The new Insurance Act of 2017 will come into effect on July 1, said Treasury.
Treasury issued a statement on Tuesday, indicating that the act was assented by the president in January this year.
The act sets out a legal framework for regulation and supervision of insurers and insurance groups in terms of Twin Peaks.
“This will ensure the safety and soundness of insurers, enhance the protection of policyholders and potential policyholders, promote broad-based transformation of the insurance sector, and contribute to the stability of the financial system in general,” the statement read.
The act also introduces a micro insurance framework, to facilitate the entry of new firms, Treasury explained. This should increase access to insurance for all South Africans.
Under the new insurance act, all prudential requirements in the long-term insurance act of 1998 and short-term insurance act of 1998 are repealed. It will provide for a two-year transition period for insurers to migrate from the existing to the new legal framework, said Treasury.
Non-prudential sections in the acts will remain in force, in parallel with the new prudential requirements of the insurance act pending the enactment and implementation of the Conduct of Financial Institutions Bill, Treasury concluded.
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