The Consumer Protection Act

The purpose of the Bill is “to promote and advance the social and economic welfare of consumers in South Africa”. Although the Bill will not apply to advisory services regulated by the Financial Advisory and Intermediary Services (FAIS) Act, it is important that as the short-term sector, we respect the spirit of the intention of the Bill. At the time of writing, the Bill was in the office of the Presidency.

The Consumer Protection Act, 2008 (“CPA”) was signed into law in April 2009. The objective of the Act is “to promote a fair, accessible and sustainable marketplace for consumer products and services and for that purpose to establish national standards relating to consumer protection.”

The Short-term Insurance Act, 1988 and (Act No 53 of 1998 and the Long Term Insurance Act, 1988 (Act No 52 OF 1988) were excluded from the ambit of the laws which where considered during the consolidation of consumer protection laws. The Acts were excluded subject to the sector laws being aligned with the consumer protection measures provided for in the CPA within a period of 18 months from the commencement of the CPA failing which the provisions of CPA will apply.

The FSB is in the process of appointing a consultant to undertake a comprehensive assessment of all sector laws vis a vis the Consumer Protection Act. The insurance industry will be informed of the developments and will be consulted on the preliminary and final outcomes of the assessment.

Have a look at the opinion provided by Jackie Hurter on the application of the CPA within our industry. (Please note that this opinion does not necessarily express the views of SAIA, however, it is provided to stimulate debate and should be applied to member company’s practices as deemed appropriate).

>> Click here to read the opinion.

Have a look at the opinion provided by Donald Dinnie on the impact of the CPA on the short-term insurance industry. (Please note that this opinion does not necessarily express the views of SAIA, however, it is provided to stimulate debate and should be applied to member company’s practices as deemed appropriate).

>> Click here to read the opinion

Companies Act

The purpose of the Companies Act as emphasised by the Department of Trade and Industry is to introduce legislation that promotes simplification, flexibility, corporate efficiency, transparency and predictable regulation. Further, a need for legislation to be appropriate to the legal, economic and social context of South Africa was identified.

The process of engagement around the drafting of regulations for the Companies Act (No 71 of 2008) has begun. The insurance industry is requested to forward any recommendations for regulations around any sections in the Act which affect the industry either directly or indirectly through SAIA, as these will be incorporated into the drafting process with Business Unity South Africa (BUSA).

Second Hand Goods Act

The Second Hand – Goods Act was assented and brought before Parliament in April 2009. The Act is now open for public comment which must be forwarded to Parliament by 24 September 2009. The purpose of the Act is:

• To regulate the business of pawnbrokers and dealers in the second – hand goods
• To limit the trade in Stolen Goods
• To promote ethical standards in the second- hand goods trade

The Government believes that the short-term insurance industry has a vested interest in the act and has called upon the industry for comments on the act.

The SAIA will collate all comments and provide Government with feedback.

SAIA lobbied on behalf of the industry for a blanket exemption from this legislation. As per the notes of the National Council of Provinces, the insurance industry is not primarily involved in the “carrying on a business of dealing in second hand goods” and therefore registration is not required.

Competition Matters

Competition Laws Amendment Bill

The purpose of this proposed legislation is to strengthen the existing provisions of the Competition Act to fight collusion and cartels. The Bill also improved on market inquiry provisions that allow the Competition Commission to proactively investigate markets and increase market transparency. At the time of writing, the Bill was in the office of the Presidency.

Competition Commission

SAIA is in the process of engaging the Competition Commission on the use of standard policy wording and re-positioning the use of the Multimark Policy Wording.

Financial Intelligence Centre Amendment Act

At the time of writing, National Treasury was expected to bring the Bill into effect during the second quarter of 2009.

General Financial Services Laws Amendment Act

This seeks to amend a number of financial sector laws in order to improve the efficiency and regulation of the sector. It was enacted on 1 November 2008, with an exception to a certain section. This will see the formulation of an enforcement committee within the Financial Services Board (FSB).

Protection of Personal Information Bill

The Protection of Personal Information Bill was tabled in Parliament on 26 August 2009. The SAIA is currently reviewing the impact of the Bill on the short-term insurance industry. Issues have been sent via SAIA to Business Unity SA. Public hearings on the Bill took place on 13 and 14 October 2009.