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Summary RSK3701 TEXTBOOK C1
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Summary of 15 pages for the course RSK3701 - Risk Financing and Short Term Insurance at Unisa (RSK3701 TEXTBOOK C1)
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L ON G TERM IN D US TR Y B O DIES AF F EC TIN G THELIFE I N TE RM EDI AR Y C H AP TE R 1
CHAPTER 1
LONG TERM INDUSTRY
BODIES AFFECTING THE
LIFE INTERMEDIARY
Learning Outcomes
When you have completed this chapter you will be able to
list the industry bodies that affect the life intermediary;
describe, in general terms, how the industry bodies that affect the
life intermediary are structured;
explain the main purpose of each of the industry bodies that affect
the life intermediary;
give a detailed description of the personal achievement goals that
the life intermediary can strive towards.
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, L ON G TERM IN D US TR Y B O DIES AF F EC TIN G THE
LIFE I N TE RM EDI AR Y C H AP TE R 1
One of the important things that have come out of the introduction of two separate Acts for
long term (life) and short term insurance is that we are no longer to differentiate between the
terms insurance and assurance.
In future all insurance business, whether it be life and pensions business (long term), or one
of the short term classes of business like fire, accident, theft, should use the name insurance,
using long term or short term where differentiation is needed.
1.1 THE FINANCIAL SERVICES BOARD
The Financial Services Board (FSB) is an independent body that supervises institutions and
services in terms of 13 Parliamentary Acts, which entrust regulatory functions to the
Registrar of Long and Short term Insurance, Friendly Societies, Pension Funds, Unit Trust
Companies, Stock Exchanges and Financial Markets in South Africa. These functions rest in
the office of the Executive Officer, acting with other members of the executive and heads of
the various departments.
The FSB is also responsible for the financial supervision of the Road Accident Fund. The
FSB is controlled by a board appointed by the State President and has a Chief Executive
Officer, who acts as Registrar, his deputies and the chief actuary. The Board reports to the
Minister of Finance.
The Executive Officer has wide regulatory powers. Regulatory actions include the
cancellation of authorisation to supply financial services. He has formal powers of
investigation with criminal sanctions in the event of obstruction, and can apply to court for an
interdict, or the curatorship of financial institutions, if necessary. He can, in certain
circumstances, also apply for the winding up or placing under judicial management of certain
financial institutions, such as insurers and pension funds. The FSB must also be informed of
any staff changes within the executive of insurance companies.
The FSB makes use of a policy board appointed by the Minister of Finance, which acts in an
advisory capacity. Provision is made for appeals against any decisions taken by the FSB
through a properly structured appeal process. The appeal process includes notification of the
appeal within 20 business days of the decision, accompanied by the required fee.
Legal practitioners may represent an aggrieved person(s) at the hearing before the three
person appeal board, but no appeals against appeal board decisions are allowed.
Another vital function delegated to the FSB by legislation is the licensing, administration and
control of all financial services providers in accordance with the terms and conditions of the
Financial Advisory and Intermediary Services (FAIS) Act. The FSB is paid by levies charged
to the financial institutions over which it exercises control. These levies are set by the FSB.
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