South Africa is very much part of the global financial world, and also one of more than 200 members of the International Association of Insurance Supervisors (IAIS).
The mission of the International Association of Insurance Supervisors (IAIS) is to:
- promote effective and globally consistent regulation and supervision of the insurance industry in order to develop and maintain fair, safe and stable insurance markets for the benefit and protection of policyholders; and
- Contribute to global financial stability.
The IAIS has drawn up 26 “Insurance Core Principles” (ICPs) which form a globally accepted framework for the regulation and supervision of the insurance sector. These principles were revised in 2011, largely as a result of lessons learned in the financial crisis.
These international developments will be introduced to South Africa in the guise of the Twin Peaks model of supervision which will change the focus to a more functional approach, rather than the current one which regulates “industry silos‟.
Market conduct supervision will be the responsibility of the “new FSB‟, while prudential supervision and financial stability will fall under the Reserve Bank.
As a result of the financial crisis in 2008, the proposed Twin Peaks approach was announced in the 2011 budget speech. In the same year, a steering committee comprising of delegates from the FSB, Reserve Bank and National Treasury was formed. It drew up a road map for implementation, which is scheduled to take place in 2014.
In terms of market conduct, there will be three main thrusts:
- Business conduct, for which Treating Customers Fairly will form an overarching framework
- Market integrity and efficiency, which will include Key Information Documents (KIDs) as part of the TCF requirements on disclosure and
Consumer education, where the focus will shift from “promoting” to “providing