Introducing the Insurers & Retirement Fund Benefit Administrators Supervision Department

2. Introducing the Insurers & Retirement Fund Benefit Administrators Supervision Department By Makgompi Raphasha - HOD 12 September 2019

3. AGENDA • Conduct of Business (COB) Supervision Division • COB Supervision Departments • The Insurers and Retirement Fund Benefit Administrators Supervision Department • The role of the Retirement Fund Benefit Administrators Supervision Team • Our Liaison Activities • Regulatory Developments

4. Conduct of Business Supervision Division

5. Background • The Conduct of Business Supervision Division is responsible for the ongoing supervision of the business conduct of all supervised entities, other than retirement funds (supervised by the Retirement Funds Supervision Division) and market infrastructures and certain other participants in the financial markets (supervised by the Market Integrity Supervision Division). • In its supervision, the Division puts emphasis on promoting fair treatment of financial customers of the entities it supervises. • The focus of the Division is supervision throughout the relevant product lifecycle, including product design and customer targeting, and all stages of pre- and post-sale services.

6. COB Departments The Division consists of the following departments: • Banks and Payment Providers; • Insurers and Retirement Fund Benefit Administrators; • Micro and Access Product Institutions; • Financial Advisors & Intermediaries; • Investment Providers; and • FICA Supervision.

7. Insurers & Retirement Fund Benefit Administrators Supervision Department

8. What the Department does • The department is responsible for the supervision of the business conduct of entities authorised for issuing insurance products and entities authorised for retirement fund benefit administration. • The department is divided into two sections: • The Insurance Supervision Team; and • The Retirement Fund Benefit Administrators Supervision Team.

9. DEPARTMENTAL STRUCTURE

11. The Insurance Supervision Team • The team is responsible for: • The supervision of the business conduct of entities authorised for issuing insurance products. • The supervision of the advice and intermediary services offered by Insurers.

12. The Retirement Funds Benefit Administrators (RFBA) Supervision Team

13. The 13B RFBA Supervision Team • This is a new team. Established on 1 October 2018. • Currently being staffed. • Has 1 Manager, 1 Specialist Analyst and 2 Analysts. • Currently recruiting for 2 Senior Analysts and 1 Specialist Analyst. • Looks after approximately 140 active benefit administrators.

14. The 13B RFBA Supervision Team • The team’s supervision functions include, but are not limited to: • Conducting on-site inspections of 13B Benefit Administrators; • Conducting desktop reviews of financial statements of 13B Benefit Administrators; • Performing off-site analysis of annual and other business returns submitted by 13B Benefit Administrators; • Monitoring compliance with prescribed conditions and dealing with complaints; and • Holding periodic engagement meetings with senior management of identified Benefit Administrators.

15. The 13B RFBA Supervision Team • Furthermore the team is involved in: • Development of legislation, regulatory instruments and industry communications, which includes, amongst others: • Conduct Standards and Guidance Notices • Approval of Changes in the Shareholding and Directors of Benefit Administrators • Approval of Mergers and Acquisitions of Benefit Administrators • Liaison activities with other Divisions within the FSCA ; Pension Funds Adjudicator and other regulators as necessary

17. Regulatory Developments • Conduct Standard – Review of Board Notice 24 of 2002 • Standard prescribes the general conditions for benefit administrators. • Prescribes the various returns to be submitted including Quarterly Returns. • Aligns the requirements to other legislation such as FAIS and Insurance • Fitness and propriety issues of Directors and Key Persons • Governance issues

18. Regulatory Developments cont… Guidance Notice – TCF Outcomes for Benefit Administrators Aims to provide guidance to Benefit Administrators on how benefit administrators should apply the 6 TCF Outcomes. Outcome 1: Customers are confident that they are dealing with benefit administrators where the fair treatment of customers is central to the culture of the benefit administrator Outcome 2: Services are designed to meet the needs of the benefit administrator’s customers Outcome 3: Customers are given clear information and are kept appropriately informed before, during and after the time of contracting

19. Regulatory Developments cont… • Outcome 4: Where customers receive advice, the advice is suitable and takes account of their circumstances • Outcome 5: Customers are provided with products that perform as product providers have led them to expect, and the associated service is both of an acceptable standard and what customers have been led to expect • Outcome 6: Customers do not face unreasonable post-sale barriers to change product, switch provider, submit a claim or make a complaint

20. Questions

21. THANK YOU