DEON VAN STADEN FSB SOUTH AFRICA INTRODUCTION Small

DEON VAN STADEN FSB SOUTH AFRICA

INTRODUCTION Small insurers’ view on the difficulties they face in complying with regulatory requirements in developing countries. • • • My presentation will deal with: Importance of products Providers of these products Regulatory regime Cost of compliance Recommendation

IMPORTANCE OF PRODUCTS • Small insurer vs large insurer • Need for funeral, credit life and health policies • Important for sustainable economic growth

THE PROVIDERS OF THESE PRODUCTS • Mutual benefit societies • Funeral insurers • Illegal operators

REGULATORY REGIME • Legislative Framework – Friendly societies (non-profitable) – Strict insurance legislation

COST OF COMPLIANCE • • Cost of capital Systems Suitably qualified staff Audit and actuarial fees Levies/taxes Statutory returns Reserving and investment requirements

RECOMMENDATIONS • Not for total deregulated environment • A regulatory framework that is less stringent to comply with • Self-regulatory regime • Self-regulatory authority powers – Act swiftly – Penalties – Name and shame

RECOMMENDATIONS Cont. • Reporting, entry and capital requirements – Entry – Capital – Reporting • • Limited benefits Dispute resolution mechanism Tax incentive Consumer education