Gas Regulator Levies Act, 2002
R 385
Long Term Insurance Act, 1998 (Act No. 52 of 1998)Board NoticesNotice on Governance and Risk Management Framework for Insurers, 2014Part 4 : Risk Management System15. Investment policy |
| (1) | An insurer's investment policy must— |
| (a) | provide for the investment of all the insurer's assets in accordance with the Act; |
| (b) | specify the nature, role and extent of the insurer's investment activities and how the insurer ensures compliance with the value of and limitations on assets requirements as prescribed under the Act; |
| (c) | set out the insurer's strategy for investment activities and specify asset allocation strategies, how these will be managed and how these are related to the asset-liability management policy; |
| (d) | establish explicit risk management procedures with regard to more complex and less transparent classes of asset and investment in markets or instruments that are subject to less governance or regulation; |
| (e) | take into account any factor which may materially affect the sustainable long-term performance of assets, including factors of an environmental, social and governance character; and |
| (f) | adhere to the 'Prudent Person Principle' by establishing measures that will assist in ensuring that— |
| (i) | the insurer only invests in assets and instruments whose risks the insurer can properly identify, assess, monitor, manage, control, and report on; and |
| (ii) | assets are invested in a manner appropriate to the nature and duration of the insurer's liabilities and the best interests of policyholders and beneficiaries. |
| (2) | An insurer's investment policy must provide in respect of— |
| (a) | the investment of all assets, specifically those assets covering the financial soundness requirements, for investment in a manner that ensures the security, quality, liquidity and profitability of its whole portfolio of assets and the availability of assets; |
| (b) | a conflict of interest, that investments are made in the best interest of policyholders and beneficiaries; |
| (c) | assets held in respect of long-term policies where the investment risk is borne by the policyholders, that the liabilities must— |
| (i) | in the case of policy benefits that are directly linked to the value of units, be represented as closely as possible by those units; |
| (ii) | in the case of policy benefits that are directly linked to a share index or a reference value other than units, be represented as closely as possible by the units deemed to represent the reference value or, in the case where units are not established, by assets of appropriate security and marketability which correspond as closely as possible with those on which the particular reference value is based; |
| (d) | benefits referred to under paragraph (c)(i) or (ii) that include a guarantee of investment performance or another guaranteed benefit, for assets held to cover the corresponding additional liabilities to adhere to subsection (1)(f)(ii); and |
| (e) | assets other than those referred to under paragraph (c), for— |
| (i) | investments in derivative instruments only in accordance with section 34 of the Long-term Insurance Act or section 33 of the Short-term Insurance Act, as the case may be; |
| (ii) | investments in assets which are not admitted to trading on a regulated financial market only if such investments are kept to stated prudent levels; |
| (iii) | the proper diversification of assets in a manner that avoids excessive reliance on any particular asset, issuer or group of companies, or geographical area and excessive concentration of risk in the portfolio as a whole. |
