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Investment Indicators - 3 April 2018 |
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Paul Kruger
Author/Editor |
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Success is the ability to go from one failure to another with no loss of
enthusiasm - Sir Winston Churchill |
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Distributed to 51,083 subscribers.
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click here |
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| Rates Review |
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1. Secured Investment Rates |
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Please note that (G) indicates a Guaranteed and (L) a Linked product. In order to understand the difference between guaranteed and linked rates,
kindly click here for an explanation. |
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Company |
This Week |
Last Week |
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Clientéle Life (L) |
6.620% |
6.520% |
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2 |
1Life (L) |
6.600% |
6.490% |
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3 |
Absa (L) |
6.233% |
4.794% |
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Company |
This Week |
Last Week |
| 1 |
Clientéle Life (L) |
6.720% |
6.620% |
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2 |
1Life (L) |
6.600% |
6.490% |
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3 |
Assupol (G) |
6.490% |
6.390% |
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2. Money Market Funds |
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Please bear in mind that our figures, though based on the actual quotations that you also use, are for information purposes only,
and can never replace the official quotation from the product house. In terms of the guarantees, you are requested
to clarify the exact extent of such guarantees with the product house prior to advising clients. |
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From the Crow's Nest |
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New Twin Peaks Regulators Established |
Those of us tasked with staying abreast of regulatory change can be
forgiven for mistaking the Easter weekend with the December
holidays, given the vast amount of new information published since
last Thursday.
A media release by Treasury provides the background to the new
order.
On 1 April 2018, South Africa’s financial regulatory system will
fundamentally change, as two new regulators come into operation -
the Prudential Authority (PA) and the Financial Sector Conduct
Authority (FSCA). This implements a new Twin Peaks model of
financial sector regulation in South Africa.
Deputy Governor Kuben Naidoo is appointed as the CEO of the
Prudential Authority. Established within the South African Reserve
Bank, the PA will supervise the safety and soundness of all
financial institutions. The FSR Act also provides for stronger
oversight of financial conglomerates and of systemically important
financial institutions (SIFIs). The Minister of Finance will
initiate the legislated process to appoint a Commissioner and Deputy
Commissioners for the FSCA, expected to take three months. The FSCA
will supervise how financial institutions conduct their business and
treat customers. It will be responsible for significantly improving
customer protection in the financial sector, and driving better
customer outcomes, ensuring that the sector serves South Africans
best. It is also responsible for the efficiency and integrity of
financial markets.
The current Financial Services Board (FSB) closed down on 31 March 2018. Transitional plans for the closing down of the FSB and the
establishment of the FSCA are well-progressed. A Transitional
Management Committee will be responsible for implementing
transitional plans, until a FSCA Commissioner and Deputy
Commissioners have been appointed. The chair of the FSB Board,
together with the current executive committee of the Financial
Services Board, are included in the Transitional Management
Committee in order to ensure a smooth and non-disruptive process.
Both the PA and FSCA will publish regulatory strategies within six
months of their establishment, setting out in further detail their
intended regulatory focus areas and work plans over the next three
years.
A Commencement Notice and Regulations have been published in the
Government Gazette to give effect to the relevant provisions of the
Financial Sector Regulation Act (Act 9 of 2017)(FSR Act) that
provides for the Twin Peaks system.
In order to ensure a well-managed and non-disruptive transition to
the new model, certain provisions of the FSR Act will be phased in
over time. Once fully phased in, the Twin Peaks regulatory model
will focus on a more harmonised system of licensing, supervision,
enforcement, customer complaints (including ombuds), appeals, and
consumer advice and education across the financial sector.
Ensuring that there is co-ordination across all regulators in the
financial system is an important supporting pillar. These regulators
include the PA and FSCA, the National Credit Regulator, the
Financial Intelligence Centre, the Council for Medical Schemes and
the South African Reserve Bank.
Both institutions’ websites are also live:
https://www.fsca.co.za/Pages/Index.aspx
https://www.prudentialauthority.co.za/Pages/default.aspx
The Commencement Notice and Regulations can be found on
www.treasury.gov.za/twinpeaks. |
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| Your Practice Made Perfect |
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Proposed amendments to F&P and CO qualifications |
Scarcely three months after publication of the new Fit and Proper
requirements, a discussion document on possible changes was published.
