Short-Term Insurance Act, 1998 (Act No. 53 of 1998)

Regulations

Regulations under the Short-term Insurance Act, 1998 (Act No. 53 of 1998)

Part 3 : Limitation on Assets (Section 30)

3.1 Definitions

Purchase

For the purposes of this Part and section 30 and, unless the context otherwise indicates—

"asset-holding intermediary"

in relation to a short-term insurer, means an undertaking, other than a company the shares of which are listed on a licensed stock exchange in the Republic—

(a)	which is a subsidiary of the short-term insurer or would be its subsidiary if that insurer were a company;

(b)	the management of the investments of which is under the de facto control of the short-term insurer; and

(c)	which has assets which are regarded and dealt with, for all intents and purposes, as if they were the assets of the short-term insurer;

"associated company"

means a company—

(a)	which is an associate, as defined in section 25(5), of a short-term insurer;

(b)	which exercises control, as defined in section 25(6), over a short-term insurer; or

(c)	over which a short-term insurer exercises control as defined in section 25(6),

other than a company which is an asset-holding intermediary or a property company;

"call option"

means an option contract under which the holder of the option contract has the right but not an obligation, in accordance with the terms of the contract, to purchase (or to make a cash settlement in lieu thereof) the quantity of the underlying asset covered by the call option contract;

"convertible debenture"

means a debenture which is convertible into equity shares of a company;

"equity shares"

in relation to a company, means shares, excluding any part thereof which, neither as respects dividends nor as respects capital, carries any right to participate beyond a specified amount in a distribution;

[Definition substituted by regulation 4(a) of Notice No. 1439, GG 41334, dated 15 December 2017]

"linked policy"

means a long-term policy in relation to which the liabilities of the long-term insurer are linked liabilities as defined in section 33(2) of the Long-term Insurance Act, 1998;

"long position"

means long position as defined in the rules of SAFEX;

"market value"

in relation to an asset, means—

(a)	in the case of an asset which is listed on a licensed stock exchange and for which a price was quoted on that stock exchange on the date as at which the value is calculated, the price last so quoted;

(b)	in the case of an asset which is a long-term policy, the amount which on any day would be payable to the policyholder upon the surrender of the policy on that day;

(c)	in any other case, the price which could have been obtained upon a sale of the asset between a willing buyer and a willing seller dealing at arm's length, as estimated by the short-term insurer, or by the Authority if the Authority is not satisfied with that estimate;

"multiple"

means the futures contract's unit of trading in its description;

"n.e.s."

means not elsewhere specified in this Part;

"net loans"

means the positive amount (if any) by which the aggregate amount of loans made by a short-term insurer to its asset-holding intermediary, exceeds the aggregate amount of loans made to it by that asset-holding intermediary;

"property company"

means a company—

(a)	whose ownership of—

(i)	immovable property; or

(ii)	all of the shares in a company—

(aa)	whose principal business consists of the ownership of immovable property; or

(bb)	which exercises control, as defined in section 25(6), over a company whose principal business consists of the ownership of immovable property; or

(iii)

a linked policy, to the extent that the policy benefits thereunder are determined by reference to the value of immovable property,

constitutes, in the aggregate, 50 per cent or more of the market value of its assets;

(b)	which derives 50 per cent or more of its income, in the aggregate, from—

(i)	investments in immovable property;

(ii)	investments in another company which derives 50 per cent or more of its income from investments in immovable property; or

(iii)

linked policy to the extent that the policy benefits thereunder are determined by reference to the value of immovable property; or

(c)	which exercises control, as defined in section 25(6), over a company referred to in paragraph (a) or (b);

"put option"

means an option contract under which the holder of the option contract has the right but not an obligation in accordance with the terms of the contract, to sell (or to make a cash settlement in lieu thereof) the quantity of the underlying asset covered by the put option contract;

"rules of SAFEX"

means rules issued by SAFEX in terms of section 10(2)(b) read with section 17 of the Financial Markets Act, 2012 (Act No. 19 of 2012);

[Definition substituted by regulation 4(b) of Notice No. 1439, GG 41334, dated 15 December 2017]

"SAFEX"

means the South African Futures Exchange;

[Definition substituted by regulation 4(c) of Notice No. 1439, GG 41334, dated 15 December 2017]

"shares"

include share stock;

"short position"

means short position as defined in the rules of SAFEX.