In February, the FSCA published FSCA Communication 4 announcing that it is exempting FSPs, key individuals and representatives who operate in the credit life and funeral insurance space from some of the Fit and Proper Requirements.
Read: ‘Fit and proper’ exemptions for credit life, funeral insurance FSPs
The reason for the exemptions is the “unintentional complications” that have arisen because of the reclassification of classes and sub-classes of insurance business in terms of the Insurance Act.
At the end of April, the FSCA withdrew FAIS Notice 16, “Exemption of particular persons from compliance with certain competency requirements, 2022”, and replaced it with FAIS Notice 42, “Exemption of Particular Persons from compliance with Certain Competency Requirements”.
It appears that the only difference between Notice 16 and Notice 42 is the addition of long-term insurance sub-categories B1-A and B2-A in relation to the section on credit life products.
Section 2 of Notice 42 is published below, with the additions in bold, for clarity:
(1) An FSP and its representatives, excluding a supervised representative, approved in respect of short-term insurance personal lines, are exempted from the –
(a) class of business training requirements;
(b) experience requirements; and
(c) qualification requirements,
as applicable to long-term insurance sub-category B1, long-term insurance sub-category B1-A, long-term insurance sub-category B2 and/or long-term insurance sub-category B2-A, to the extent that the requirements referred to in subparagraphs (a) to (c) above relate to financial services rendered in respect of credit life products.
(2) A key individual approved in respect of short-term insurance personal lines is exempted from the –
(a) class of business training requirements; and
(b) qualification requirements,
applicable to long-term insurance sub-category B1, long-term insurance sub-category B1-A, long-term insurance sub-category B2 and/or long-term insurance sub-category B2-A, to the extent that the requirements referred to in subparagraphs (a) to (b) above relate to the management and oversight performed by the key individual over financial services rendered in respect of credit life products.
To download FAIS Communication 4 of 28 February, Notice 42 of 28 April and the FSCA’s response to the public submissions on the draft amendments (dated 28 February), go to: www.fsca.co.za > Regulatory framework > Notices > FAIS notices > 2022