Fit and Proper
Proposed changes include:
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Alignment to the new authorisation classes of insurance business and
alignment to the terminology used in the Insurance Act. The naming
convention of affected product categories will not be changed to avoid
impacting on licences, approvals and appointments.
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Changes to the definition of CPD Activity to require that Professional
Bodies mandated to accredit activities must ensure that such activities
are verifiable.
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A FSP may not appoint a person as a representative who is an
unrehabilitated insolvent. Those who currently employ such persons will
have to apply for an exemption, but the manner in which this is to be
done has yet to be published.
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Removal of the reference to “contractor” from the definitions of
“annual expenditure” and “remuneration”
CO Qualifications
An invitation to comment on Amendments to Qualification Requirements for
Compliance Officers brings the appropriate subject list in line with
BN194 of 2017.
Comments on both the above documents are due by 1 June 2018. |
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Medical Schemes and the FSRA
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In terms of section 291(1) and (2) of the Financial Sector Regulation
Act, 2017, the functions of both the Prudential and Financial Sector
Conduct Authorities in relation to medical schemes must be exercised by
the Council for Medical Schemes, but with the concurrence of the
relevant authority, until 31 March 2021, subject to section 291(4) of
the Act. |
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Dishonest and fraudulent claims exceed R1 billion
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South African life insurers reported significant increases in dishonest
and fraudulent long-term insurance claims for 2016.
Claims fraud statistics released by the Association for Savings and
Investment South Africa (ASISA) show that the number of irregular claims
detected in 2016 more than tripled to 13 488 from 4 381 claims in 2015.
The value of the thwarted fraudulent and dishonest claims jumped from
R870.7 million in 2015 to R1.03 billion in 2016.
Death claims
Of significance is the fact that cases involving beneficiaries rose from
4 to 19, while those involving advisers escalated from 2 to 31. The
actual amounts involved in the latter, however, reduced from R3.1 million to R213 696.
Funeral Claims
These claims account largely for the significant increase in the number
of fraudulent claims. In 2015 there were 2 325 cases amounting to R45.8 million. In 2016 this rose to 11 302 involving R168.3 million, a
staggering increase of 386% and 268% respectively.
This section of the industry has always been the biggest headache for
the regulator, as expressed in its newsletters. Whilst imploded Ponzi
schemes regularly grab the headlines, these offences never reach the
radar screen. One can only speculate about the number of customers who
are hard done by, but do not have access to remedial resources.
Disability claims
Misrepresentation and material non-disclosure by policyholders resulted
in 617 disability claims worth R577.6 million being declined in 2016,
compared to 444 claims worth R407.8 million in 2015. Donovan Herman,
convenor of the ASISA Claims Standing Committee, says starting from July 2016 to June 2017, the life industry also noticed a significant increase
of 21% in legitimate claims against individual disability policies.
“Considering that an unusually high increase in legitimate disability
claims is usually indicative of consumers under severe financial strain,
we are not surprised that dishonest claims also increased so
significantly.” “Some policyholders deliberately do not disclose
existing health conditions with the aim of securing lower premiums. This
is very short sighted since the life insurer is likely to uncover
deliberate attempts to hide material information, which will lead to
claims being declined.”
Death claims
A total of 444 death claims were declined in 2016 due to dishonesty and
fraud compared to 426 in 2015. However, the value of these claims was
much lower in 2016 at R275.2 million, compared to R402.6 million in
2015. In the same period life insurers honoured 99.3% of claims against
fully underwritten life policies to a record value of R13.1 billion.
Fully underwritten life policies are only issued if the policyholder has
completed a full underwriting process, which may involve a comprehensive
assessment of the life insured’s medical history. Herman says this
demonstrates the value of being upfront with your insurer and paying the
appropriate premium rather than risking losing the value of your policy.
Click here to read the full
ASISA media release. |
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Regulatory Examinations |
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Regulatory Exam News |
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The new Determination of Fit and Proper Requirements (BN 194 of
2017) came into effect on 1 April 2018.
Updating of study material
There appears to be a perception that the two examination bodies,
Moonstone and the FPI, are responsible for providing study material. Our
mandate from the FSB only entails presentation of the exams, NOT
provision of study material.
Placement of study material on our website is essentially a courtesy to
assist easy access for learners. We expected the updated Inseta study
material to be available on its website from 1 April 2018. At the time
of publication of this newsletter, this had not yet materialised.
