, on behalf of that insurer or L l o y d 's underwriter; d e t e r m i ne the w o r d i ng of a short-term policy; d e t e r m i ne p r e m i u ms u n d er a short-term policy; d e t e r m i ne the value of policy benefits u n d er a short-term policy; settle c l a i ms under a short-term policy. (b) (c) (d) (e) (2) A written a g r e e m e nt referred to in subsection (1) m u s t— (a) (b) (c) (d) set out which of the activities referred to in subsection (1) that other person may perform and the particular kinds of short-term policies in respect of w h i ch those activities m ay be p e r f o r m e d; set out the particular kinds of short-term policies w h i ch may be entered into, varied or r e n e w ed by that other person; state if that other person is authorised to d e t e r m i ne the w o r d i ng of the policies referred to in paragraph (a), and if authorised, the extent to which and the w o r d i ng may be d e t e r m i n e d; state if that other person in is authorised respect of the policies referred to in p a r a g r a ph (a), a nd if authorised, the gross p r e m i u ms or the basis for the calculation of gross p r e m i u ms that m ay be determined, and the extent to w h i ch and the c i r c u m s t a n c es under which the p r e m i u ms m ay be d e t e r m i n e d; the c i r c u m s t a n c es under which to d e t e r m i ne p r e m i u ms Act No. 27, 2008 INSURANCE LAWS AMENDMENT ACT, 2008 (e) (f) (g) (h) if that other person state if that other person is authorised to d e t e r m i ne the value of policy benefits, and if authorised, the m a x i m um value of the policy benefits that m ay be determined under each kind of short-term policy referred to in paragraph (a), and the extent to which and the c i r c u m s t a n c es u n d er which the benefits m ay be d e t e r m i n e d; the is authorised state policies referred to in p a r a g r a ph (a), and if authorised, the extent to which and the c i r c u m s t a n c es u n d er which the c l a i ms may be settled; state the basis on w h i ch that other person will be r e m u n e r a t ed for services rendered in terms of p a r a g r a p hs (b) to (f), w h i ch basis m u st be consistent with any r e q u i r e m e n t s, limitations or p r o h i b i t i o ns as m ay be prescribed by regulation; oblige that other person t o— to settle claims under (i) disclose to policyholders of policies referred to in p a r a g r a ph (a)~ (aa) the n a me of the relevant short-term insurer or, in the case of L l o y d 's underwriters, the term 'certain u n d e r w r i t e rs at L l o y d ' s ', and the fact that that other person is acting in terms of an a g r e e m e nt c o n t e m p l a t ed in this section; and (bb) any r e m u n e r a t i on p a y a b le to that person in t e r ms of an agreement c o n t e m p l a t ed in this section; (ii) (iii) include the n a me of the short-term insurer or, in the case of L l o y d 's underwriters u n d e r w r i t i ng the short-term policy, the 'certain underwriters at L l o y d ' s' in any advertisement, term brochure or similar c o m m u n i c a t i on which the short-term policy referred to in p a r a g r a ph (a); relates to k e ep and maintain proper b o o ks of account and other records in respect of the policies referred to in p a r a g r a ph (a) and allow its statutory the short-term actuary, if appointed, and its auditors full and unfettered access to those books of account and r e c o r d s; and insurer or L l o y d 's underwriter, (iv) m a ke available to the short-term insurer or L l o y d 's under­ writer, its statutory actuary, if appointed, and its auditors the policies referred information relating thereto, including the n a m e s, identity n u m b e rs and contact details of p o l i c y h o l d e r s, insured persons and benefi­ ciaries, upon request; to in paragraph (a) and any ((') (j) prohibit that other person to d e l e g a t e, assign