Acts Online
GT Shield

Long Term Insurance Act, 1998 (Act No. 52 of 1998)

Regulations

Regulations under the Long-term Insurance Act, 1998

Part 6 : Binder Agreements

6.2A Governance and oversight requirements

 

(1)        An insurer must before entering into a binder agreement and at all times thereafter—

(a) have the necessary resources and ability to exercise effective oversight over the binder holder on an ongoing basis, particularly in respect of identifying, assessing, managing and reporting on the risks of poor customer outcomes arising from conducting insurance business through binder agreements;
(b) satisfy itself of the adequacy of the binder holder's—
(i) governance, risk management and internal control framework, including the binder holder's ability to comply with applicable laws and the binder agreement; and
(ii) fitness and propriety, including any specific technical expertise required to perform the function to which the binder agreement relate;
(c) have documented controls in place to ensure the validity, accuracy, completeness and security of any information provided by the binder holder; and
(d) have appropriate contingency plans in place to address any shortcomings it may identify that could lead to it not being satisfied as to the matters provided for in paragraph (b), including where the binder holder is unable to provide the insurer with the relevant data in the appropriate format.

 

(2) An insurer must before entering into a binder agreement and at all times thereafter be satisfied that the binder holder has the operational ability to ensure integration between the information technology system of the insurer and the information technology system of the binder holder, which enables the insurer to have access to up -to -date, accurate and complete data held by the binder holder as and when requested by the insurer and as required in terms of the binder agreement and any other regulatory requirements relating to data management, including the requirements in the Policyholder Protection Rules.

 

(3) An insurer must regularly review and, where appropriate, act upon the information received from the binder holder to assess the appropriateness and suitability of the functions being performed in terms of the binder arrangement in delivering fair outcomes to policyholders on an ongoing basis.