My message to members at the start of 2023 was to find inspiration from their purpose, that which is under their control. Given the uncertainty in South Africa and around the world, we need to stay positive and continue our efforts to expand the services of intermediaries to millions of people and businesses who depend on us for guidance and protection from the inevitable.
Looking inwards, we are very concerned about energy reliability and the threat of grid failure and the impact this will have on intermediaries and clients. According to the Quarterly Bulletin prepared by Business Unity South Africa (BUSA), the main reasons for poor GDP performance has been load shedding, with 100 days of load shedding being recorded since 14 September, as well as the 2022 April floods that disrupted logistics. We know that reinsurers and insurers have imposed exclusions on policies which will impact the client’s ability to rely on insurance to recover from these events.
The ability to recover from these events using insurance as a risk mitigation strategy is important to ensure the sustainability of the economy, however the industry is not equipped to provide capacity or protection for the inevitable. Therefore proposed solutions need to be taken to a higher level than the regulators.
On the regulatory front, the FIA is pleased to advise of the reduction in FSCA levies on intermediaries that will be imposed with respect to the implementation of the Twin Peaks Model, as well as the decision by the Financial Intelligence Centre (FIC) to continue to exclude non-life insurance from the list of accountable institutions. These outcomes have saved intermediaries millions of rands in additional compliance costs.
While we can certainly expect the tabling of the Conduct of Financial Institutions Bill (CoFI) in Parliament in 2023, there will still be a long road to full implementation, with the repeal of much existing legislation and the implementation of the new conduct standards.
In the anti-money-laundering and anti-terrorist financing space there has been a flood of legislative amendments, as well as guidance notes issued by the FIC because of the findings by the Financial Action Task Force (FATF) and we expect that work will continue in this regard over the course of the next few months, with the aim of avoiding a possible greylisting of South Africa.
The Omni Conduct of Business Returns (CBR) will also bring onerous reporting requirements to bear on intermediaries, and while the FIA has actively been engaging with the FSCA in this regard, we urge intermediaries to familiarise themselves with the requirements, participate in the pilot in 2023, and provide their input.
In the loop
As the FIA, we address regulatory and business matters which impact our members, and we provide detailed communications and summaries on a weekly basis. If intermediaries want to stay abreast of what is in store for them, our communications aim to provide them with all the tools they need to stay informed.
Legislation and regulation are factors that will impact the future of intermediaries, however there are other challenges such as risk management, talent management, skills transfer and data management, which we must address to safeguard the intermediary.
In collaboration with Inseta, the FIA has embarked on a project to support RE training, RE examinations and class of business training. The FIA will also be launching a communication app for members to allow members to connect and engage with one another on key industry trends and developments. We encourage intermediaries to join the FIA community.
The FIA remains fully committed to representing intermediaries on every platform to ensure stakeholders understand the significant contribution you make to clients, the economy, employment, and competition in the industry. It is also important that we collaborate as an industry to find sustainable solutions for our clients.
In March and April, the FIA will be launching our new strategy, as well as hosting our 15-year celebration, themed “15 Years of Shaping the Future for Intermediaries”. We want to encourage all intermediaries to attend our roadshow and participate.