or subcontract any of the functions referred to in p a r a g r a p hs (b) to (f) to a n o t h er person; state the c i r c u m s t a n c es under which the a g r e e m e nt will lapse or m ay be terminated, and the necessary steps that must be taken to ensure the effective and efficient termination of the a g r e e m e nt taking into account the interests of policyholders. (3) A written agreement referred to in subsection (1), subject to any r e q u i r e m e n t s, limitations or prohibitions as m ay be prescribed by regula­ t i o n— (a) m ay not authorise that other person to add an a m o u nt to any gross p r e m i um referred to in subsection (2)(d): (b) may not authorise that other person to deduct any a m o u nt 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 a g r e e m e nt c o n t e m p l a t ed in subsection (1) with a short-term insurer or L l o y d 's underwriter m a y— (a) r e n d er the services c o n t e m p l a t ed in subsection (1)(a) to (e) in respect of any kind of short-term policy issued by that short-term insurer or Act No. 27, 2008 INSURANCE LAWS AMENDMENT ACT. 2008 L l o y d 's u n d e r w r i t er identified in the agreement only in a c c o r d a n ce with any r e q u i r e m e n t s, limitations or prohibitions as m ay be pre­ scribed by regulation; and not render any of the services c o n t e m p l a t ed in subsection (l)(a) to (e) in respect of any kind of short-term policy issued by that short-term insurer or L l o y d 's underwriter not identified in the a g r e e m e n t. (b) (5) Despite any term in an a g r e e m e nt in subsection (1), the short-term insurer or L l o y d 's u n d e r- the contrary contained to contemplated writer that entered into the a g r e e m e nt r e m a i n s— (a) (b) responsible for c o m p l i a n ce with this A c t; liable for any claims relating to policies included in the a g r e e m e n t, including any claims that m ay arise because of the failure of that other person to c o m p ly with the a g r e e m e n t; and the o w n er of any the policies contemplated in the a g r e e m e n t, which must, upon termination of the a g r e e m e n t, be returned to the short-term insurer or L l o y d 's underwriter. information and d o c u m e n t a t i on relating to (c) (6) A ny party to a written a g r e e m e nt referred to in subsection (1) m u st on request m a ke a c o py of that agreement available to the R e g i s t r a r . ". A m e n d m e nt of s e c t i on 57 of A ct 53 of 1998

47. Section 57 of the Short-term I n s u r a n ce Act, 1998, is hereby a m e n d ed by the substitution for subsection (5) of the following subsection: " ( 5) T he L l o y d 's representative shall comply, with the necessary c h a n g e s— (a} with section 19( 1), (2), (3) and [(4)] (5) in respect of the L l o y d 's Trusts as if he or she were a short-term insurer; and (b) with section 19A in respect of the L l o y d 's Trusts as if he or she w e re a short-term insurer.". A m e n d m e nt of s e c t i on 63 of A ct 53 of 1 9 98 4 8. Section 63 of the Short-term Insurance Act, 1998, is hereby a m e n d ed by the substitution for subsection (4) of the following subsection: " ( 4) (a) Section 19(5), (6), [ a n d] (7), (8) and (9) shall apply with the necessary c h a n g es in relation to the auditor a p p o i n t ed by virtue of section 5 7 ( 5 ) ( a] in respect of each of the L l o y d 's Trusts as if the reference to section 28( 1) in section 19(5)(c) were a reference to section 60 and the reference to section 35 in section 19(7)(a) were a reference to section 58(1) and paragraph 7 of Schedule 3. (b) Section 19A shall apply with the necessary c h a n g es the statutory actuary a p p o i n t ed by virtue of section 57(5)(6) in respect of each of the L l o y d 's Trusts as if the reference to section 28( 1) in section 19A(5)(b)(i) w e re a reference to section 60 and the reference to section 35 in