The FSB recently published a document on the proposed future regulatory framework for reinsurance in South Africa.
This document –
- Outlines the results of the reinsurance regulatory review carried out by the Financial Services Board;
- Sets out the challenges inherent in the current regulatory framework relating to reinsurance;
- Puts forward a number of proposed reforms aimed at mitigating these challenges and
- Invites feedback from industry regarding the above.
Key proposed reforms relate to:
- Participation in the reinsurance market.
- Conducting reinsurance business.
- Governance, Capital adequacy and Reporting.
- Adjusting the credit rating of a reinsurer for solvency assessment of direct insurers so as to:
- Create a level playing field for locally-incorporated reinsurers by adjusting for the sovereign cap on their credit ratings; and
- Adjust the measure used to assess the risks arising from reinsurance arrangements entered into with foreign (re)insurers to capture a supervisory assessment of the prudential risks and externalities, depending on whether the business is conducted through a branch operation or on a cross-border basis.
- Reinsurance contracts.
- Transparency and accessibility of information.
- IFRS & Tax.
Please click here to download the discussion paper.
