The FIA has five executive portfolio committees – representing healthcare, employee benefits, short-term insurance, financial planning and membership – as well as a number of sub-committees, including training and education, transformation, and investments.
These committees consist of industry experts who meet quarterly to address legislative and regulatory matters governing their respective insurance disciplines, as well as any other issues or opportunities that can impact on our members.
Here are the latest reports from the chairs of the respective committees:
An improved prognosis in a new era - Butsi Tladi, Healthcare Committee chair
Recent developments and leadership changes in the country have changed our trajectory to one of hope and an improved prognosis. May this be the year in which we live up to our potential! It was this background that informed deliberations at a recent FIA Health Exco. Top of mind issues for this leadership team included:
2018 must be the year in which the country is put back on a sustainable path towards achieving our national desire for universal access to healthcare
The complexity of our healthcare makes advice critical and this valuable service should not be the preserve of those who can afford it. It needs to be accessible to all consumers
Transformation of the intermediary industry is a business imperative and it is those who fully embrace diversity who will build sustainable practices
The need to attract young talent and embrace technological advancement is key to our success
This team has achieved phenomenal outcomes for members. Highlights include successfully lobbying the Minister of Health to ensure that there is compliance with the obligation to review broker commissions annually. This means healthcare intermediaries can continue to add value to their clients in a sustainable way.
We have also been at the forefront in engagements with the Competition Commission Inquiry into Private Health, where we strongly emphasised the value of the intermediary in
the healthcare value chain. Our submission and presentation accentuated the competitive nature of the intermediary environment and the fact that regulated costs did not make this service a barrier to competition in private health.
Difficult times give us an opportunity to consider a different path and approach. The state of healthcare in SA at the moment requires us to be innovative and disruptive. Our overburdened and under-resourced public sector will not be fixed by a magic wand called National Health Insurance. Similarly, the inefficiencies of over-servicing and the exorbitant costs in our private health sector renders it unsustainable. South Africans are an amazing people with resilience and ability to overcome adversity. It was encouraging that the Minister of Finance heeded a call to retain tax credits on medical scheme contributions, which will continue to improve affordability of medical schemes.
What do we need to do to get back on track?
We know what we need to do, because we articulated it in our National Development Plan. We need to remove all distractions and be determined to drive the change we need in a co- ordinated and focused way.
Leadership: We need leadership that is relevant, focused, caring and concerned for the interests of all South Africans. When things go wrong, it is important to understand what went wrong and to fix it. Recent leadership changes in the country bode well for a prosperous future.
National consensus and social cohesion: The upsurge of reactionary tendencies in our society has set us back! We need to re-engage and embrace the knowledge that our strength lies in our diversity. The efforts by the FIA leadership to transform our industry are highly commendable. We look forward to even more output-driven activity going forward.
Nurture economic growth: We have to attack the plight of poverty and exclusion in favour of growth that is inclusive of all of us. When the living standards of marginalised communities rise, there will be more business opportunity and prosperity. The measure of our success has to be the lives of millions of people whose lives will improve through our actions.
It’s up to each and every one of us to ensure that this happens.
The Employee Benefits Committee is at your service! - Michael Morris, Employee Benefits Committee chair
The Employee Benefits Committee comprises members of the FIA who market employee benefits, both individual and corporate brokers. Each FIA region also sends a representative to our quarterly Exco meetings. The committee represents all FIA members in all aspects of employee benefits and it continually draws on the expertise of its corporate members.
Where necessary the members of the committee will engage with the Regulator regarding issues that affect EB broker or pension fund administration. The regulatory landscape is forever changing and constant engagement with the regulators is vital. Continual interaction takes place with the FSB, National Treasury, product providers and the Institute of Retirement Funds, of whom the FIA is a member. Strong relationships have been forged over time with all our stakeholders.
The committee supports the sustainability of the EB intermediary market and subscribes to consumer protection, market development and growth. The committee interacts regularly with FIA members and provides them with sound EB advice and assistance when required.
The committee works closely with the underwriting managers of the FIA members’ group scheme and was instrumental in negotiating an increase in free cover limits and reshaped scheme rates to ensure that we are competitive in the marketplace.
We are currently involved with the other FIA Excos with regard to proposed revisions to the FIA Code of Conduct, RDR, and Ombud reform proposals, to name but a few. This ensures a united and well- articulated response to the Regulator.
We are happy to report that with the revised regulations announced earlier this year, a statutory commission/fee increase was approved.
Employee benefit seminars and training sessions will again be held in most of the regions in 2018. CPD hours will continue to be allocated to participants.
The committee will continue to keep abreast of all market and regulatory developments and look after the interests of the corporate and individual broker.
Transformation is key for business sustainability - Errol Masinga, Transformation Committee chair
This year presents us with lots of opportunities to refocus our energies on positioning FIA as an organisation that embraces and promotes transformation as a business imperative. The primary goal of the FIA sub-board transformation committee is to create an environment where FIA members actively participate in addressing imbalances of the past while contributing positively to the transformation of the financial sector.
The amended Financial Sector Code (FS Code) was gazetted in December 2017 and comes into effect immediately, with no transition period. However, the entities with year-ends of up to 30 September 2017 would need to apply to the Department of Trade and Industry through the Financial Sector Charter Council to be exempt from being measured on the amended FS Code and be allowed to be measured on the 2012 FS Codes.