section 19A(7)(a) w e re a reference to section 58(1) and p a r a g r a ph 7 of S c h e d u le 3 . ". in relation to A m e n d m e nt of s e c t i on 64 of A ct 53 of 1 9 98 4 9. Section 64 of the Short-term Insurance Act, 1998, is hereby a m e n d e d— (a) by the substitution in subsection (1) for paragraphs (a) and (b) of the following p a r a g r a p h s: "(a) c o n t r a v e n es or fails to c o m p ly with a provision of a notice, directive or r e q u e st referred to in section 4 ( 3 ), (4) or (5)(a)(i), 21(2) or 2 6 ( 2 ); c o n t r a v e n es or fails to c o m p ly with a provision of section 8( 1 )(a) or (b) or (5), 16(2), 22(1), 27(1), 4 3 ( 1 ), 4 4, 4 5, 4 6, 48 or 4 8 A ; ". (b) Act No. 27, 2008 INSURANCE LAWS AMENDMENT ACT, 2008 (b) by the substitution for subsection (2) of the following subsection: " ( 2) A person, other than a short-term insurer, w ho c o n t r a v e n es or fails to c o m p ly with a provision of section 7(1 )(a) or (b), 8(2). 19A(5)(b), 25(1) or (2) or 4 9 ( 4) or (6), shall be guilty of an offence and liable on conviction to a fine not e x c e e d i ng Rl 0 00 0 00 or to i m p r i s o n m e nt for a period not e x c e e d i ng 10 years or to both such fine and such m e n t . ". imprison­ A m e n d m e nt of section 65 of A ct 53 of 1998 5 0. Section 65 of the Short-term I n s u r a n ce Act, 1998, is h e r e by a m e n d ed by the substitution in subsection (1) for p a r a g r a p hs (a) and (b) of the following p a r a g r a p h s: " ( a) c o n t r a v e n es or fails to c o m p ly with a provision of a notice, directive or request (b) referred to in section 4(2), (3) or (4), 2 1 ( 1) or (2), 26(1), 34(2)(a) c o n t r a v e n es or fails to c o m p ly with a provision of section 16(1), 17, 18, 19A(5)(b), 22( 1) or (2), 24( 1), 35( 1), 43( 1), 4 4. 4 5, 4 6, 4 7. 48 or 4 8 A ; ". or 35(2); A m e n d m e nt of s e c t i on 69 of A ct 53 of 1998 5 1. Section 69 of the Short-term Insurance Act, 1998, is hereby a m e n d ed b y— the insertion after subsection (2) of the following subsection: (a) " ( 2 A) No e x e m p t i on granted under any l aw u n d er which a short-term insurer is incorporated or registered shall constitute an e x e m p t i on from the provisions of this A c t . "; and (b) the substitution for subsection (3) of the following subsection: " ( 3) T he financial and presented P r a c t i c e] c o m p a n y . ". financial statements of a short-term insurer, other than the statements d r a wn up by the statutory actuary, shall be d r a wn up in a c c o r d a n ce with [ G e n e r a l ly A c c e p t ed A c c o u n t i ng to a widely-held reporting standards applicable financial A m e n d m e nt of s e c t i on 70 of A ct 53 of 1998 5 2. Section 70 of the Short-term Insurance Act, 1998, is hereby a m e n d e d— (a) (b) by the deletion in subsection (1) of p a r a g r a ph (d); by the p a r a g r a p h: insertion after p a r a g r a ph (g) in subsection (1) of the following " ( g A) prescribing in respect of section 4 8 A, r e q u i r e m e n t s, limitations or prohibitions relating t o— (i) the a g r e e m e n ts c o n t e m p l a t ed in section 4 8 A ( 1 ); (ii) any additions to gross p r e m i u ms or d e d u c t i o ns from claims in respect of policies referred to in the a g r e e m e n ts c o n t e m p l a t ed in section 4 8 A ( 1 ); (iii) any consideration that may be offered or p r o v i d ed from, by or on behalf of a short-term insurer or L l o y d 's u n d e r w r i t er to a person that enters into an a g r e e m e nt c o n t e m p l a t ed in section 4 8 A ( 1) with a short-term insurer or L l o y d 's underwriter; (iv) any participation or sharing in the profits attributable to the policies referred to in the a g r e e m e n ts c o n t e m p l a t ed in section 4 8 A ( 1 ); and (v) the c i r c u m s t a n c es under which a person w ho has entered into an a g r e e m e nt c o n t e m p l