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The Economic Freedom Fighters in Parliament is currently participating in the Standing Committee on Finance process of finalizing the Insurance Bill, which must be passed into an Act of Parliament before the end of 2017. The EFF is represented in the Committee by Deputy President Floyd Shivambu.

The Bill is largely about adjustments to bring the insurance legislation in line with the Financial Sector Regulation Act, which was signed into Law and commenced on the 7th of July 2017, and introduces primarily a Prudential Authority and Financial Services Conduct Authority as the major instruments and mechanism to Licence, regulate and oversee financial sector institutions.

The EFF's submissions to the Insurance Bill, amongst others, include the following:

a)      The Bill must categorically state that the Prudential Authority, which is mandated with issuing of insurance licenses should make sure that at all times, licenses issued are evenly distributed across State ownership, co-operative ownership and private ownership.

b)     A minimum of 50% of insurance licenses issued to private companies should be in the control and ownership of companies that are wholly black owned.

c)      The transformation requirement for other companies that hold insurance licenses should include a minimum of 30% black ownership, 30% women ownership and 50% women control in management and boards.

d)      Limit the number of licences issues to majority foreign owned insurance companies

e)     The insurance companies must largely mandate black owned asset management companies to manage the funds.

These and others transformation commitments should be complied with within 12 months of the Bill being passed into an Act of Parliament and all parties concerned should play an active role in their realization.

The EFF appreciates that these submissions form part of a broader submission made to the process on the transformation of the financial sector as a whole, and should inform our perspectives on all financial institutions.

The central pillar of the EFF submissions is that all transformation commitments must be clearly mentioned in the Bill and passed into a binding Act of Parliament instead of being reduced to charters and addendum that are not legally binding. Failure to comply with legislation should result in the withdrawal of the licenses of those who fail to comply with an Act of Parliament.

The EFF is cogently and strongly making these submissions because the ownership and control of the insurance sector reflect the ownership and control that persisted under apartheid. Black people individually and collectively are responsible for less than 1% of the ownership of insurance companies, despite that they are the major consumers of insurance products in all categories.

The EFF calls on practitioners, interested parties and professional bodies in the Insurance space to contribute to the finalization of the Insurance Bill so that it is a passed as a progressive Act of Parliament, which will redress the economic and financial imbalances of the past.

The EFF calls on all the stakeholders to make written submissions via the following details:

Gumani Tshimomola

Email: gumanitk@gmail.com

Tel No: 021 403 8868

Issued by EFF