Please follow
this link to check whether the Inseta study material have been
updated. If the wording on the website still reads “INSETA is pleased to
present its updated learning material FAIS RE support, aligning to
updates to the legislation which became effective in
April 2014” then it has
not yet been done.
Please address all enquiries in respect of
study material to Inseta, not Moonstone.
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REMINDER: The new Fit and Proper requirements will form part
of the regulatory exam question data bank from 1 April 2018. The
FSB Preparation Guide has been updated and contains the relevant
Qualifying Criteria and Tasks applicable as at 1 April 2018.
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IMPORTANT: The standard cancelation clause will apply to all
registrations for the regulatory examinations. Candidates who wish to
re-schedule their examinations should take careful cognisance of the
FSB’s cancelation clause.
Contact details
Email enquiries should be addressed to
faisexam@moonstoneinfo.co.za. You can phone us on
021 883 8000 - select option 2 to speak to one of our
consultants.
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2018 Schedules updated |
Please note: Registration cut-off is 11 working days before date of exam.
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Careers Platform
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Are you hiring? Advertise your position on Moonstone’s Career Platform
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www.moonstone.co.za
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Our audience is relevant and industry specific: individual and corporate advisors and brokers in the following financial sectors:
iInvestment, Risk, Healthcare, Banking, Retirement, and Insurance. |
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Featured Positions |
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Sales/Underwriter:
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In Lighter Wyn |
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The wyn is not so light today, but hopefully equally enjoyable |
I am very much into vinyl recordings these days. This weekend I came
across an expensive bargain I just could not resist. A Leoard Cohen
album titled Songs from the Road, which contains most of his
greatest songs, performed live. Hallelujah, for instance, has almost
all the different verses as opposed to the three or four normally
recorded.
A huge bonus was this introduction to the album. Hope you enjoy it
as much as I did.
'The Art of Wandering' by Leon Wieseltier
The road is not a line between places; it is a place between places, a
place of its own. You cannot understand the ravishments of the road
unless you overcome the logistical way of looking at things, which
is perhaps the most powerful impediment that our hustling way of
life puts in the way of experience.
Since we cling to a mainly instrumental view of the road, we have
forgotten how to be travellers and we are tourists instead, sitting
still before the window and watching the world speed past, when in
fact we are the ones who are speeding and it is the world that is
still, for those who possess the capacity for stillness.
We are too enamoured of destinations. We hunger too much for
arrival. We treat the road as an interval between meanings, an
interregnum between dispensations, and so we are blinded to the
richness of meanings and dispensations in the road itself. If
departure is the past and arrival is the future, then the road is
the present, and there is nothing more spiritually difficult, or
spiritually rewarding, than learning to live significantly in the
present. This is accomplished by a schooling in transience, and the
road is such a school.
Almost as powerfully as the sea and the sky, the road is an emblem
of immensity: the horizon into which it disappears is the promise of
a release, which is the promise of a horizon, which is the promise
of a release. From the stretch of even the most ordinary road, you
may infer a suggestion of infinity.
Perhaps this is why singers and preachers have often preferred to
wander: itinerancy refreshes and expands the spirit. By means of the
unfamiliar, it makes complacence harder (though the cult of the road
also has its conventions). The wanderer is the figure who recognizes
the gift of alienation. The stranger may be powerless, but he has
the force of a fresh eye and an unexpected mind: the inner advantage
belongs to him. He knows no stasis. It is of course for sustenance
that the singer and the preacher roam from town to town, but not
only for material sustenance. The gig is an opportunity to gain
distance (which is a gain) and to observe more; to do it differently
and better; maybe even to get it right. In some of his songs about
wandering, Schubert insisted upon the lucky break of homelessness:
"Everything seems clear; nothing is distorted, or withered in the
heat of day. Happy in my surroundings, if alone, I go." "There,
where you are not, there is happiness." The wanderer may be weary,
but so is the man plumply at home, the stationary man, the
undiversified man, the solvent man, the man who lives in the
illusion that he knows all he needs to know and sees all he needs to
see.
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Tel: +27 21 883 8000 | Fax: +27 21 883 8005
info@moonstoneinfo.com
www.moonstone.co.za
P.O. Box 12662, Die Boord, Stellenbosch, 7613, Republic of South Africa
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or the sending of e-mail communications for other than strictly
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The complete disclaimer can be accessed
here. |
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