A recent Joint Communication sets out the responses by the Prudential Authority (PA) and the Financial Sector Conduct Authority (FSCA) to the COVID-19 pandemic as well as the observed and predicted impacts it has, or is likely to have, on the South African economy and specifically the South African insurance industry.
The PA and FSCA (Authorities) recognise that the COVID-19 pandemic has, and will have, an impact on insurers’ financial soundness. Nevertheless, they expect insurers to continue to operate in a prudent and socially responsible manner. To this end, this Communication outlines some of the regulatory and supervisory actions that the Authorities are implementing to alleviate the stress caused by COVID-19 on insurers.
The Authorities have identified certain immediate priorities that warrant further consideration by insurers, while acting in a responsible manner towards their shareholders, other stakeholders and, most importantly, their policyholders. As a result, they undertake certain actions in an effort to assist insurers. These actions relate to:
| ● | Retention of the Solvency Capital Requirement |
| ● | Reporting requirements |
| ● | Dividends and bonuses to staff |
| ● | Outstanding premiums |
| ● | Foreign exchange limits |
| ● | Insurers’ actions |
Furthermore, they will continue to engage with the insurance industry and all other relevant stakeholders during this time, and may issue further communication or implement any additional actions as and when necessary as further analysis on the impact of COVID-19 is conducted, especially in relation to the impact on the financial soundness of South African insurers.