a t ed render services in respect of a policy not referred to that person by the relevant i n d e p e n d e nt i n t e r m e d i a r y . "; insurer, L l o y d 's underwriter or an in section 4 8 A ( 1) m ay (c) by the substitution for subsection (2) of the following subsection: " ( 2) R e g u l a t i o ns m a de u n d er this section m a y— (a) differentiate between different k i n ds of insurers, policies, a g r e e­ m e n ts or contracts, which may, for the p u r p o s es of this section, be defined either in relation to categories, types or k i n ds of insurers or policies or in any other m a n n e r; Act No. 27, 2008 INSURANCE LAWS AMENDMENT ACT. 2008 (b) (c) be limited in its application to a particular kind of insurer, policy, a g r e e m e nt or contract, w h i ch may, for the p u r p o s es of this section, be defined either in relation to categories, types or kinds of insurers or policies or in any other m a n n e r; and prescribe a fine or a period of i m p r i s o n m e nt not e x c e e d i ng one year for a contravention of or a failure to c o m p ly with a provision of the r e g u l a t i o n s . "; and (d) by the insertion after subsection (2) of the following subsections: " ( 2 A ) ( a) T he Minister, despite ' b u s i n e ss of a medical s c h e m e' in section 9(1) of the M e d i c al S c h e m es Act, m ay m a ke regulations identifying a kind, type or category of contract as an accident and health policy. the definition of (b) Regulations under p a r a g r a ph (i) must be m a de o n l y— (a)— in consultation with the Minister of Health; (aa) (bb) after consultation b e t w e en the National Treasury, the (cc) Registrar and the Registrar of M e d i c al S c h e m es e s t a b­ lished under the Medical S c h e m es Act; a nd after having regard to the objectives and p u r p o se of the Medical S c h e m es Act, including the following principles entrenched t h e r e i n— (A) c o m m u n i ty rating; (B) open e n r o l m e n t; and (C) c r o s s - s u b s i d i s a t i on w i t h in m e d i c al s c h e m e s; a nd (ii) must provide for a short-term insurer or L l o y d 's u n d e r w r i t er to submit specified information on any p r o d u ct within a kind, type or category of contract referred to in p a r a g r a ph (a) to the Registrar and the Registrar of M e d i c al S c h e m es within any specified timeframes; (iii) may provide for matters relating to the design and m a r k e t i ng of any product within a kind, type or category of contract referred to in paragraph (a). (c) W h e re the Minister has m a de regulations referred to in p a r a g r a ph (a), the kind, type or category of contract identified as a health policy in the regulations, is subject to this Act a nd not the M e d i c al S c h e m es Act. the (2B) Before regulations in t e r ms of this Act are p r o m u l g a t e d, Minister must publish the draft regulations in the Government Gazette for public c o m m e nt and submit the regulations to P a r l i a m e n t, while it is in session, for parliamentary scrutiny at least o ne m o n th before their p r o m u l g a t i o n . ". A m e n d m e nt of S c h e d u le 1 to Act 53 of 1998, as a m e n d ed by section 36 of A ct 17 of 2 0 03 5 3. Schedule 1 to the Short-term Insurance Act, 1998, is hereby a m e n d e d— (a) by the substitution in p a r a g r a ph 1 for the definition of " d e r i v a t i v e s" of the following definition: " ' d e r i v a t i v e s' m e a n s— (a) an option contract [as c o n t e m p l a t ed in the definition of "securi­ t i e s" in s e c t i on 1 of t he S t o ck E x c h a n g es C o n t r ol Act, 1985 ( A ct N o. 1 of 1985)]; a futures contract [and an o p t i on c o n t r a ct as defined in s e c t i on 1 of the Financial M a r k e ts Control A c t, 1 9 89 ( A ct N o. 55 of 1989)]; and a contract for differences;"; (b) (c) Act No. 27, 2008 INSURANCE LAWS AMENDMENT ACT, 2008 (b) by