Transformation of the financial sector will be back on the agenda this year after successful conclusion of the parliamentary hearings in 2017. Nedlac will be hosting a Financial Sector summit in April 2018. This follows on from the Campaign Coalition consultative conference and the Charter Council round table discussion, which were held in March.
As the FIA sub-board transformation committee we have established working teams to initiate transformation projects linked to elements of the amended FS Code that would benefit members of the FIA.
The FIA will also roll out seminars and workshops to assist members in understanding the newly gazetted amended codes. We continue to engage with industry stakeholders to collaborate on matters that will benefit all players in the intermediary space.
We look forward to an exciting year ahead and hope to contribute to a transformed financial sector while enhancing our members’ business competitiveness, sustainability and growth.
Ensuring sustainable outcomes in the short-term industry - Barry Taylor, Short-term Committee chair
The Short-Term Executive Committee is drawn from members of the FIA and is representative of each region and short-term constituency. There
is a Technical Sub-committee of the Exco drawn from the member ranks of industry specialists, e.g property, motor, marine etc.
The committee meets quarterly and/or if a particular need arises. We represent members in all aspects of short-term insurance to ensure level playing fields in the marketplace, i.e. fair practices for all members regardless of size.
Our activities focus on analysis and negotiations around legislative and regulatory issues that affect the constituency. We also keep an eye on operational issues of concern to members, as well as technical short-term insurance nuances that arise from time to time.
A large amount of time has been spent in recent years creating and building relationships with all stakeholders, in particular National Treasury, the Financial Services Conduct Authority, insurers, market-related associations and all other avenues where we believe that influence and input may be required.
The lion’s share of our work has been concentrated around the ever-changing regulatory landscape. We have spent, and continue to spend much time and effort lobbying, debating and promoting the short-term intermediary model and value proposition to the regulators to ensure sustainable outcomes for members and our clients. Our philosophy has been one of creating the relationship and influencing the outcomes as opposed to the “big stick” approach.
Benefit to members
Whilst the benefit is not always apparent to all members, the outcomes of the regulatory interventions and deliberations have resulted in a far more balanced outcome than would have been the case had we not been involved. The association and the short-term intermediary model is now better known and understood by all stakeholders.
The committee will continue to keep abreast of market and regulatory developments and make sure that the members and the model are fully represented.
It is, however, incumbent on all short-term intermediaries to ensure that they understand their role in the value chain, which is to be knowledgeable, innovative and efficient, to embrace new-generation delivery mechanisms for solutions and service, and - above all else - to provide sound advice while embracing the principles of Treating Customers Fairly.
Mapping the way forward for the financial intermediary - Greg Setzkorn, Financial Planning Committee chair
A recent Financial Planning Committee meeting highlighted the need for all intermediaries to ensure they are conversant with both current and pending legislation in the financial services industry. This is to ensure that intermediaries are not only sustainable into the future, but also that the Financial Planning Committee is in line with the FIA’s functional strategy to recognise the contribution intermediaries make towards employment, representing consumers and supporting financial inclusion in South Africa.
The committee meets regularly to address legislative and regulatory matters governing the various aspects of financial planning, as well as operational issues that impact intermediaries. To this end Anton Swanepoel and Ronald King, who both served on the committee for many years, were nominated by the FIA to serve on the COFI workgroup. They will serve on the FSB’s Industry Expert Panel on the Conduct of Financial Institutions (COFI) Act. The COFI Act is a complete rewrite of the market conduct legislation into a single act.
Top of mind at present would appear to be the publication of the Fit and Proper Requirements for Financial Service Providers (BN 194 of 2017 refers) and the proposed amendments to the General Code of Conduct of the FAIS Act.
The amendments to the Fit and Proper Requirements 2017 will take effect on 1 April 2018 and include, inter alia:
Honest, integrity and good standing
Continuous professional development
Miscellaneous: Repeal of previous board notices on fit and proper requirements, savings, and transitional provisions
The Registrar of Financial Service Providers also published proposed amendments to the General Code of Conduct for Authorised FSPs and Representatives and the specific Code of Conduct for Authorised FSPs and Representatives conducting Short-Term Deposits Business in November 2017. Comments on the proposed amendments had to be submitted by 28 February 2018.
Against the background of the Treating Customers Fairly approach to regulating market conduct in the financial services, the FSB published the Retail Distribution Review in November 2014. RDR put forward a total of 55 specific regulatory proposals to be implemented in phases. Since the initial RDR publication in November 2014 we have seen a Status Update: RDR Phase 1 in November 2015, a General Status Update: RDR in December 2015, a Status Update: RDR status as at December 2016 and a RDR Status Update December 2017.
The amendment to the General Code of Conduct would appear to be an approach by the regulator to implement provisions that cannot wait for RDR to move quickly enough through its specific phases. These proposed amendments include:
- Enterprise development contributions(definition of “financial interest”)
- Definition of replacement
- Requirement to act honestly at all times iiii. Referencing of authorisation status
- RDR related amendments (sections 3A, 7 and 8) – Read Carefully
- FSB to prescribe the framework and format of the Record of Advice
- Advertising, marketing and complaints management requirements (sections 14, 16 – 19)
- Forecasts,illustrations,hypothetical data or projected benefits and past performance data (new section 7A)
- Direct marketing
Please note for the Financial Planning Committee to be truly effective and representative it is imperative that we receive your feedback and commentary via your FIA regional and/or corporate representatives.