The Insurance Act, which was signed into law earlier this year, aims, among other things, to increase low-income earners’ ability to access insurance products and foster transformation in the insurance sector.
The Act, which was approved by Parliament in December last year, aims to bring smaller players into the fold under the auspices of the regulator, the new Prudential Authority, which will fall under the South African Reserve Bank.
“Not only will the new law make it easier for low-income consumers to access insurance products that cater to their needs, but it also gives small businesses the opportunity to enter the insurance industry,” says Vera Nagtegaal, the executive head of Hippo.co.za.
Nagtegaal says the Act seeks to link licensing with the sector’s overall transformation targets as set out in the financial sector code. “This will empower the [regulator] to push for development targets, financial inclusion and transformation objectives.”
The framework’s transformation component is linked to the Broad-based Black Economic Empowerment Act and the financial sector code, which have made transformation in the insurance industry a priority.