In view of the important role that the hospitality industry plays in the economy, it is imperative that legal clarity is obtained as soon as possible.
The FSCA has decided to put its own “test case” to obtain legal certainty on CBI Cover on ice.
“After engaging with their legal teams, the majority of non¬life insurers have advised the FSCA that due to many legal complexities they are now of the view that the cases that are currently before the South African courts and the one by the Financial Conduct Authority in the United Kingdom will provide the required legal certainty on CBI policy wordings for the non-life insurance industry.”
In response to the judgment in the UK case, Santam noted:
“Santam, along with others in the local non-life insurance industry, is currently engaged in gaining similar legal certainty from the South African courts. Our reinsurance programme will only respond to claims covered under the terms of our policies. In order to formulate a reinsurance claim under a different interpretation of the policy wording to our own, such interpretation would have to be definitively decided by the South African courts. We want to resolve this matter and obtain clarity as soon as possible.”
It is interesting to note that Santam relied on an affidavit from an underwriter from Lloyd’s in London in its case against Ma-Afrika.
The Ma-Afrika/Santam case was heard on 1 September, but indications are that judgment will only be delivered towards the middle of November. By this time, many businesses who may benefit, should the court find against the insurer, would have gone under, having been closed since 26 March this year.
The opening of international borders, although welcome, will not lead to an immediate flood of overseas tourists, according to leading economists, in view of the precautionary measures announced last night.
“On arrival in SA, every traveller ‘will need to present a negative Covid-19 test result not older than 72 hours from time of departure’. Notwithstanding compliance with this requirement, all travellers will be screened for symptoms and, if found to be displaying any, quarantined until a repeat test has been conducted. Should a traveller wish to enter SA without having undergone a pre-departure test within the prescribed timeframe, ‘mandatory quarantine’ will be imposed at the traveller’s ‘own cost’. When necessary, ‘travel may be restricted to and from certain countries … (with) high infection rates’.
The numbers are not small fry
The Tourism Industry, as an export sector, generated R120bn in foreign exchange from visitor receipts (in 2018), some 8.7% of South Africa’s exports and is second only to mining as an export sector.
Tourism is a significant employer of women (70%) and youth (60%) and has high employment ratios of low- and semi-skilled people. It generates economic activity, employment and SME opportunities in rural and remote areas with greater need.
Tourism’s supply chain has deep tentacles into many sectors including vehicle manufacture, agriculture, fuel, other manufacturing (e.g. textiles -towels, linen, blankets, duvets, décor fabrics, uniforms-, furniture, crockery, cutlery & kitchen equipment, cleaning products and guest supplies etc.), and services such as banking , security, marketing, laundry, cleaning, catering etc.
Helping this sector back on its feet is vital for the country’s staggering economy. It pushes all the right buttons. All it needs is some fuel to get the engines running again.
But sooner, rather than later.
Click here to download the FSCA media release.