the insertion in paragraph 1 after the definition of " d e r i v a t i v e s" of the following definition: " 'futures c o n t r a c t' m e a ns a standardised contract the effect of which is t h a t— (a) a person agrees to deliver to or receive from a n o t h er p e r s on a certain quantity of corporeal or incorporeal things before or on a future date at a pre-arranged price; or an a m o u nt of m o n ey will be paid to or received from a n o t h er person before or on a future date according to w h e t h er the p r e - a r r a n g ed value or price of— C b) (i) (ii) (iii) (iv) (v) an asset; an index as a m e a ns of indicator that reflects c h a n g es in the value of one or m o re g r o u ps of shares or securities on o ne or more e x c h a n g e s; c u r r e n c y; rate of interest; or any other factor, is higher or lower before or on that future date than the p r e - a r r a n g ed value or p r i c e ; "; (c) in p a r a g r a ph 1 for the definition of " m a r g i n" of by the substitution following definition: " ' m a r g i n ', i t em 16(5)(a)(aa) of the Table to this S c h e d u l e] outside the R e p u b l i c, m e a ns the the margin as defined appropriate authority of the country [state] in w h i ch the stock e x c h a n ge is situated or which is required by that stock e x c h a n g e ; "; issued or a p p r o v ed by to a stock e x c h a n ge in the regulations [referred to in relation the in (d) by the substitution in p a r a g r a ph 1 for the definition of " m a r g in d e p o s i t" of the following definition: " ' m a r g in d e p o s i t' m e a ns a margin with S A F EX and a stock e x c h a n ge [referred to in i t em 16(5)(a)(aa) of t he Table to this S c h e d u l e] outside the R e p u b l i c ; "; (e) the substitution by S A F E X" of the following definition: in p a r a g r a ph 1 for the definition of " m a r g in w i th " ' m a r g in w i th S A F E X' m e a ns the margin as defined in the rules of the South African Futures E x c h a n ge referred the F i n a n c i al M a r k e ts C o n t r ol A c t, 1989] section 18 of the Securities Services Act, 2 0 04 (Act N o. 36 of 2 0 0 4 ) ; "; in [section 17 of to (f) by the insertion in p a r a g r a ph 1 after the definition of " n . e . s ." of the following definition: (b) " 'option c o n t r a c t' m e a ns a standardised contract the effect of w h i ch is that a person acquires the o p t i o n— (a) to buy from or to sell to another person a certain quantity of corporeal or incorporeal things before or on a future date at a pre-arranged price; or that an a m o u nt of m o n ey will be paid to or received from a n o t h er person before or on a future date a c c o r d i ng the pre-arranged value or price of— (aa) (bb) an asset; an index as a m e a ns of indicator that reflects c h a n g es in the value of o ne or more g r o u ps of shares or securities on one or m o re e x c h a n g e s; currency; rate of interest; or any other factor, (cc) (dd) (ee) is higher or l o w er before or on that future date than the p r e - a r r a n g ed value or p r i c e ; "; to w h e t h er Act No. 27, 2008 INSURANCE LAWS AMENDMENT ACT. 2008 (g) by the substitution in the Table for item 2 of the following item: in an account with, or a deposit, *'2. A credit balance including a negotiable deposit and a bill accepted by, or a p r o m i s s o ry note issued by, an institution [finally] registered u n d er the B a n ks A c t. 1990 (Act N o. 94 of 1990), or the M u t u al B a n ks Act, 1993 (Act N o. 124 of 1 9 9 3 ) . "; (h) by the substitution in the Table for item 7 of the following item: "7. Securities issued by, and loans m a de to, the Local Authorities L o a ns F u nd Board under the repealed Local Authorities L o a ns Fund A c t. 1984 (Act No. 67 of 1 9 8 4 ) . "; and (i) by the substitution in the Table for item 17 of the following item: "17. [Units] Participatory interests in a [unit trust] collective invest­ ment s c h e me registered in terms of the [Unit Trusts C o n t r ol A c t, 1981 (Act No. 54 of 1981)] Collective I n v e s t m e nt S c h e m es Control A c t. 2 0 02 (Act N o. 45 of 2 0 0 2 ) . ". A m e n d m e nt of S c h e d u le 2 to A ct 53 of 1998, as a m e n d ed by s e c t i on 37 of A ct 17 of 2 0 03 5 4. S c h e d u le 2 to the Short-term Insurance Act, 1998, is hereby a m e n d e d— (a) by the substitution for paragraph 2 in Part I of the following p a r a g r a p h: " C a l c u l a t i on of values

