The FSCA last week published two notices relating to the guarantee, professional indemnity (PI) and fidelity insurance (FI) exemptions granted to certain types of FSPs.
The FSCA has once again extended, to 31 August 2024, short-term and long-term insurers’ exemption from having guarantees, PI or FI cover, as required by the General Code of Conduct for FSPs and Representatives.
Section 13 of the General Code of Conduct states that a provider, excluding a representative, must if and to the extent required by the registrar, maintain in force suitable guarantees or PI or FI cover.
The initial exemption was from 22 May 2015 to 21 May 2020. On 21 August 2020, this was extended to 31 August 2022.
The latest exemption was published in terms of FAIS Notice 84 of 2022 (“Amendment of Exemption of Certain FSPs who are Long-term Insurers or Short-term Insurers from Section 13 of the General Code of Conduct, 2022”). It came into operation on 1 September.
Click here to download Notice 84.
The FSCA has also extended to 31 August 2024 the exemption from the minimum guarantee, PI or FI cover requirements for Category I FSPs that are licensed only for Long-term Insurance Sub-category A and/or Friendly Society Benefits.
In terms of paragraphs 3(a) to (c) of Board Notice 37 of 2009, Category I FSPs are required to have PI cover or guarantees of at least R1 million. Category I or Category IV FSPs who receive or hold clients’ financial products or funds must have guarantees or FI cover of at least R1m.
The initial exemption was from 22 August 2017 to 21 August 2020. It was extended on 23 August 2020 to 31 August 2022.
The latest exemption was published in terms of FAIS Notice 83 of 2022 (“Amendment of Exemption of Certain FSPs from the Professional Indemnity and Fidelity Insurance Cover Requirements, 2022”). It came into operation on 1 September.
