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Insurers must brace for fresh wave of regulations in 2021 

Non-life insurers will have to stay on their toes throughout 2021. Hard on the heels of the Covid-19 business interruption judgments that caught some insurers off guard in 2020, a raft of new regulatory reforms aimed at protecting policy holders is likely in the coming months.

‘2020 marked a shift in attitude towards policyholder protection and this will no doubt continue in 2021 with additional regulatory reforms,’ says Christine Rodrigues, partner at leading African law firm, Bowmans.

She says the anticipated reforms are likely to affect the way insurers contract with policyholders and their intermediaries as well as the kind of products that are sold to customers among others.

‘And of course, the most substantial change of all for insurers – and the rest of the financial services industry – is likely to be the coming into effect of the Conduct of Financial Institutions (CoFI) Bill, whether in its existing form or after further revisions,’ Rodrigues says.


How 2020 set the scene for change

Referring to 2020 and 2021 as years of far-reaching regulatory change for the insurance industry, she says the COVID-19 pandemic has been catalytic, particularly in how Treating Customers Fairly (TCF) is approached.

‘Until the end of 2019, ‘principles-based regulation’ was unexplored and untested,’ she says. ‘When the pandemic was declared, it was tested and tested again, resulting in TCF going from abstract to concrete in a short period of time.’

The shift began during 2020 when ‘policyholders unexpectedly took on insurance giants to enforce their rights’ on business interruption insurance, and gained momentum when the Supreme Court of Appeal came down against insurers.

‘2021 now holds the prospect of additional regulatory reforms relating to policyholder protection,’ Rodrigues says.

What 2021 will bring

While some of the expected reforms will apply to the general financial sector, others are specific to non-life insurance.


Photo found via unsplash.com article by www.iol.co.za