2. T he value o f [— (a) (b) (c) (d) (e) (f) (g) a K r u g e r r a nd c o in referred to in item 1, shall be t he price w h i ch the S o u th African R e s e r ve B a nk is p r e p a r ed to p ay for it on the d a te as at w h i ch its v a l ue is calculated; a credit b a l a n c e, deposit or m a r g in deposit referred to in i t e ms 2, 3 , 1 0 ,1 6 ( 5 ) ( b) a nd (d) and 18, shall be the a m o u nt thereof; an asset referred to in i t em 4 , 5 , 6 , 7 , 8 , 9 , 1 0 , 1 1 , 1 2 , 13 or 16(1), (2), (3), (4) or (5)(a) or (c) w h i ch is listed on a stock e x c h a n ge a nd for w h i ch a closing price w as q u o t ed on t h at stock e x c h a n ge on the d a te as at w h i ch the value is d e t e r m i n e d, shall be t he c l o s i ng price or t he closing price last so q u o t e d; an asset referred to in i t e ms 16(5)(c) a nd 17, shall be t he p r i ce at w h i ch the unit w o u ld have b e en r e p u r c h a s ed by the unit trust is m a n a g e m e nt c o m p a ny on the d a te as at w h i ch t he v a l ue c a l c u l a t e d, a nd in the case of a p r o p e r ty unit trust, t he m a r k et value, and if it is listed on a stock e x c h a n ge a nd for w h i ch a closing price w as q u o t ed on that stock e x c h a n ge on the d a te as at w h i ch the value is d e t e r m i n e d, the closing price, or t he closing p r i ce last so q u o t e d; a futures c o n t r a ct referred to in items 16(5)(d) a nd 1 8, shall be d e t e r m i n ed by t he m a r k - t o - m a r k et as defined in t he rules of the S o u th African F u t u r es E x c h a n ge referred to in s e c t i on 17 of the Financial M a r k e ts Control A c t, 1 9 89 (Act N o. 55 of 1 9 8 9 ); an o p t i on c o n t r a ct referred to in i t e ms 16(5)(d) a nd 18 for w h i ch a price w as q u o t ed on a stock e x c h a n ge on t he d a te on w h i ch the v a l ue is c a l c u l a t e d, shall be that q u o t ed p r i c e; an asset referred to in item 2 1, shall be the a m o u nt of p r e m i u ms l e s s— (i) the a m o u nt or e s t i m a t ed a m o u nt of a ny c o m m i s s i on w h i ch the s h o r t - t e rm insurer o w es or for w h i ch it is likely to b e c o me liable in c o n n e c t i on w i th the p r e m i u m s; a p r o v i s i on of 7,5 per cent of t h at a m o u n t, to c o v er the risk of loss arising f r om n o n - r e c e i pt by t he i n s u r er of a ny p r e m i u m s; (ii) Act No. 27, 2008 INSURANCE LAWS AMENDMENT ACT. 2008 (h) an asset referred to in item 1 4 , 1 5 , 19 or 20(b) or (c), or an asset not o t h e r w i se specified in this p a r a g r a p h, shall be an a m o u nt not e x c e e d i ng that w h i ch c o u ld h a ve been o b t a i n ed on the sale of the asset b e t w e en a willing seller a nd a willing buyer, a c t i ng at a r m 's l e n g th a nd in g o od faith, as e s t i m a t ed by the i n s u r e r; (i) (j) an asset referred to in item 2 0 ( a ), shall be the a m o u nt w h i ch w o u ld be p a y a b le to t he p o l i c y h o l d er u p on the full s u r r e n d er of the policy on t he d ay on w h i ch t he value is c a l c u l a t e d; a derivative not m e n t i o n ed in s u b p a r a g r a ph (e) or (f) shall be c a l c u l a t ed as d e t e r m i n ed by the R e g i s t r ar f r om t i me to time.] assets, liabilities and capital a d e q u a cy r e q u i r e m e nt shall be d e e m ed to h a ve been calculated in terms of this S c h e d u le it" the r e q u i r e m e n ts set out in this S c h e d u le and the r e q u i r e m e n ts prescribed by the Registrar h a ve been c o m p l i ed with in m a k i ng the c a l c u l a t i o n s . "; (b) by the substitution for p a r a g r a ph 3 in Part I of the following p a r a g r a p h: ' [ S a v i n g s] R e g i s t r ar m ay reject certain v a l u es if 3. [(1)] N o t w i t h s t a n d i ng [ p a r a g r a p hs 1 a n d] p a r a g r a ph 2, the Registrar is not satisfied that the value of an asset, a liability or capital r e q u i r e m e n t [, w h e n] calculated in [ a c c o r d a n ce w i th p a r a g r a ph 2, d o es not reflect] terms of this S c h e d u le reflects a p r o p er value the Registrar m a y— (a) direct the insurer to appoint a n o t h er person, at the cost of the insurer, to place a proper value on that asset or liability or capital r e q u i r e m e n t; or [the R e g i s t r ar m a y] direct the short-term the value in another m a n n er which the Registrar d e t e r m i n es and which will p r o d u ce a proper value [for that asset]. insurer to calculate (b) [(2) An asset in respect of w h i ch no basis of v a l u a t i on is p r e s c r i b ed in in a c c o r d a n ce w i th G e n e r a l ly p a r a g r a p hs 1 a nd 2 shall be v a l u ed A c c e p t ed A c c o u n t i ng P r a c t i c e ] "; (c) (d) by the deletion of p a r a g r a p hs 4, 5 and 6 in Part II; and by the substitution for s u b p a r a g r a ph (1) of p a r a g r a ph 7 in Part II of following subparagraph: the insurer, other than " ( 1) For the purposes of section 2 9, the value of the liabilities of a short-term those prescribed by the Registrar and referred to in [ p a r a g r a p hs 5 a nd 6] p a r a g r a ph 2, shall be d e t e r m i n ed in a c c o r d a n ce with [ G e n e r a l ly A c c e p t ed A c c o u n t i ng P r a c t i c e] financial reporting standards applicable to w i d e l y - h e ld c o m p a n i e s . ". A m e n d m e nt of S c h e d u le 3 to A ct 53 of 1998 as a m e n d ed by section 38 of A ct 17 of 2 0 03 5 5. S c h e d u le 3 to the Short-term Insurance Act, 1998, is hereby a m e n d e d— (a) by the substitution for p a r a g r a ph 4 of the following paragraph: " A m o u nt of security 4. [(1)] T he value of the m i n i m um a m o u nt of the security to be provided by or on behalf of a L l o y d 's underwriter shall be d e e m ed to h a ve been this calculated S c h e d u le and the r e q u i r e m e n ts prescribed by the Registrar h a ve been c o m p l i ed with in m a k i ng the calculations, [is an a m o u nt e q u i v a l e nt t o— the e s t i m a t ed a m o u nt p a y a b le by the u n d e r w r i t er in r e s p e ct of (a) in terms of this S c h e d u le if the r e q u i r e m e n ts set out in c l a i ms w h i ch h a ve b e en i n c u r r ed u n d er S o u th A f r i c an s h o r t - t e rm i n s u r a n ce policies a nd reported b ut n ot yet p a i d; less Act No. 27, 2008 INSURANCE LAWS AMENDMENT ACT, 2008 (b) an a l l o w a n ce in respect of r e i n s u r a n ce c o v er h e l d, w h i ch a l l o w­ a n ce shall be a p e r c e n t a ge of the a m o u nt c o n t e m p l a t ed in i t em (a), c a l c u l a t ed by the f o r m u l a— x 100 A-B A in w h i ch f o r m u l a— A i n c o me r e c e i v ed by all L l o y d 's r e p r e s e n ts the p r e m i um u n d e r w r i t e rs u n d er all s h o r t - t e rm i n s u r a n ce policies u n d e r­ w r i t t en by t h em less b r o k e r a ge a nd c o m m i s s i o n; a nd r e p r e s e n ts the a m o u nt of A less all p r e m i u ms p a id r e i n s u r a n ce c o v er h e ld by those u n d e r w r i t e r s, for B (c) d u r i n g, in the c a se of both A a nd B, t he latest c a l e n d ar y e ar p r i or to t he c a l c u l a t i on as r e p o r t ed in t he m o st r e c e nt p u b l i s h ed G l o b al Results of L l o y d 's a v a i l a b le at the t i me a nd a p p r o v ed by the R e g i s t r a r; plus a p r o v i s i on for c l a i ms incurred b ut not y et r e p o r t ed e q u al to 7% of the total net a m o u nt of the p r e m i u ms u n d er S o u th A f r i c an i n s u r a n ce policies received by or on b e h a lf of the s h o r t - t e rm u n d e r w r i t er at L l o y d 's Policy S i g n i ng Office d u r i ng the y e ar e n d ed on t he last d ay of t he q u a r t er c o n c e r n e d. (2) F or the p u r p o se of i t em (c) of s u b p a r a g r a ph (1) ' n et a m o u n t' m e a ns the net a m o u nt after d e d u c t i on of the a g g r e g a te of— (a) in the s a me p e r c e n t a ge of s u ch total p r e m i u ms as t he p e r c e n t a ge c o n t e m p l a t ed (1), in r e s p e ct of i t em (b) of s u b p a r a g r a ph r e i n s u r a n ce c o v er h e l d; the a g g r e g a te of t he refunds m a de by or on b e h a lf of the u n d e r w r i t er d u r i ng t he y e ar in respect of p r e m i u ms u n d er S o u th A f r i c an s h o r t - t e rm i n s u r a n ce policies; b r o k e r a ge and c o m m i s s i o ns c e r n e d; a nd a ny tax p a y a b le on t he p r e m i u ms c o n c e r n e d, o t h er t h an t a x es p a y a b le on net i n c o m e: in respect of t he p r e m i u ms c o n­ (b) (c) (d) P r o v i d ed that o n ly p r e m i u ms r e c e i v ed a nd refunds m a de on or after the d a te of c o m m e n c e m e nt of s e c t i on 60 shall be t a k en into a c c o u nt for that p u r p o s e . ] "; by the substitution s u b p a r a g r a p h: in p a r a g r a ph 6 for s u b p a r a g r a ph (2) of the following (b) " ( 2) Subject to section 63(6), the a g g r e g a te value of the assets referred to in s u b p a r a g r a ph (1) shall, in respect of each particular kind or category specified by regulation, w h en e x p r e s s ed as a percentage of the a g g r e g a te in to be held m i n i m um a m o u nt a c c o r d a n ce with this S c h e d u le [2], not e x c e ed the p e r c e n t a ge specified by regulation in relation to that kind or category of a s s e t . "; and required trust at t i me that the in (c) by the substitution s u b p a r a g r a p h: in p a r a g r a ph 6 for s u b p a r a g r a ph (4) of the following " ( 4) For the p u r p o s es of p a r a g r a ph 5 and s u b p a r a g r a p hs (1) and (2) assets shall be [valued to have been calculated in t e r ms of this Schedule [3] if the r e q u i r e m e n ts set out in this S c h e d u le and the r e q u i r e m e n ts prescribed by the Registrar h a ve been c o m p l i ed with in m a k i ng the c a l c u l a t i o n s . ". in a c c o r d a n ce w i t h] d e e m ed Act No. 27, 2008 INSURANCE LAWS AMENDMENT ACT, 2008 A m e n d m e nt of A r r a n g e m e nt of Sections of A ct 53 of 1 9 9 8, as a m e n d ed by section 24 of A ct 17 of 2 0 03

56. T he A r r a n g e m e nt of Sections of the Short-term I n s u r a n ce Act. 1998, is hereby a m e n d e d— (a) by the insertion after item 19 of the following item: " 1 9 A. Statutory a c t u a r y "; (b) by the substitution for the heading of item 20 of the following h e a d i n g: " A p p o i n t m e nt of auditor or statutory actuary by R e g i s t r a r "; (c) by the substitution in Part VII for item 48 of the following item: "48. [ I n t e r m e d i a r i e s: r e m u n e r a t i on a nd b i n d er a g r e e m e n t s] I n d e­ pendent intermediaries: r e m u n e r a t i o n "; and by the insertion in Part V II after item 48 of the following item: (d) "48A. Binder a g r e e m e n t s ". S h o rt title a nd c o m m e n c e m e nt 57. (1) T h is Act is called the Insurance L a ws A m e n d m e nt Act, 2 0 0 8. and lakes effect on a date d e t e r m i n ed by the Minister by notice in the Gazette, (2) Different dates may in terms of subsection (1) be d e t e r m i n ed for different provisions of this Act.